The internet continues to create new opportunities for savvy entrepreneurs, particularly when it comes to starting an online business. The costs have the potential to be smaller compared to brick-and-mortar organizations, and the audience that your products or services can reach is vast.
While opening an online business has its advantages — working for yourself, lower overhead costs, fewer barriers to entry and access to a global consumer base — you’ll still need to carefully consider the products and services you want to offer and possibly build a website to provide them.
How to start an online business
Starting an online business is more practical than ever. Potential customers are spending more time online than ever before, and many companies require internet-related services. You can run an online business part-time or full-time, and the range of options is extensive.
As you’re learning how to start a company, one of the first steps is deciding the type of online business to run. Consider your skills, any industry-specific knowledge you have and your vision for your life as a business owner.
Your answers may guide your decision. For example, if you worked as a nail technician for a decade, you might decide to parlay that expertise into running an online shop that sells manicure supplies.
Online businesses depend on websites, and you’ll need to build a website to interact with customers. There are several different business ideas to pursue, with some of the most common including the following.
6 online business ideas
1. Ecommerce store
Ecommerce can take many forms, but in general, they involve creating your own self-hosted website that features an integrated shopping cart. You source and list products on the site, customers make purchases and payments via your website, and you ship products to them directly.
One benefit of building an ecommerce site is that you have complete control over what you include. You choose the shopping cart program and fully customize the site’s appearance, which is important in giving customers an easy way to navigate your offerings and request assistance. You’ll also need to negotiate prices on products and a physical space to store products before packing and shipping them yourself.
2. Affiliate marketing
Set up affiliate accounts with companies selling things your readers may want. They may be from a large online retailer with niche products from up-and-coming brands that offer affiliate programs. This can be an easy way to earn extra money as long as the affiliate is a good fit for your readers. If they don’t use your link to click and buy, you don’t get any money.
3. Auction online
To run this type of business, you use an auction website’s online interface to create listings for individual products. You can choose what items to sell on a piece-by-piece basis, which is ideal if you’re initially planning to run your business part-time.
You don’t need to build and manage your own site that incorporates shopping cart technology. However, you’ll have to pay fees on each sale, and you won’t design or brand your own website.
4. Drop shipping
Drop-shipping is a term for selling items that aren’t in your possession and having them delivered to your customer from a third party that supplies the product, like a wholesaler or manufacturer. With a drop-shipping or fulfillment-based type of online business, you don’t keep your products physically stocked at your home or office. You rely on a third-party drop-shipping company to store and deliver your items instead.
There’s usually no financial outlay of money before the customer orders the product. You do need to spend some time figuring out what you want to sell. Depending on the company you choose, you may only need to ship your products to the fulfillment service, and it’ll provide and manage your customer site interface. Or, you might need to run a site that handles your customer transactions before you send the orders to the shipping company, which mails them out.
This option allows you to have a much broader product range than what you might be able to stock at home. However, you’ll need to pay the drop-shipping company for its services.
5. Digital marketing
You might not be interested in selling physical products. Instead, you might consider running an online business to provide services you can deliver via the internet. Perhaps you have a specific skill set, like graphic design, website coding or copyediting. Or, maybe you have expertise in accounting and can provide consulting services to help customers learn how to complete certain tasks.
Provide online services that are in high demand or create a small agency by outsourcing work via work-at-home job posting sites. Some options include:
Building websites and apps: If you’re computer savvy, use your skills to create websites and apps for companies.
SEO services: For websites and blogs to draw viewers, they often need to use search engine optimization, or SEO. SEO improves the placement of a website in search engine rankings and can boost brand awareness.
Social media consulting: Do you enjoy Facebook, Twitter and Instagram? Help businesses build their social media presence by offering your social media services. Businesses need social media for publicity, and many owners don’t have the time, interest or knowledge to do it themselves.
This option lets you use and improve your knowledge base. However, you’ll likely need to build a customized website from scratch that incorporates simple shopping cart software or another format for customers to deliver payment. You’ll also want to draft up a contract so customers are clear on the services they’re receiving.
Anyone can create a blog, and there’s a variety of ways to approach blogging for money. Here are some typical ways that bloggers earn money:
Traditional advertising: Companies buy ad space on the blog, and these ads links to the companies’ sites. You can sell ads by yourself or use advertising networks to put ads on your site that pay you every time someone clicks an ad link.
Sponsored posts: Writing a post that’s paid for by an advertiser is another way you can blog for money.
Promote Products: You can use your blog to sell products, whether those are physical goods or information products such as e-books. By automating the sales and fulfillment processes, this can bring in income even when you’re sleeping or on vacation.
Following legal rules and regulations
All businesses must follow specific rules where applicable, including laws about collecting and paying taxes, regulating marketing and protecting intellectual property. Running an online business also presents a unique legal complication involving your customers’ personal information.
You may be dealing with sensitive details like addresses and credit card numbers, and consumers have the right to keep this information protected. Be aware of certain steps, like building an SSL-encrypted site, to safeguard this information against identity theft, and consider cyber insurance to protect against data breaches and other cyber crimes.
Before you get started selling, familiarize yourself with applicable business laws. The U.S. Small Business Administration has ample resources to help you understand what’s relevant to your company.
Launching an online business can be a great career move. It can give you the opportunity to earn extra money and assume greater control over your professional life. But starting any venture presents challenges that you need to be ready for. Small business insurance can give you peace of mind to protect your company and help you concentrate on building a successful company.