The best way to build wealth today is to use the internet and start your own business. Believe it or not, the internet is still in its infancy, and there are many opportunities for you to still get on board and take advantage of it to build the life you want. Starting an online business is not easy, regardless of what “experts” say, but it’s one of the only ways to build a passive income that can let you control your time.
In this article we’re going to discuss how starting an online business can help you live the life you’ve always wanted, how to find the right business idea for you, and what you need to know to start the online business you want.
If you’re ready to begin your journey, there are many tools you’ll need but two that stand out above the rest. You need to start a website, and you need to keep track of your customers/readers emails. We recommend WP Engine to host your website, if you plan on using WordPress, which powers the largest part of the internet today. We also recommend Convert Kit as the tool of choice to collect and send out emails. No business or tool is better for either solution than these.
If you’re not 100% committed to your business yet, or if your budget is very small, then you may want to consider the best solutions for shoestring businesses. Our best affordable solution for website hosting is BlueHost. And our best affordable email solution is MailChimp.
Starting an Online Business: What You Need to do First
When you’re ready to start your online business, you need to make sure you don’t make the biggest mistake of most online startups – which is not treating it like a real business. All businesses should start with a plan. It’s important to have a blueprint for where you’re going, before you start driving down the road to get there.
Create a Business Plan
A business plan can validate your idea, and help you feel confident in moving forward. Every good business plan includes a strategy, information on your potential competition, and detailed projections for a minimum of 3 years. This helps you understand what your cash flow is likely to look like, and how high your sales need to be to grow the business the way you’d like.
You can read our article on business plans to learn more. If you’re ready to get started, but aren’t sure how to put together a business plan, we suggest using LivePlan to help streamline your process. You can use their software to build a business plan that includes everything you need. If you’re looking to pitch to investors, then LivePlan will help you put all of your business information into a beautiful visual representation that makes it easier to present your business idea.
Set Up a Legal Entity
If you’re going to be starting an online business, and your expectation is that it will make money, then you need to treat it like a business. No one would enter a litigious environment without proper protections. You need to make sure you protect yourself from any actions your business may perform, and you need to do it early on.
There are many different legal entities to choose from, and the right one for you will vary. We generally recommend starting an LLC to protect your personal assets from anything that may go wrong with your business, but how you decide to have your business taxed depends on your own individual situation. Check out our guide to setting up a legal entity for your business for more information.
Remember that these first steps take the assumption that you’ve already come up with the right business idea that you’re ready to move forward with. If you’re not then we advise you to take the advice of Kean Graham, the Founder and CEO of MonetizeMore, who said:
Aspiring entrepreneurs should know that the goal is to fill a gap that currently hasn’t been filled yet. They should find their niche by looking for pains to alleviate or vitamins to achieve strong ROI for businesses or individuals. Once they have chosen their niche, start blogging about it. They should put their strong opinions out on the net and people will find it. Make sure to have an offering that backs up those opinions. If they believe in the power of their offering to provide additional value in their niche industry, they will have a lot to write about on a regular basis and people will find them organically.
Starting an Online Business: Create a Website
You can’t have a legitimate business online today without a proper website. It’s the home of your business, and should reflect who you are while giving your customers an easy way to interact with your business’s products. This involves nailing everything from getting the right domain name, to helping the customer checkout and purchase your product. There are three main steps to creating the right website for your online business:
1. Get Your Domain Name
You should find a name that fully represents your business. It should likely be your business name, but you may have a single legal entity that runs multiple websites. Either way, you need to make sure your domain name easily tells the customer what your business is all about. Not only will it make customers better understand who you are, but it helps search engines find you better.
Every time you register a domain name you must use a domain registrar. Some are easier to work with than others, but all are pretty close in price if you’re aiming for a .com name. Many registrars will buy domain names you check on their site, if you don’t immediately register them. This is because if they own it they can charge you more for it later. These are shady practices, so it’s important to pick a domain registrar that you can trust.
Our recommended domain registrar is NameCheap. NameCheap has an easy to use platform that caters to the user, where you can easily manage all of your websites in a single place. Their prices are the industry standard for registering .com names, and they run special deals on other domain extensions. They are the best in the industry for housing your domain names, and you can be set up in less than 30 seconds.
2. Get the Right Hosting
The right hosting is key to keeping your site running smooth. Speed is one of the most important aspects of your website. It helps you rank better in search engines, and it improves your customer experience. In fact, 40% of all internet users expect your website to load in 2 seconds or less. Your customers are impatient, and as an online business your web hosting is how you make sure they aren’t impatient with you.
