This article originally appeared on The Financially Independent Millennial and was republished with permission.
The views and opinions expressed in this article are those of the author only and are not endorsed by Credit.com.
Everyone can start an online business. No massive bank balance, college degree, or extensive work experience is necessary.
All that's required is an excellent idea, the right systems, and the motivation to become financially independent. Now, since you're currently searching for ways to start an online business, odds are you already have the drive and the idea part down (if not, that should be handled by the end of this piece).
What you're interested in finding out is how to begin the building process of your online empire. In this article, we'll discuss the exact steps needed to start an online business. So, you can ensure that the right systems are in place.
Step 1: Pick a Business Model
Step 2: Choose a Target Market
Step 3: Find a Problem to Solve
Step 4: Evaluate Your Idea
Step 5: Competitor Analysis
Step 6: Carry out Market Research
Step 7: Cover the Legal Aspects
Step 8: Resell or Develop Your Service/Product or Promote a Skill
Step 9: Generate Sales
Step 10: Grow Your Business
Before you launch an online business, it helps a great deal to know about the current tried-and-tested web business models. That said, there are six primary types of online business models that you can be a part of:
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Affiliate Marketing: This is a business model that involves you promoting other people's services and products online, and in exchange, you receive a commission for every sale. Ultimately, with the right traction, this can turn into a passive income business model.
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Freelancing: In the freelance business model, you simply need to provide a service to other businesses or individuals, using a skill that you possess such as programming, designing, writing, or advertising.
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Consulting and coaching: If you're up for this business model, it involves coaching and offering consultations based on your expertise, in exchange for payment. This business model usually works great if you already have an established name in your field or target market. But even if you don't, you should have a rare skill that's currently in demand.
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Information Products: With this, you can package and market your expertise in templates, online courses, ebooks, and worksheets. The trick behind this kind of business model is to ensure that the knowledge that you intend to sell isn't easily accessible on the web or widely known.
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Software-as-a-service: Roadblocks abound these days, and apps are created to solve everyday problems, whether in business or personal life. With this business model, you create an application or software that satisfies the needs of users in the target market, and charge them a recurring subscription fee in exchange for access to your software or application.
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E-commerce: There are so many ways you can sell products online. You can go through the process of using e-commerce platforms to create an online store and sell your products from there. Or, you can simply resell already existing products on the web, without having to create a store.
Related Read: Is E-commerce a Viable Business Avenue Post-COVID?
Identifying or choosing a target market is a vital step. There's just one winning strategy: carefully identify your target market and send a superior offering to the market.
Here's a no-brainer trick–ensure that you're a part of your target market.
If you've been fishing all your life you'll know and understand the desires, language, and problems of other fishermen. The result–it'd be a lot easier to sell fishing products online.
Additionally, your marketing endeavors will be a lot more successful, as you would have a better grasp and understanding of the best mode of communication with other fishermen.
But if you've never gone fishing in your entire life, there'll be a lot of struggle to sell fishing products online.
When considering launching an online business, you must note one major thing: every business solves a problem.
Hollywood movies eliminate boredom, fulfill curiosity and interest, as well as grant the desire to escape and relax. Plumbers fix broken pipes. Fashion brands help people feel good and express themselves.
Here's the rule of thumb: The larger the problem you fix and the better you fix it, the more cash consumers are willing to pay for your services or products.
Take healthcare services, for instance. They solve a huge problem, which is the reason why almost everyone spends money on it.
Alternatively, not a lot of people will be willing to pay you to fix their wobbling table. It's not a massive problem, and most times, they won't need help fixing it.
The bottom line is that if you want to start a business online, you must find a worthy and sizable problem to solve.
That said, how do you know what problem to solve? Easy. Join online forums and Facebook groups and find out what people need help with, or can't do without. You can also use a tool like Google Keyword Planner to know what people are currently searching for. Alternatively, you can search for successful online businesses and identify the problems they offer solutions to. Then, find a better way to do it and offer that as a solution.
Every business starts with an idea. If you already have one, you can hop over to the next step. If not, you've got to begin brainstorming.
