Starting an online business can be attractive to budding entrepreneurs, especially because it means lower start-up costs and a wider reach compared to a traditional retail operation. Needing extra income during this time of higher housing, food, and transportation costs could be additional motivation to finally jump into business.
Not only is it possible to be successful in building an online business, it can be done with little start-up capital, said Steve Strauss, founder of PlanetSmallBusiness.com. Strauss sold one of his businesses, TheSelfEmployed.com, a site that helps people become entrepreneurs, to billionaire Mark Cuban and Zen Business in 2021.
“It’s going to take some effort and you’re going to have to make some mistakes, but people go into business every day,” Strauss told Kiplinger. “What do you find online? Find website after website of companies. All those people understood. You can figure it out.”
Subscribe to Kiplinger’s Personal Finance
Be a smarter, better informed investor.
Save up to 74%
Subscribe to Kiplinger’s free e-newsletters
Take advantage and thrive with the best expert advice on investments, taxes, retirement, personal finance and more, straight to your email.
Take advantage and thrive with the best expert advice, straight to your email.
He likes to tell the story of how Jeff Bezos founded Amazon in 1994. Bezos was a hedge fund employee who was tasked by his boss with researching potential Internet business opportunities. He discovered that the web was growing by 2,300% a year and decided to launch into online sales.
“He started an online business by himself, with his wife, in his garage,” Strauss said. The rest, as they say, is history.
Compared to the early days of Amazon, today’s advanced digital tools make it easy to build an online business, with options for free or low-cost websites, ads, and content creation. Now with ChatGPT i Stable diffusionyou can have an assistant AI writer and artist at your fingertips, for free.
One key tip to remember: Start your online business on the side. Don’t quit your job until the business is viable, Strauss said, to minimize risk.
how to start
There are two general types of online businesses: those that sell products and those that sell services. A produce business is generally more expensive because you need to maintain inventory and take care of packaging and shipping. A service business is better because the initial capital outlay can be as little as a couple of hundred dollars, Strauss said.
However, if you prefer to sell products, there is a way to do it without overheads: dropshipping. This is when you partner with a manufacturer to sell their products on a website or online store that you create, using your brand. The manufacturer is responsible for packaging and shipping. The profit is split at least 50/50, although sometimes the manufacturer gets more, Strauss said.
But be aware that the manufacturer may charge various fees, and if the supplier is overseas, the shipping time may take weeks. It is also good to order some of the products yourself to check the quality beforehand. Dropshipping supplier sites to check out are Spocket and Shopify open it.
You have a good business idea
Identify opportunities around you or problems you can solve. For example, Eric Bandholz started writing a hobby blog about beards in 2012 to show that beards can be cool; they’re not just for lumberjacks or hippies. He soon realized that the men’s facial hair market was underserved. He launched a BeardBrand store on Shopify in 2013, selling beard care products such as a specialty oil. Today, BeardBrand makes millions of dollars a year sales.
Have you identified a niche you can serve? Maybe you’re good at cooking and you noticed that no one specializes in birthday cakes that cater to different ethnic groups, showcasing the colors and designs of their cultures. Follow your passion, but also make sure there is a market for it.
In addition to e-commerce, Strauss said other business ideas could include becoming a social media manager for people in small businesses who are too busy to manage it or don’t know how; work as a virtual administrative assistant; doing coaching or consulting tasks; creating an online course with the likes of Thinkific or Udemy; and other efforts.
Marketing and assembly on a shoestring budget
The good news is that there are many ways to market cheaply. Social media and Craigslist are two ways. You can choose pay-per-click ads so that you only pay when people click on your ad. Strauss also suggests partnering with a company that your website or product resonates with and can help promote you. Collect emails from people offering them free content or other freebies and market to them.
An easy way to set up and market your business is to open a store on Amazon, Shopify, Etsy, eBay, and the like. They have templates to help you build your website and a number of tools to help you succeed. While you will have to share your revenue with them, you will also have access to their traffic.
If you want to set up a standalone website, you can do it cheaply by using services like Wix, go father and similar Use templates for website design or hire designers Upwork, Fiverr or 99designs. Learn about search engine optimization with free online courses or on YouTube.
Need advice? Score.org (Service Corps of Retired Executives) offers free expert help on topics from business planning to e-commerce and beyond.
Strauss also recommends setting up your own business legally and economically as an S Corp. or LLC by going to Nolo.com or LegalZoom. get one A (Employer Identification Number) from the IRS, like a Social Security number for businesses. Also set up a separate bank account under your business name. Be sure to separate your work and personal lives to ensure that any business responsibilities don’t affect you personally, Strauss said.
Do it
After setting up your online business, give it at least six months to determine if the business is viable, Strauss recommends. If it doesn’t seem to be going well, consider switching to another online business. This shouldn’t be too difficult since your business is digital; after all, there is no need to close physical stores, sell material or the like.
Finally, “go for it. Take a chance on yourself. Be brave. You can do it,” Strauss said. “But the caveat is to be smart and cautious about it. Reduce your risk because if it doesn’t work, that’s okay. Don’t quit your job to do this. When it gets bigger than you thought, it can be your biggest rush.
