By Justin Ferris
Thanks to the internet, starting and growing a business has never been faster, easier or less expensive. Whether you want to turn a hobby into a part-time source of income or launch an innovative full-time venture, there are plenty of tools and sources of knowledge to help.
First, a quick reality check. Like any business startup, your venture will need determination, planning, good marketing and a bit of luck to succeed. Despite the stories, very few people become overnight billionaires online. That said, you can make a livable income with the right steps.
1 Start with a plan
There are successful people who have accidentally stumbled into an underserved and lucrative online niche, but it’s usually best to have a plan in mind.
Decide the focus of your business
Do you have a hobby or passion you want to pursue? Is there a specific skill set you’ve developed over the years in other jobs? Have you noticed a gap in the market for a particular service or product?
Try to focus on areas with low overhead such as making videos, shooting photos, writing eBooks, hosting a podcast, consulting, or graphic design. If you do deal in physical items, stick to products with high profit margins or items you would be making anyway.
Look at the existing market
Open up Google and start searching to see who else might be in the same business. Look at the websites they use, how they interact on social media and what kind of marketing they employ. Also, pay attention to what they aren’t doing. It could be because the strategy doesn’t work, but it could also be an overlooked avenue for success.
Play to your strengths
Think of what you can do to make your product or service stand out. If you’re detail-oriented, promote your product’s high quality. Good at interacting with people? Spend time on social media building customer loyalty. Have decades of experience? Highlight your accomplishments.
Don’t discount your weaknesses either. For many online businesses, especially in the arts arena, authenticity builds connection. If your products lack polish, play up the “each one is unique” angle. Share your mistakes or life challenges – at least as they relate to your business. Sometimes buyers want a story as much as the item being sold.
2 Pick your platform
Every business needs a central platform to be the main starting focus. There are endless sites and services on the internet, but here are a few major ones to get you started. Note that most of these are free to use, but take a cut of your profits.
Bandcamp (bandcamp.com/artists) – There are a lot of places you can sell your music online, but Bandcamp generally offers the most profit per sale.
CreateSpace (createspace.com) – This Amazon.com service provides the tools to self-publish and sell eBooks to a worldwide audience.
Ebay (ebay.com) – Resell garage-sale finds, buy low and sell high at auctions, or promote your own self-made items.
Etsy (etsy.com) – The go-to place to sell handmade crafts, art and other custom wares to a receptive audience.
iTunes (itunespartner.apple.com/podcasts) – The most popular place to upload and promote podcasts. You should also post on Google Play (play.google.com/music/podcasts/publish).
Kickstarter (kickstarter.com) – Get funding for your proposed product, film, music, game or other projects.
Shutterstock (submit.shutterstock.com) – Sell your amazing photographs as stock photos.
SquareSpace (squarespace.com) – A popular place to build a business, portfolio or personal website. It includes plenty of easy-to-modify templates and a built-in store option.
YouTube (youtube.com) – The world’s largest video-sharing site lets you attract an audience on just about any topic from parodying popular songs or explaining highly specialized topics to demonstrating a hobby, reviewing products or whatever else you can imagine. Once you get a large enough audience, you can monetize your videos through the built-in ad system.
3 Expand your company
Once your starting platform is established, here are some ways to expand.
About.me (about.me) – Get a free page to promote yourself or your business. You can link to all your sites and social media accounts from one spot.
Bookkeeping – As your business grows, keeping the books gets more important. Check out the free online service Wave (waveapps.com) or the powerful free Quickbooks alternative GnuCash (gnucash.org).
Competing platforms – Spread your brand to similar platforms to see if you can attract a larger or more diverse audience. Just type the existing platform name and “alternatives” into Google.
Google Domains (domains.google) – For $12 a year, you can get a custom domain name that points people toward your website, online store or About.me page.
Keep learning – The internet is full of resources to learn about running and growing a business. Some sites to start with are Entrepreneur (entrepreneur.com), INC (inc.com) and HubSpot (blog.hubspot.com).
Patreon (patreon.com) – Many YouTubers, podcasters and other online creators use this site to raise money. It allows your fans and followers to set up recurring monthly payments to support you, so you can keep producing the work they enjoy.
Social Media (facebook.com, twitter.com, pinterest.com, instagram.com, shapchat.com) – Social media might be one of the greatest marketing revolutions in history. You can make a personal connection to your customers and followers – for free. Each site has its own audience and ways to interact, so try them all to figure out which ones fit your style best.
4 Watch out for pitfalls
While owning your own business holds endless possibilities, it isn’t without some drawbacks. Here are a few things you need to watch out for.
A single account
When you start out, you might be tempted to use your personal banking account for business as well. Do yourself a favor and set up a separate account. Not only will this make bookkeeping easier, but sometimes refund glitches or disputes with a payment processor can lead to an overdrawn or temporarily frozen account. You want to keep your day-to-day money safely out of the way.
As an online business, you will deal with fees from web hosts, payment processors, online stores and even Facebook. Some will be monthly and some will be per transaction. Most services are upfront about these, so keep a running total of all the fees you’re expected to pay. That way you won’t be surprised at the end of the month.
As a business owner, you will get endless communications from so-called specialists, gurus and miracle workers promising to boost your business overnight through Search Engine Optimization (SEO), website updates and social media campaigns.
The truth is – for a small business – these people are largely unnecessary. Most of the sites and tools listed above do the majority of this work for you. In addition, Google, Facebook, eBay and most other platforms offer detailed instructions in their help sections on how to excel on their platforms. If you do want to hire someone, go to a site like Freelancer.com or Upwork.com.
Legal missteps can mean serious lost revenue. Make sure all your legal and financial ducks are in a row.
The Freelance Contract (www.and.co/the-freelance-contract) – For freelance work, an ironclad contract is the best way to ensure you get paid. This website will walk you through the entire process.
The IRS (irs.gov/businesses) – Learn about your tax obligations at every stage of business, plus the deductions you can take to lower your tax burden. If you’re working from home, pay particular attention to the simplified Home Office Deduction introduced in 2013.
Legalzoom (legalzoom.com) – Get all the forms and information needed to create a business or protect your intellectual property.
When uploading any creations to a website, always read the fine print on who owns the rights to your content. Some sites look fantastic until you realize you’re signing over your property to them.
5 Be flexible
Most platforms offer detailed statistics on your visitors so you can tell fairly quickly if something is working or not. You can also easily get user feedback through comments and social media posts. Use that information to adjust your strategy for success, and especially be open to shifting your focus to tap into unexpected markets.
For example, the musical duo The Piano Guys launched on YouTube in 2010 as simple advertising for Paul Anderson’s Utah piano store of the same name. Their creative music and high-quality videos – shot by Anderson – became popular, so they made more. They now boast more than a billion combined video views and regularly tour around the world.
Likewise, the makers of the Raspberry Pi sub-$35, single-board computer originally intended it for educational programming and only planned to make a few thousand. However, DIY electronics enthusiasts quickly discovered it online. In the last six years, the continually upgraded and improved Pi has sold more than 19 million units and boasts an entire ecosystem of related products.
Your business might not see such amazing results. However, with a solid foundation, experimentation and flexibility, you can find your own version of success online. Good luck!