An online business gives a business owner the flexibility to live a life by design.
An online business can also:
- be location independent;
- have the hours you choose;
- be a side hustle or a full-time business that scales;
- operate as a solopreneur, a small team or a large organisation;
- lead to financial independence;
- be scalable;
- be environmentally sustainable and zero-carbon;
- be a b-corp;
The massive variety of methods to make an income online and online business models to investigate can be mind-boggling to begin with.
You may choose to start an online business for any number of reasons.
For me, it was simple. I wanted to reach financial independence. I didn’t want to be solely reliant on a job for income, I wanted to live very intentionally and I wanted to do work that aligned with my values. What’s your why?
Types of online business:
There are essentially four ways to make money online:
- Sell physical products (i.e. jewellery, clothes, furniture, etc.)
- Sell digital products (i.e. courses, books, content, software, etc.)
- Affiliate marketing where you market or sell other people’s products for a commission
- Sell services (i.e. consulting, coaching).
Another way to look at these online business options is that you could be an:
- Online content creator: blogger, vlogger, podcasting, Instagram influencer, etc.
- Online coach or consultation
- Software creator
- Affiliate marketer
- Online course creator
- Online shop / e-commerce business
Some online businesses cover a few of the above to give them a variety of income streams.
Where to start in creating an online business?
Starting a business online is no different than any business. There is a proven (and repeatable) set of steps to guarantee your online business success. Thousands of people have started and grown successful businesses.
Anyone, from newbie to seasoned online entrepreneur, can benefit from following the lean business process in learning how to start a business online.
Your business plan
Create a map – a simple one page map to give you a reference point and develop a clear plan on how to grow your idea into something bigger.
This is a one page business plan. There’s another version of the business plan canvas here.
Bookmark it and come back if you want. Setting your vision, goals and intention can be very powerful.
Starting your online business – find a need and fill it.
A lot of people looking to start an online business will start with a business idea.
Many start with a product, “We will sell xxx”. Often lured by an advert offering the dream lifestyle and lucrative returns
But the first and a very real and needed challenge to tackle is actually to find your market or audience. The second is to check that your idea, fills a need. In other words, will people pay money for what you are offering? This is product-market fit.
I JUST WANT TO START: If you are inspired and motivated to get started. Then DO IT. We have created a starting your online business guide here to help you get the barebones in place: a business name, website address and website. Then come back and read on to get your product and market aligned. Need a little more help to define your ideas? Check out our business focus workbook.
”A report issued by CB Insights reveals that 42% startups fail because they fail to analyze the needs and demands of target customers beforehand, and 29% startups fail as they end up burning all their cash and collapse financially.” – you can read more on designhill.com
This is sobering. But if you read this and action it. Identify target customers and work to fill their need. You are on the right track to success. This is the reason design thinking is so popular. Its about gaining a deep understanding of your users and their problems before you start to design your product.
If you find a group of people who are searching for a solution to a problem, but not finding many results, there’s potentially an opportunity there.
We all know diving into solution mode is much more fun. But ultimately it reduces your chance of success.
The Product-Market Fit Pyramid is an actionable model that defines product-market fit for your online business using five key components. Each component is a layer of the pyramid and is directly related to the levels above and below it. From bottom to top, the five layers of the Product-Market Fit Pyramid are: your target customer, your customer’s underserved needs, your value proposition, your feature set, and your user experience (UX).
This aligns with the Lean Product Process which consists of six steps:
- Determine your target customer
- Identify underserved customer needs
- Define your value proposition
- Specify your Minimum Viable Product (MVP) feature set
- Create your MVP prototype
- Test your MVP with customers
You can find the actionable steps here.