Starting an online business has arguably never been simpler. With so many different industries and niches, you can become a part of, launching a profitable company from your own home is more accessible than ever.
But for your online business to succeed, you will need to run it with a clear plan in mind, armed with plenty of information and research.
Our 11-step guide on starting an online business and 16 profitable ideas get you thinking.
Find a Problem to Solve
All businesses solve problems. Companies are established to solve a particular issue, whether they fix leaking roofs, deliver fresh coffee, or help people lose weight.
The bigger the issue, the more people will be willing to pay for the solution. For example, building a house is a significant undertaking and will thus come with a heftier price tag. Fixing a wobbly chair is a minor problem, so the solution also needs to cost less.
Identify the problem you want to solve first, which will inform the rest of the process.
Identify Your Area of Expertise
Once you have in mind a problem you would like to solve, you also need to be clear on your expertise in this specific area. What qualifies you to help people tackle this particular issue?
The more experienced and knowledge you have, the more your customers and clients will trust you. It doesn’t mean that you can’t start selling socks online because you’ve never manufactured a sock yourself, and it’s just a way to pinpoint the kind of online business idea you are likely to be most successful with.
Research the Current Market
Now that youʼve landed on a specific online business idea, you want to do some market research.
What kinds of solutions are currently available? How much do they cost? What is the typical quality of services or products in the area you wish to target?
The more you learn about the state of the market, the easier it will be to come up with a plan that can help you make a name for yourself. You may also discover that it is entirely saturated and has very little room for your business idea.
Analyze Your Target Audience
You should also take some time to get to know your target audience and their interests.
What do they like about the currently available solutions, and what don’t they want? Where do they hang out, and what kind of marketing do they respond to? How can you get potential customers to switch over to your brand?
By knowing your audience well, you’ll be better able to create products or services that answer their unique needs and desires. Plus, youʼll be able to make your marketing strategy more effective.
Analyze Your Competition
Competition research is not the same as market research. The latter gives you a general overview of the climate in the market segment you are about to enter, while competitor research dives deep into the practices of individual companies.
Take a look at everything from their stock (or service concept), their pricing, website, social media presence, marketing strategy, etc.
The information you gather will help you differentiate yourself and offer something to your audience that they have failed to. You will also be able to price your solutions better, and you might even identify a gap in the market that you can fill.
Consider Your Monetization Options
You also want to identify as many revenue streams as possible. The more of them you have, the easier it will be to value your online business, and It will also be worth more, which is an essential consideration if you ever choose to sell.
Depending on the kind of business you establish, you will have access to different monetization options. For example, a blog can earn revenue from ads and affiliate programs. However, if your blog is about guitars and you play very well, you can also offer online lessons.
Don’t spread yourself thin here. Select one avenue, to begin with. You can easily add another once the first one has started paying dividends.
Determine the Legal Implications
You also need to know what kind of legal framework your new business needs to operate in. Are you running it as an LLC, or are you registering as a freelancer?
Depending on where you live and the kind of business youʼre setting up, you may encounter different legal hurdles or schemes that will help you grow faster. Check your local laws and regulations and look for any programs or projects that can lend a hand.
Consider the Costs
Before taking that first step and registering your business, make sure you carefully consider the cost of running it.
Most online businesses come with some initial investment. It might be small, but you need to know precisely what it is. You might need to pay for a domain name and hosting, invest in the stock, or hire someone to help you out. Hold off on the launch until you can fund your business for the initial 12 months.
Develop a Marketing Plan
You should also be clear on how you will be marketing your new online business and how youʼre going to attract customers or clients.
Consider what you are good at. For example, if you hate spending time on social media, don’t make it the focal point of your marketing strategy.
All the research youʼve done so far will help you identify the best marketing avenues and create a viable plan for those all-important first months.
Set up a Platform
Finally, the time has come to set up your business. You will need an online hub: a website, a blog, a store, or a social media profile.
Do some research beforehand and identify your best options. For instance, there are numerous CRM systems available, and you don’t want to find yourself having to move a year from the launch.
No matter how well youʼve done your research and how good your initial idea is, you will begin to learn and gather the kind of information that can genuinely help you grow only once youʼve started your online business
Don’t make the mistake of staying inflexible. The longer you are in business, the more you will be able to tweak your solutions, voice, and online presence. Be ready to adapt and change as your business needs you to.
16 Profitable Online Business Ideas
Now that you know how to start a business, let’s take a look at some profitable business ideas, in no particular order:
- Start an eCommerce store. You can sell anything and be extremely niche or incredibly broad.
- Start a dropshipping business.
- Launch an affiliate website. It is easier. You can promote the products you already use or review the ones that are useful for others. Then you can get paid by your referral links.
- Start a blog.
- Launch a podcast.
- Start a YouTube channel, TikTok, or an Instagram social media account.
- Sell your services. Design, digital products, development, and copywriting are all in high demand, but they all require a particular skill set. So, unless youʼre already very good at it, you can start by enrolling in a course.
- Offer social media marketing, social media platform management, or paid advertising services.
- Get into SEO. You can specialize in one piece of the SEO puzzle, like on-page optimization or link building, and build a business around that one service.
- Offer translation services.
- Offer editing services. You can edit both written and visual content, other people’s business ideas, and anything that comes to mind.
- Start a photography business. You can specialize in taking photos of pets or weddings or freelance for magazines and blogs; you can also sell your photos online.
- Start a tutoring business. You certainly have a skill you can teach, whether cooking, knitting, cleaning, or advanced mathematics.
- Become a personal or a virtual assistant. A virtual assistant is great for people who are too busy to attend to all the tasks they need help with, so they can pay someone to do it instead. Tasks could include taking messages, scheduling meetings, making travel arrangements, emailing, and much more.
- Get into data entry.
- Start a transcription service.
You can do anything and start any kind of business as long as you can sell this product or offer this service online. Also, don’t forget that you need a certain level of expertise if you provide a service. Don’t expect to learn on the job, as your initial clients won’t be satisfied, and you want to secure those positive recommendations from the start.
What‘s the difference between a business and a job?
– Businesses have owners who own them. Jobs don’t.
– Businesses can be run by one person, but jobs require teamwork.
– Businesses pay taxes, while jobs do not.
– Businesses create wealth, while jobs only provide income.
Should I quit my job or start an online business?
– If you can afford it, quitting is probably better than starting something new.
– Start with a side project that will be fun and easy to build.
– You’ll have less stress if you work on things you enjoy.
– It’s easier to get started when you don’t need to pay rent.
What’s the best time to start an online business?
– When you have something to sell.
– When there is a lot of demand for it.
– When you can do it yourself.
– When you don’t need much money.
– Start when you feel ready.
– There’s no one “best” time.
What’d be the ideal business model?
– The ideal business model is one that generates revenue without spending money on marketing.
– The ideal business would generate revenue by selling products directly to consumers.
– The ideal product would be something that people want but don’t know they need yet.
– The ideal business model is one that allows you to make money while you sleep.
Starting an online business is less than half the battle, and running and sustaining it is where the true challenge lies. But if you follow the steps weʼve outlined, you should have an easier task ahead. Don’t forget that you need to be adaptable and keep an eye out for the latest monetization options available in your line of work. As the internet keeps growing, so do the different ways to earn money by working online.