You need to find a hosting provider that is reliable, and that can make your customers feel at home when they’re on your site. You don’t want any problems to pop up suddenly, costing your customers in the process. If you have a WordPress site, then we have two reliable providers that we approve of, both of which will take all of your hosting worries away.
The host we use is StudioPress, which is fast and reliable. It costs $27 per month starting out, and you can choose from 20 Genesis themes that are all included. WP Engine is a WordPress host that takes all of the technical aspects of hosting away from you. They maximize the speed and efficiency of your site, and they regularly backup everything in case you do something to mess it up. You can get hosting through WP Engine for as cheap as $29 per month, or even less if you pay annually.
3. Get a Good Design
You need a website design that best shows off your product or service while making it easy for the user to navigate. There are plenty of great looking designs out there, but it’s more important for your design to be easy to use than it is that it looks cool. There have been plenty of studies that show that ugly designs which are easy to use actually convert better than flashy designs.
The best place to go for a good looking and functional website design is 99 Designs. You can submit a query online and get a ton of designs for your website in return. You pick the best one and move forward with that design, being able to have that designer make tweaks to the design that you’ve chosen. This helps you get what you need for your site, and you get it the way you want it to look. Pricing starts at $299 and the whole process just takes a few days.
Find the Right Financing When Starting an Online Business
Many online businesses need very little money to get started. However, most of these businesses also fail to take off. If you don’t have anything invested in the business, then you likely don’t have a reason to fight off all of the excuses when they pop up to not put in the work.
If you instead grow the business by having capital to bring on minimal assistance, and find appropriate advertising avenues, then your business could flourish. The key is finding the right financing partner that can help startups. There are numerous ways to accomplish this, but the best is through a personal loan, since your business won’t have much history. Keep in mind that if you fail to repay a personal loan, your personal assets may be at risk.
When you’ve been in business for at least 1 year then you can find great financing solutions like OnDeck and Kabbage, who can both get up to at least $100K in financing within 1-3 days. When starting an online business you’ll likely need much less money than that though, which is why we recommend applying at Prosper.
Prosper offers a personal loan of up to $35K that they can get you in as few as 2-3 days. You can qualify for rates as low as 5.99% and loan terms of 3 or 5 years if you have a credit score of at least 640.
How to Grow an Audience for Your Online Business
When you’re growing your business online you’re literally fighting for attention. The more time you can get with eyeballs focused on your content, then the better opportunity you’ll have at seeing successful conversions for your product or service. There is a simple, yet time intensive, five step process for growing your online audience:
- Build Amazing Content
- Learn to Rank in Search Engines
- Build a Sales Funnel
- Create Ads & Scale the Ones that Work
- Engage Your Audience
Keep in mind that most of the time you need to do these steps in order, but all of these opportunities can drive steady traffic when done correctly. Now let’s dive into each step in a little more detail.
#1 Build Amazing Content
There’s a reason that everyone refers to content as the king of online marketing. The best content typically controls an industry or market online. It’s the easiest way to attract customers and to get those customers to convert into purchasing something. Online content has made it easier than it has ever been in the history of the world to consume information, and the better your information is the more you’ll compete.
There are plenty of ways you can do this. You can write amazing content, build videos for your customers, dominate a single social media profile that carries an audience, or create high quality audio. We recommend picking a single method and dominating it before trying to branch out. It will help you build an audience quicker, and you can always add more content types later.
Create something that actually helps your target audience. As you learn what your audience needs, or what they feel like is missing from the competition, then give it to them. Use your content to tell the story of how their problem can be solved. If you can figure out a way to do this, you’ll not only succeed with your message, but you’ll get them to convert.
#2 Learn to Rank in Search Engines
Driving traffic should include a variety of sources, such as ads, social media, and search engines. Organic traffic is the best way to build an audience because it’s the most affordable and consistent method of getting eyeballs on your content. Ranking in Google for a strong search term guarantees potential customers will be landing on your website every single month, and these people will be actively looking for what you’re providing.
To rank in search in this day and age you must do two things really well:
Knowing an estimated amount of people searching for keywords each month, and knowing how difficult it will be to rank for those keywords, can separate you from the competition. Even well run websites often write content for themselves based on what their financial partners are doing, instead of listening to what people are actually searching for. If you can write your content with your potential readers in mind, then you’ll be much more successful.
Reaching out and creating online partnerships is a very important piece of the puzzle to your website’s success. Doing effective outreach every single day is important to build the authority of your website. The more sites you can get to link to your content, and the higher quality websites you can get to do it, the higher your search engine rankings will become.