Anyone who intends to start an online business must not sleep on analyzing the competition. Competitor analysis helps you to remain at the cutting edge of what consumers in your niche want, anticipate market shifts, and identify winning tactics. It also helps in defining your positioning, messaging, and total business strategy.
As you take these measures, ensure that you record your findings with information on each approach. You must find relevant insights when needed.
By analyzing your competitors' customer experience, as well as how they engage with their target audience via content, you can discover tactics that your competitors use to push sales.
A SWOT analysis is also worth considering, as it can help in accompanying the discoveries from your research. The SWOT analysis is a blueprint that looks into your competitors' weaknesses and strengths to define areas that require improvement.
The goal of carrying out market research is to understand average consumer behavior and pain points, as well as relevant market trends in your niche.
This is a great way to determine how your online business will fit into the current industry landscape.
One of the easiest ways to gain accurate insight is to interact with consumers directly. Make questionnaires, take surveys, and carry out one-on-one interviews.
Every business that you start has to be adequately aligned with the regulations and laws of your region. Read up on the online business legal requirements before starting a fresh web business.
Here are a couple of legal bases that you need to cover:
You may have to register as a sole proprietor or an LLC. Carry out the research and choose the one that's best suited for your current and future needs. But it may help to get the advice from a tax specialist.
Depending on the kind of business you intend to start, you may have to get a license to operate it. This differs based on where you reside, so reach out to your local state department to know more.
A lot of online business owners are required by law to pay income tax. Also, you may have sales tax obligations if you decide to offer products to people in particular countries. Before you begin your online business, make sure that you speak to an attorney to understand the applicable taxes and the Internet business documents that you must possess to file them.
You'll want to cover the above legal elements to limit or avoid trouble in the future. For instance, registering your trademark will stop all the businesses from using your company name, which saves you the cost and hassle of rebranding.
When it comes to online businesses, there are three ways you can bring your idea to life: promoting your skill, creating your product/service yourself, or simply reselling.
If you decide to go with the third option, all you need is to find a product or an e-product that's relevant to your niche to resell.
Next, find a marketplace to resell the product. To make the process easier, you can use a cross-listing app that allows you to post your product on numerous marketplaces such as eBay, Poshmark, Mercari, etc. all at once. And that would be all, you then need to jump to step 9.
But if you decide to go with the second option, you need to hire extra hands. For instance, if you want to create an app, you need someone with technical experience to help you out. If you intend to mass-produce an item, you need a manufacturer.
Product quality and simplicity must be your top priority. Instead of developing the cheapest product, create something that captures your target audience's attention.
For service-based offers, your main focus should be on hiring people with the necessary educational and certification requirements. You can use online job portals like ProBlogger and Upwork as a start.
If you simply want to offer your skill online, based on your market research, promote your skill in places online where they are needed.
For example, if you have copywriting skills, you'll want to start promoting them through online job portals such as Freelancer or Upwork.
To generate sales, you have to start by understanding your potential customers–their dislikes, likes, wants, and needs. After this, understand the art of requesting commitment without coming off as too pushy.
Simply put, don't coerce people to buy goods from you or they won't come back.
You have to prepare yourselves to hear "no" as well.
People may listen to your pitch even though they have no intention of purchasing, simply because they're nice. If they don't end up buying from you, don't feel bad.
At this point, your goal should be to grow a customer base online via social media promotion, Google ads, and SEO (search engine optimization). You must also identify the right sales funnel and methodology for your business to generate leads and successfully convert them into loyal customers.
Marketing and sales are the strength of a successful business, so ensure that you have an amazing strategy.
Related Read: How to Support Small Businesses
You need to have a growth plan if you want your online business to scale. Fortunately, there are so many ways to boost your company's growth.
A great recommendation is the use of the power of social media through paid, influencer, and organic campaigns. Email Marketing also works great to foster and nurture a loyal customer base.
One of the primary aspects of sustainable, long-term growth is having a dedicated customer base and cutting down customer churn. Every effort you put into nurturing your current customers can be profitable in the long-run, when they become returning customers–which ensures revenue long-term.
That's a wrap! We've covered all you need to know to start an online business. So, get started right away. Taking the first step can be intimidating, but take the plunge without fear and launch your business.
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