This is Part 1 of 8 in our newest series, How to Start Your Own Online Business.
One of the questions I receive most regularly is,”How do you make money online?” After all, who wouldn’t want the opportunity to work for themselves, on their own time? And the freedom to work anywhere you can find an internet connection is glorious.
Starting an online business has the potential to be a rewarding – and lucrative – venture. With the right tools and enough dedication, you can turn a hobby into a side hustle that pays your student loan bill or car payment each month. It may even turn into a full-blown business that allows you the financial independence you’ve always dreamed about.
I’ve spoken a bit about my own blogging start in the past (check out DR 200 for more), but here’s a rundown for those who weren’t around for the previous podcast. I started Dough Roller in 2007 as a mere hobby. I worked hard at building the site and, over time, my hobby turned into a business. Dough Roller’s success allowed me to retire from practicing law this year, at age 49. I never expected my “hobby site” to have such a significant impact on my life, though.
Over the next 9 weeks, I will be delving into the topic of online entrepreneurship. We’ll be going over how to get started, finding your niche, struggles you might encounter, what you really need to ensure success, and how taking this leap could be your first step to financial freedom.
So, join us through this series. I hope you’ll learn enough to confidently take that first, prepared step toward your own online business. [You can subscribe on iTunes here.]
Today’s topic is more of a 100,000 foot-level view of what it takes to start an online business. We are first going to look at the key components of any online business. Then we are going to cover what it takes (and what it doesn’t take) to run an online business such as a blog.
3 + 1 Components of Any Online Business
In my opinion, there are three very important components that are necessary to make it in the online world, all wrapped into a fourth. I think of these a bit like a Venn diagram — you know, the kind you made in school with the circles that overlap. Each circle of this diagram represents one key aspect of starting your online business, which cannot be overlooked.
So, let’s get started with number one.
Regardless of the nature of your venture, technology is a must. It doesn’t matter if you want to blog (like I did), start an ecommerce site, or offer nutritional consultations over Skype. Technology will be one key ingredient to your online business.
This includes everything that makes your online business run, well, online. You’ll need a website, a domain name, and somewhere to host the site. If you’re running a blog, you’ll need blog software (I use WordPress). If you want to send out newsletters, you’ll need the technology to collect and send emails. If you want to sell your wares, you’ll need an online shop, and the ability to accept online payments. You get the idea.
Some businesses have more advanced technological needs than others, but there’s no way around it: technology is an integral part of your online venture. We will dive deeper into Technology on our next podcast, Part 2 of the series.
Your website will, of course, need to contain some form of content. Something that people can come to your site and consume.
That may be a multitude of blog articles, as we have here on Dough Roller. That might include videos or podcasts or even something as unique as a personally-developed online tool. Even a blog on a Silicon Valley tech company has content. There’s no way around it.
Just as a brick-and-mortar shop wouldn’t survive without customers walking in the door, your online business cannot thrive without online traffic. You absolutely need people visiting your site, whether it’s to read your content, download your ebooks, or buy your crafts.
Without building up a flow of traffic, your chances of turning this online business into a lucrative venture are nonexistent.
All Rolled Together…
You remember how I said three components wrapped into a fourth? Well, I think of it this way because I picture our Venn diagram as having a big circle around it; this is the fourth component, Monetization.
You already know how important it is to have technology, content, and traffic in order to succeed, but now where does the financial aspect come in? How do you convert all of this into money? Of course, we will delve into all of these topics throughout the series, but one thing to remember is that your method of monetization will depend on the nature of your business.
For example, a brick-and-mortar business — like a law firm or hair salon — may use their website to draw in new clients. Bloggers can monetize their site with display ads or affiliate marketing. If you’re selling something on an ecommerce site, your products are your source of monetization (of course, you still have to worry about converting your site traffic into buying customers). The ways of monetizing an online business will vary based on what works best for the business and its market.
We will cover each of these, technology, content, traffic, and monetization, in depth during this series.
Now, What You Don’t Need
So, you’ve seen the three necessary components to a successful web venture. Now, let’s take a look at four things that starting an online business doesn’t require.
1. A Lot of Money
This may surprise you, but starting your own business online does not require much cash. You’ll need a few basics, but you can get it running for next to nothing.