Being able to do the right keyword research requires the right tool. Many tools are very inaccurate, and can lead you down the wrong content path. That is why we recommend using SEMRush. Their keyword search results are more accurate than the competition, and they offer unique insight into what keywords your competition is ranking for. Try them out today for free.
#3 Build a Sales Funnel
If you’re not putting your customers in a sales funnel, then you’re not maximizing the full value of their visit to your website. Whenever they come to a site they can be entering at the top of a funnel (reading content), or they can enter anywhere else along the way all the way down to a direct purchase (bottom of the funnel).
The best online sales funnels involve landing pages directed at specific actions, like getting users to give you their email addresses. If you have their email address then you can insert them directly into a sales funnel that has almost endless possibilities. You can upsell customers who buy, and continue to try different pitches to customers that resist.
The best sales funnel is typically created by a tool that can build highly effective landing pages and deliver an easy to use email solution, all in one. Our recommended sales funnel tool for large purchase sales funnels ($500+) is ClickFunnels. But for everyone else, you’ll likely need ConvertKit, which create landing pages that convert and make them a piece of the funnel that runs through their industry-leading email software. We went through many different tools before finding ConvertKit, and they finally made our process work. If you don’t like the product you can request a refund within 30 days, so you have nothing to lose to try it out.
#4 Create Ads & Scale the Ones That Work
Many online entrepreneurs think that creating and running paid ads is the first step in building an audience after creating the product or website. We’ve already learned above that this is not the case. Instead, running ads should be a piece of what you do to drive traffic and obtain customers. It shouldn’t be started, however, until you’re established and have a sales funnel setup.
There are many different ways to try to get paid traffic to your site, including:
- Google Ads
- Bing Ads
- Facebook Ads
- Twitter Ads
- [Insert Your Social Media Platform] Here Ads
There are thousands of people on the web that will try to tell you which platform is the best, and which one converts the best, but honestly there is no clear winner. How well you understand the platform you use, and what type of business you run, are the two things that will dictate your success. It’s impossible to say that something will work for everyone.
Regardless of how you spend your ad money, you’ll be wasting it if you don’t have the right sales funnel setup for your visitors when they arrive on your site. Once you have figured out your ad campaign that sends plenty of traffic to your site, and you’ve set up a funnel that converts, then it’s time to scale your campaign.
The strategy is simple. You should spend a small amount on your ad campaign until it converts at an acceptable cost to your overall strategy. Once it does, then ramp up how much you’re spending and see the conversions flow in.
#5 Engage Your Audience
Now’s the time to build your traffic from other sources. Find out where your audience and potential customers hang out online, and go to them. Become an expert in those places and find ways to help them. Offer advice, support, and camaraderie without ever asking for anything in return.
Now, obviously you should make sure they understand where the help is coming from. You can do that by putting your website and company name in your profile for those sites, or in your signature to whatever responses or “posts” you make. When someone likes what you have to say then you often won’t need to pitch your site. Instead, they will seek you out.
An example of this is Quora.com. Many websites have seen great success in using Quora as a part of their marketing strategy. They answer very niche questions related to their business, and then customers like the comments and seek the business out. This type of marketing is unique because it’s not exclusively top of the funnel marketing, but it also isn’t’ always bottom of the funnel either. It’s a mix, depending on how you’re engaging with potential customers and what questions they currently have.
How to Monetize Your Website When Starting an Online Business
The possibilities to monetize your site only end with your own creativity. There are numerous ways to go about making money from your hard work, but no monetization strategy will be the same for every business. You need to find one that you’re comfortable with pushing on your site, and one that will inspire site visitors to convert by either clicking or buying.
You should start your monetization from the beginning of your site. This ensures that there are no customer expectations destroyed later by forcing monetization streams. Make it apparent when they first land on your site how it is you make money from the work you put in. It’s our experience that if you’re open and honest about money, then it always is received better by your customers.
When starting an online business there are four main ways you can monetize your site:
- Affiliate Marketing
Affiliate marketing is promoting someone else’s products or services and attempting to send them traffic that will convert into a sale. This was one of the first monetization strategies that made individuals wealthy online, and it continues to be extremely successful today. You essentially put a unique link on your site to the product your service you want to promote, and if someone uses that link to buy then you get a commission.
Affiliate marketing is best for businesses that are focused on content creation and marketing. It’s a natural fit for someone that has built a business around information, but becomes less useful if you’re a product-based business. You wouldn’t want to send people away from your website if your goal is to get them to buy a product.
Pay-Per-Click Ads & Sponsored Ads
Putting a banner ad on a website was the first monetization that popped up on famous websites in the late ‘90s. They became very common before it was even common for every business to have their own website. Have the option of putting something like Google Adsense on your site, which gets you paid every time someone clicks on an ad, or you could find sponsorship deals for your site or for specific content.
