This guide on how to start an online business helps people become home-based entrepreneurs operating over the internet. While this requires a significant amount of upfront work and dedication, it doesn’t require a lot of money. In fact, Incfile reports, “44 percent of home-based businesses are started for less than $5,000.”
“The beauty of the internet is that you can quite literally launch a business and make money online with very little to no capital. If you understand the mechanics of online marketing, or if you’re great at social media, you’ll clearly find it easier. But you don’t need to be a pro to start your business online,” says the founder of WanderlustWorker.com, R.L. Adams, for Entrepreneur.
Launching an online business starts with these steps:
- Finding a “blue ocean” business idea.
- Connecting with fellow online entrepreneurs.
- Getting in touch with marketing professionals.
- Having a website or sales page in place.
- Preparing, promoting, and launching the online company.
Dive into this step-by-step guide to starting an online business with minimal upfront capital and start making money from home in a matter of weeks.
Step 1: Find a “Blue Ocean” Business Idea
Before starting a business, read Blue Ocean Strategy. This book by W. Chan Kim and Renée Mauborgne is a helpful guide for anyone interested in beginning their own company. In short, discovering a “blue ocean” idea helps new entrepreneurs carve a unique space for themselves within their market. The Blue Ocean Strategy website defines this term as: “the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is based on the view that market boundaries and industry structure are not a given and can be reconstructed by the actions and beliefs of industry players.”
To avoid “red ocean” business ideas in oversaturated markets:
- Conduct market research and discover competitors.
- Find the unmet needs of customers.
- Think about how you can put your own spin on the industry.
Reading this book before solidifying an online company idea teaches people how to position themselves in the industry they’re entering into with optimal success. Without this knowledge, new business owners might create companies that don’t meet the needs of customers within their target market.
Step 2: Network with Other Online Entrepreneur
After deciding upon a blue ocean business idea, start connecting with fellow online business owners. Begin by making a list of 10-15 people who have similar career paths. Next, find a way to connect and then reach out to each person. “Get to know the person you plan on talking to in advance. By doing thorough research, you should gain a rough idea of how you can appeal to that contact. Really think about that two-way connection,” Elizabeth Gore, president of Alice, told an audience at Inc.’s Founders House at SXSW event.
After finding a path of connection and sending each person a message, ask if they’re available for a quick meeting. If the person is an experienced business coach and mentor, don’t be surprised if they say “yes,” but also provide pricing options. This is extremely common in the world of online entrepreneurship. As a new online company owner, investing in conversations around the business can save a lot of pain and money. If there is not a budget for this, there are plenty of free meetups and networking resources available. Visit this site for local events and entrepreneurial groups.
If meeting with several experienced online business owners, start preparing beforehand. This helps new entrepreneurs show up with meaningful, value-driven questions.
For example, ask open-ended questions such as these:
- What should people know before launching a product or service?
- How do new business owners increase their success online?
- What are the three most important lessons you’ve learned as a home-based entrepreneur?
- In your opinion, how do you think I can improve my business idea?
- Who else would you recommend I speak with?
In addition, always follow-up after the meeting and thank each person for their time. Sending a handwritten note or a thank you gift helps build important professional relationships and shows gratitude. Whenever possible, go the extra mile. Working on these connections creates an important support network for new entrepreneurs, and can often lead to sponsorships, partnerships, and other business opportunities.
Step 3: Consult with Marketing and Branding Professionals
For those who aren’t experienced marketing professionals, terms like SEO, SEM, A/B testing, marketing funnels, landing pages, drip campaigns, and brand experience might sound foreign. Knowing every facet of online marketing requires years of experience. In addition, this world constantly changes, so it also demands continued education and learning. While there are plenty of marketing skills new business owners can easily learn online, becoming a marketing and branding expert in a short period of time is highly unlikely. Consulting with marketing and branding professionals helps people realize which duties they can tackle and which ones might require additional support. Because of this, out of all the steps in setting up an online business, this one is the priciest.
So how much does starting an online business cost when it comes to branding and marketing?
This depends on who is hired and what their experience level is. Prices could range from a few hundred dollars to $50,000+ for branding and marketing services. When opening a business online, more than likely, keeping costs low is the ultimate goal. This requires creativity. Some options for this are profit-sharing and partnerships. Be honest about what you can offer, instead of asking people to work for free. Tell freelancers or consultants about the company idea, show them a business plan and offer them a stake in what’s being built. Explain the value of the business and ask them if this is an option they’d be willing to receive as payment.
If trying a hand at doing marketing and branding alone, read these excellent books first:
- Building a StoryBrand by Donald Miller
- Designing Brand Identity by Alina Wheeler
- This is Marketing by Seth Godin
- Starting an Online Business All-in-One for Dummies by Shannon Belew and Joel Elad
Step 4: Create a Simple Website or Sales Page
The next step in opening an online business is having a website in place before the launch. For those on a budget, building a website can be done through sites like WordPress, Squarespace, and Wix. These are three of the most commonly used sites for low-budget website creation. Having a working knowledge of basic web coding also comes in handy. Check out Jon Duckett’s HTML and CSS: Design and Build Websites before working with content management systems and web development tools.
ClickFunnels™ is also another great web resource for selling products and services. While there are a few tricky aspects to this platform, overall, anyone can learn how to use this tool for online sales. Within the portal, there are resources for creating anything from webinar funnels to long-form sales pages. For online business owners taking on this responsibility, pair ClickFunnels with Russell Brunson’s, The Funnel Hacker’s Cookbook.
There’s a lot that goes into completing a website or long-form sales page. Both require mobile optimization and SSL certificates. In addition, as of July 2018, Chrome started marking all sites as unprotected if they don’t have a Secure-Socket Layer/Transport Layer Security certificate (SSL/TLS). Here’s some information on Google about obtaining an SSL certificate. Missing this step severely minimizes traffic coming to the website or sales page. Google’s Transparency Report shows 90.2 percent of web traffic on Chrome comes from secure sites. Before opening an online business, make sure web pages have the golden HTTPS seal of approval.
Step 5: Strategize Your Launch, Then Start Making Sales
During the marketing phase, take notes about the assets needed before launching the business idea. Next, develop phases for each stage of the launch. Set a launch date and work backward from the set date to the present date. What does each part of the process look like? Which tasks require completion? What dates are set for achieving every phase leading to the launch? Be specific and visualize each phase from start to finish.
When building the launch plan, don’t forget to include ideas for:
- Starting social media accounts and generating buzz.
- Developing partnerships with people to promote the business.
- Gathering credible testimonials for marketing materials.
- Creating leads magnets and email campaigns.
In addition, add the delivery method for the product or service to the business launch plan. Dropshipping is one low-cost method with little overhead for online business owners. “The biggest difference between dropshipping and the standard retail model is that the selling merchant doesn’t stock or own inventory. Instead, the seller purchases inventory as needed from a third party—usually a wholesaler or manufacturer—to fulfill orders,” defines Corey Ferreira in an article for Shopify.
Creating a launch plan guides the entire process and identifies places requiring adaptation before the business opens. Many companies also do a “soft launch” which provides limited access to products and services. Gradually growing into the launch allows space for making improvements demanding attention before servicing more clients and customers.
Become a Home-Based, Online Entrepreneur
After new entrepreneurs follow these five steps, the preparation for opening an online business from home is almost complete. Before exchanging products and services for money, ensure that all legal requirements like registering the company name and getting a federal tax ID are taken care of.
For a list of the more technical steps required to legally open, visit this article on starting a business. After addressing these measures, your online company is officially ready for operation.