You could start an online business within the next 24 hours.
There’s not much stopping you. Online businesses are very easy to start.
But a better question to ask might be ‘should I start an online business?’
The answer to that question could be no. At least for now..
The five questions in this article are going to help you decide whether you should start an online business now. Assuming it does make sense for you to start an online business now, these questions will also help you determine the best type of online business for your personal situation.
1. What Are Your Strengths & Interests?
Building a profitable online business will generally take a lot of time and effort. You need to be prepared to spend long hours working on your business without getting much in return.
When you build a business around your strengths and interests, it will be much easier to put in the hours needed to make it successful. You’re less likely to lose motivation and quit.
People are often drawn to online coaching and consulting business models because there is potential to start generating a decent income relatively quickly. You find five clients to pay you $2000 per month and you’re already earning $10,000 per month.
But to be successful with this business model, you need to be strong in sales and communication. If you can’t sell or if you don’t enjoy selling, it probably won’t work. You will quickly lose the motivation needed.
If you enjoy writing, then perhaps blogging could be a good business for you. Or if you enjoy teaching others, then you might consider starting a YouTube channel. A YouTube channel can be monetized through advertising or you can sell your own products to your viewers.
2. How Much Time Do You Have?
Some types of online businesses require much more time than others. If you’re working full time and have children to look after, you may not have the time needed to run a client-based business for example.
If time is scarce for you, consider types of businesses where it’s possible to outsource much of the work. This is a good option for those who are working full time and willing to put some of their full time income into the business.
For example, it’s very easy to outsource content writing if you’re thinking of starting a blog or a Kindle publishing business. You can also save time by outsourcing things like graphic design, social media, advertising and SEO.
On the other hand, if lack of time is not such an issue, you will have many more options available to you. You will be able to use your own time to speed up the growth of your business. And that time can compensate for lack of funds, if you’re not ready to invest a lot of money in your business yet.
3. How Much Money Do You Want To Invest?
One of the biggest advantages of online businesses is the low start-up costs. You can often get started with less than $500.
If you’re looking to start a business with minimal upfront costs, then a service based business or blogging are good, low-cost options. Both can be started easily with less than $500.
But if you’re thinking of developing your own physical product to sell through Amazon or Shopify, then be prepared for high upfront costs. Dropshipping is a popular alternative to selling your own products because it requires less investment. But you will still need to invest money in marketing to drive sales.
This question is also closely related to the previous question. You need to consider how much time you have available. An online business can be built through time or money.
If you don’t have much time available, then you will have to be prepared to invest more money. How much you need to invest will depend on how quickly you want the business to grow. This leads to the next question…
4. How Soon Do You Want To Make A Profit?
If you’re in a desperate situation where you need to make money quickly, I suggest starting a client-based service business. This is the fastest path to a profitable online business.
Services you can offer to clients include graphic design, writing, social media management, video editing, translation and consulting. With most of these services, you can work with clients all over the world, not just locally. If you work hard to find clients, you could potentially earn a full-time income within your first few months.
Service-based businesses do require a lot of time however. Firstly you will need to spend a lot of time finding clients. Then you will need to spend a lot of time delivering on the service and managing your clients. Depending on the service, you may be able to outsource some of this work if you have the money. But it will never be fully hands-off.
If you’re not in such an urgent situation, you may be better off looking at other online business models. Blogging, affiliate marketing, e-commerce, influencer marketing will all take much longer to generate consistent income. Don’t expect to replace your full-time income any time soon with these businesses.
But if you’re willing to delay profitability, these business models can be highly rewarding and provide an incredible income for you in the future.
A blog, YouTube channel or affiliate marketing business may take several years to develop a consistent income. But if you’re willing to stick it out, they can become highly profitable assets that continue to reward you for years to come.
5. How Much Existing Online Business Knowledge Do You Have?
How much do you know about running Facebook ads?
How about Google Analytics? A/B testing? Search Engine Optimization? Content management systems?
If you’re not already familiar with these areas of online business and digital marketing, you can expect a long learning curve. Unless you partner with someone else who is more familiar with online business or you outsource, some business models will be very challenging.
On the other hand, you may already be experienced with online business and marketing. In that case, you will have many more options available to you.
A service-based business could be a good option if you don’t already have a lot of online business experience.
You could build a freelancing business through a website like Upwork or Toptal. Using these freelancing websites, you can start earning an income online with almost no online business and marketing knowledge.
Other online business models such as affiliate marketing, digital product sales or e-commerce will require more knowledge if you want to be successful. If you don’t already have this knowledge and don’t have an expert to partner with, it’s going to increase your time to profitability.
You will need to spend much of your first year or two in business just learning about online business and digital marketing. There are courses and mentorship programs available that may help to cut your learning time.
But as I discuss in other posts, many of these courses are sold by gurus who are good at selling their own products but offer little value in their courses. I would recommend avoiding most $1000+ online courses and instead look for lower priced courses on sites like Udacity and Udemy. You can even find many high quality free courses.
Before jumping into an online business you should carefully consider each of these five questions. They will help you to decide on the best business model to pursue.
But you should also be open to the option that online business may not be a good option for you right now.
If you’re working full time and short on spare time, then you should carefully consider your options. It may be better to wait until later when you have fewer commitments and more time to focus on a business.
Building an online business is not easy. Marketers will often try to make it sound a lot easier than it really is so they can sell you their courses. But the reality is, a successful business will require a lot of time and or money to succeed.
You may also consider starting your business as more of a hobby initially rather than a money making machine. This is a great option for people working full time. It takes a lot of the pressure away from you and it doesn’t need to cost you much.
If you’re fully committed to starting your business and becoming profitable, take time to evaluate different types of online businesses. You can try a few different models but at some point you will probably need to fully commit to just one of them.
Steps To Starting An Online Business in Australia (Also applies to other countries)
Marketing Psychology Principles You Should Know (Includes examples)