These days, pay-per-click opportunities are so easy to come by that they’ve lost a lot of their luster. Site visitors have become immune to seeing these ads, in many cases, and you earn pennies for all the traffic you produce. Sponsorship deals take the worries away, because you get paid a set amount for the time period the article, or site, is sponsored – no matter how many people click on any links. These are harder to come by, however, and the benefit to you mainly depends on how many site impressions and unique visitors you’re getting.
Monetize With Products
Another option is to monetize your hard work by offering a product for sale. This could be the whole purpose of your site (like a SAAS product), or it could be an add-on to your content (like a fan store of merchandise). Either way, products are the ultimate attachment to your customers. You are building and breathing the heart of why your customers are on your site every day, and you own all the successes and failures that brings.
Building products is probably the hardest way to monetize your site, because it 100% is reliant upon you. From the marketing to the execution, to the customer service — it’s all you. If your customers have a problem with your product, they have a problem with you. This can be taxing and cost you a lot of extra resources to properly manage than any of the other monetization methods. But, if you get everything right then it is also likely going to be the most lucrative.
Monetize With Services
Offering services to your customers is a great way to take advantage of a lot of site traffic, and a lot of great content. You can set your business, or yourself, as an expert in a particular field and then market your services to your customers. When you’re the authority on something your customers need help with, they’re a lot more likely to spend money with you. Reading, listening, or watching your content makes them instantly trust your expertise and puts them at ease with buying your services.
The downside to services is that it’s not passive income at all. You will have to put in work to perform a service every single time you make a sale. If you don’t work, you don’t get paid. This is opposite of most online business lifestyle desires, but it works really well. You could build your business up to the point of not having to personally perform any of the services at some point, so you won’t be stuck working your tail off forever.
Starting an Online Business: Advice From the Experts
So you’ve learned that starting an online business can be hard, but hopefully you understand how to best get started. If you get your site off the ground the right way, and stick with it, then you’ll increase your success chances by 100%. For an extra boost of help, we went out and got several experts to give you advice on how to start your business online. Here’s what they had to say:
Begin with a content plan and go from there. Lay out your main pages and themes first, then add your supplementary content around that. Don’t be discouraged if you don’t see traffic immediately either. It often takes 6 months before things really start to take off.
– Chris Brantner, Founder of CutCableToday.com
To grow your online audience from nothing, you need to establish yourself as an expert in your field, an online resource for information about your product or service. These days the consumer is savvy–he does the homework on his own before making a purchasing decision. The fundamental principle of inbound marketing lies in creating content–blog posts, videos, social media content–that will help him along his path to the purchase, otherwise known as the buyer’s journey. Create great content, and publish it on your own channels (like your website) and third party channels (like social media, industry forums, etc.). You should be able to begin generating a viable stream of traffic within the first six months.
– Eddy Hood, Entrepreneur, Author, Business Coach and Founder of The Business of Starting
The MOST important thing for any online business is to first determine WHO you would like to help. Is it males in their early 20’s looking to gain muscle or middle aged females looking for love? This is important, because all of your marketing and content creation will be catered to your ideal customers. It’s a very crowded world on the internet. To stand out, you need to create messages that speak directly to a specific group of people.
– Jason Li, Founder of Mint Habits
Find a way to make money as early as possible. A vanishingly small number of startups actually make a profit. More often than not founders spend far too much time focusing on their product/service and far too little time networking, marketing and promoting in order to get their first few paying customers. Securing a trickle of funds as early as possible is vital because it gets the business in front of customers and reduces the financial burden of starting up. This allows your home business to operate for longer (many small businesses are bootstrapped and fold because they run out of funds before they can become established).
– David Mercer, Founder of SME Pals (Smart Modern Entrepreneurs)
When starting an online business, the first thing to think about is the name and how to incorporate that into your website URL. That sounds simple, but if you’re wading into a very competitive industry, you will need to be creative. The major search engines will pay special attention to the words in your URL. If you choose them wisely and correctly, you will find that Search Engine Optimization will be a little easier as popular keywords will already be included in your site architecture.
– Adam Hyers of Ohio Insure Plan
The Smart Hack
Starting an online business is not an easy venture, but if you stick with it then it could be very rewarding. Not only could it give you the enjoyable work atmosphere that you’re looking for, but it could give you and your family the financial freedom you’re seeking.
If you’re ready to get started today, then we suggest using WP Engine to host your new site. This will build the foundation you’re wanting to build from the beginning at an affordable rate. You can try them out risk-free for 60 days by following our link below.