You’ll of course, need a website. This includes a domain name (usually $10-15 a year) and web hosting (less than $5 a month with a company like Blue Host). If you want to use WordPress, as I do, the software is free. There are some optional add-ons to make things easier (which we will talk about later on), but they certainly aren’t required to start out. If you need an ecommerce site with an online shop, there are free and low-cost site building programs to help.
You can easily get the ball rolling for less than $100.
2. An Advanced Degree in Software Engineering
Sure, you’ll have a much easier time building and maintaining your site if you know HTML and CSS. But honestly, it’s not a requirement. You’ll pick things up as you go along, sometimes through mistakes. WordPress, for instance, has built-in user interfaces that make it incredibly simple, even for website newbies — most of what you would be doing is point-and-click. You don’t have to worry about coding or advanced programming. In fact, the site isn’t much more difficult than using Microsoft Word.
You also don’t need to know much about technology in general. You’ll learn quite a bit as you go along (sometimes by trial and error), and that should suffice.
3. You Don’t Need to Quit Your Day Job
This one is important, especially if you want to maintain your financial security during the (very necessary) growing period of your online business. I don’t know a single successful blogger who quit their job at the beginning of their site launch. Of course, you can choose to do so if you’d like, but ensure that you have a backup plan in place first.
Getting any new company to a successful level takes time, and online businesses are no exception. Most web entrepreneurs choose to establish their online venture on the side first, allowing it to grow to a comfortable level of income. They run their business in their spare time: getting up early in the morning to work before going to their day job, writing on the train, staying up late to research (all of which I did, by the way). Once they have monetized their site to a sustainable level, they choose to quit, or cut back, at their 9 to 5.
4. You Don’t Need a Lot of People
Most online small business owners, and bloggers in particular, start out on their own. I certainly did, and managed it by myself for many years.
Today, I have a number of writers and an editor, but I could, in all honesty, do it by myself if I still wanted. I enjoy the convenience of having others help out, as well as the different perspectives they bring to the site. But starting out? You certainly don’t need anyone else.
What Does Running an Online Business Require?
I’ve told you what you need to start your online business and also what you don’t need. But once you get everything started, what is required to keep it running?
1. Hard Work
I already touched on this. For the first two years of the blog, I got up and worked from 5-7am seven days a week. I worked on the Metro heading to the office, on my lunch break, and on the Metro back home. I worked late at night and on weekends. Starting out requires a lot of legwork, and you can’t be afraid to invest the effort.
2. Problem Solving
Problems will arise. Technology will fail you, customers will wreak havoc, vendors will drop the ball… there will be no shortage of issues. You’ll need to be able to take them in stride, and figure out how to solve them quickly.
I’ll tell you right now, this won’t always be fun. There will be lulls – lulls in money (I made probably $100 during the first 6 months of this site), lulls in customers, lulls in traffic. If you keep putting in the work, though, the snowball will start rolling and you’ll see the fruits of your labor. For most people, you should plan for a good, solid year’s worth of effort before you really see progress. That can be mentally trying, so be prepared.
We mentioned this already for starting your site, but for a business like a blog, content is a recurring concern. You’ll need to continuously produce good, compelling content, whether that be in the form of podcasts, videos, or written posts. If your content starts lacking, your traffic (and cash flow) will follow suit.
You may be the world’s biggest introvert (in which case, working from home may be a dream come true), but you’ll still need to learn how to network. This could be as simple as connecting with fellow colleagues in your industry.
Do you sell pottery? Join a Facebook group for other artisans and offer suggestions to one another, or attend Meetups in your area. If you’re a financial blogger, make friends with other financial bloggers online and go to conferences like FINCON (if you’ll be there later this month, send me an email to [email protected] – I’d love to catch up with you!) to build relationships.
6. Learn New Things
I’ve been doing this for 9 years, so I should have it all figured out by now, right? Well, as soon as I get comfortable, something new comes along and I realize that there’s a ton I don’t know. You have to keep an open mind and be constantly willing to learn new things.
So, Join Us…
Over the next 9 weeks, I want to give you a complete view of what starting, and running, your own online business is really like. Not the “you’ll be blogging on the beach in 3 months!” baloney that you’ll find floating around, because that isn’t the truth.
We will cover all of the components I mentioned today, and next week we are starting with Technology. For Part 2, I have some homework for you: What do you want your online business to be about?
If you’re starting a blog, what will you write about? If it’s an ecommerce site, what are you going to sell? If you’re building an online tool, what will it be?
We’ll pick up there next week. See you on Sunday!