It’s no surprise that online business is booming. Especially when you consider the long-term psychological effects of the Great Recession on those who experienced a period of job instability. Add that to a growing gig economy plus the current desire to work safely from home, and it’s easy to see why people feel a stronger desire to start an online business. Doing so can help secure financial stability rather than relying solely on one job that can be taken away at a moment’s notice.
The good news is that there are many ways to start an online business and begin generating multiple revenue streams, even passive income. Before we dive into the various small business models and online business opportunities that you can explore, remember that to make online business management sustainable for you personally, you should start by identifying your own talent and passions. Then, find an online niche where they are needed and can flourish.
What Is an Online Business?
These days, the answer to that question might be complicated or simple, depending on how you look at it. The fact is, nearly every business could be considered an online business. Even longtime retailers have been moving more and more of their business online. That’s because as a society, we’re living our lives in a blend of physical and digital worlds. We no longer need to be physically present to buy things, sell things or even do our jobs. Plus, the Internet’s existence means that people and businesses around the globe are now connected and can interact more directly than ever before.
Because of that, starting a business can now take place entirely online via a website, social media and online marketplaces. Often, online is exactly where you meet your customers. And there are plenty of digital, web- and cloud-based tools to help you run all related business operations. But, while an online business can take practically any form, most make money by selling products, services or information.
Home-Based Online Business Ideas
If you’re looking for a home-based online business idea, you may get overwhelmed. There are practically infinite types of online businesses, and the options for running them can also seem limitless. To keep things simple, consider the three main categories that most online businesses fall under. Take a look at these categories below and consider which type would work best for your lifestyle, your experience and your skills.
Offer professional services
Both small businesses and large enterprises often need services beyond what their workforce can handle. That’s why so many people successfully freelance or run LLCs as solopreneurs. There are plenty of businesses and personal services that translate well to the freelance and consulting world because they can be done remotely. These can include:
- Social media marketing
- Marketing automation
- SEO experts
- Working as a virtual assistant
- Bug testing
- Video/podcast editing
- Graphic design
- Website and app development
- Translation work
- Resume writing
- Vacation rental management
Sell your knowledge
Beyond providing services based around your skills and background, you can also choose to teach others. Think about it. People go to the Internet to learn nearly every skill, whether it’s how to bake, decorate, understand a new language or something entirely different. Even highly specialized business and career coaches make money with online businesses. So, if you have deep knowledge in a topic or a special skill, consider cashing in on that. There are plenty of ways to do so, including:
- Teaching live virtual classes
- Creating online courses and other packaged content that you can sell online
- Starting a YouTube channel and experimenting with video lengths that generate ad revenue
Sell products via eCommerce
eCommerce has seen explosive growth that’s expected to continue, especially when you consider how COVID-19 has further sparked the transition from in-person to online shopping. When you sell products online, you can sell to anyone and everyone rather than just local shoppers, though you’ll make the best use of your marketing dollars if you still define a target audience. Popular eCommerce categories include handmade goods (from baked goods to crocheted wallets to customized cufflinks), clothing and accessories, fitness equipment, beauty products, 3D printed products and subscription services. Don’t want to worry about buying and storing inventory? Consider dropshipping.
Bonus option: This one falls along the lines of selling your knowledge, but takes things a bit further. If you think you have the time and skills, becoming an influencer can turn to a full-time career. To become one, you’ll need to start with a blog, vlog or podcast (or all three) supported by social media channels. Focus on something that you’re passionate about and in which you have expertise. If you’re able to grow an online brand that positions you as an expert in a certain topic, you could make money via affiliate marketing or as a sponsored influencer. This is a dream job because it will be doing something you love! However, this strategy can take longer to materialize, and influencers can sometimes get a bad reputation. But, keep in mind that you can “influence” in any niche while offering truly helpful content to your audience.
Steps for Starting an Online Business
If you’re considering starting an online business, these steps can help you prepare a solid plan that sets you up for success before making the leap.
1. Decide What Type of Online Business to Run
From starting a nutrition blog that generates income from affiliate links, to selling tech products online via an eCommerce site, there are many ways to make money online. Depending on the type of online business you start, there’s also a range of potential income levels. As you consider various types of online businesses, decide whether your ultimate goal is to cultivate a side hustle or to eventually grow a business that becomes your primary source of income. Keep that overall goal in mind and be honest with yourself about how much time and effort you’ll be able to give this venture. If your goal is to temporarily supplement your income, for instance, then you may offer virtual assistant services for 10 hours per week rather than launching a YouTube channel that requires more time, attention and energy.
2. Identify Your Target Audience
Now that you know what you want to do for your online business, do some market research. At the very least, consider the types of people who would benefit from or enjoy what you have to offer. Without this information, your messaging can’t be as focused and your marketing budget won’t go nearly as far or achieve much success. But, when you can target advertising to women between the ages 25 and 45 in the U.S. and Canada, for instance, you won’t waste ad dollars telling 15-year-old boys about your handmade face masks.
3. Plan Your Online Business Startup Costs
Once you’ve decided what type of online business you’d like to start and who your ideal customer is, you’ll have a better idea of what you need to begin. For example, if you’re planning to offer freelance graphic design services to small businesses, at a minimum, you’ll need to join on online marketplace and create a professional profile and portfolio. But many online business owners also find they’ll need to create a new website. And if you plan to sell products online, then your website must be able to accommodate an online store.
Consider costs related to:
- A website
- An eCommerce store
- Accounting software
- Marketing budget
- Technical equipment
Once you have a good idea of how much money you’ll need to cover start-up costs, you can then decide whether you can fund your business on your own or seek out other funding options, like applying for a business loan, setting up a crowdfunding campaign or seeking investors.
4. Consider Hiring an Online Business Consultant
If planning your online business feels overwhelming or even if you would simply appreciate the value of working with someone who has more experience with online businesses, then consider working with an online business consultant. These experts help online business owners before, during and after they launch their ventures. Services often include:
- Business model analysis
- Go-to-market strategy
- Technical development of websites, apps, eCommerce stores and other software
- Design (website and UX)
- Marketing services such as SEO, content marketing, digital advertising and more
Ready to Start Your Own Online Business?
Congratulations on your budding online business! Once you’ve done your homework, deciding what you’d like to do and how to monetize it, it’s time to set up shop with your website or other type of digital real estate. We wish you the best and hope you’ll return for more helpful ideas on how to run a successful small business.
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