If you are new to starting a business today, you will surely consider starting an online business as an option. But really, what is starting an online business about?
Starting an online business is about creating an income stream, many have several income streams to mitigate the risks of depending on one income stream. If you have a job, you may also want to consider investing in creating extra income stream for yourself.
Recently, the news on the future for job growth are not very encouraging. The following are several key issues about the job market.
- Many of today's jobs will be replaced by robots and artificial intelligence
- 30% or more traditional retail businesses will be closed down in the next 3 years
- New business in the 21st century will not create the same number of jobs as similar businesses in the 20th century
The message on jobs in the future is very clear. Job security will not exist and it makes perfect sense to explore how to build additional sources of income.
If you have a job, great, keep your job but you may want to invest building an additional income online. Many build online income as an extra income source, some complement their full-time jobs and there are entrepreneurs who build online businesses.
Earning An Income
The main purpose of any business is to earn an income. So, this is very straight forward and if you are not interested in earning an income, then you may want to review why you want to start an online business in the first place.
However, if you are asking, Why start an online business?
More than 5 Billion Clicks
Yes, more than 5 billion reasons to start an online business today. IAB reported in 2017, users clicked more than 5 billion times and the affiliate marketing networks carried out more than 170 million transactions worldwide.
Mediakix reported that 81% of brands including Amazon, eBay, Walmart, Wayfair, Nike, and pretty much every major brand you can imagine has an affiliate program.
Affiliate marketing is popular among brands and publishers alike because it involves very small investment, performance-based form of marketing, meaning that advertisers pay only what they get for, while better performing publishers received incentive in increased income.
Choice Of Product
The 2 types of products you can sell in any online business are digital or physical products.
– Digital Products
Digital products are products that you can deliver digitally as a download or digital service. These products include the following:
- Audio & Music
- Digital Art
- Documents
- e-Books
- e-Learning
- Graphics, Images & Photography
- Software (downloads)
- Software (web-based)
- Video
– Physical Products
These are traditional products which can be anything you are buying today. Amazon.com and Alibaba are two largest online business to consumer and business to business marketplace selling physical products in the world. If you can ship it, they will sell it online. Some products are:
- Automotive Supplies
- Arts and Crafts
- Books
- Baby and Children
- Beauty and Personal Care
- Electronics
- Fitness
- Health and Nutrition
- Home and Kitchen
- Industrial and Scientific
- Men's Fashion
- Pet Supplies
- Tools and Home Improvement
- Sports and Outdoors
- Women's Fashion
If you add both the list above, it is very clear the digital economy will take over most of the commerce moving into the future.
Sure, you will still have physical stores but they will be selling less and the retail experience will need to be unique since the impact is the product is fulfilled immediately for digital products and shipped to the doorsteps of the buyer for physical products.
Anyone Can Start
The internet levels the playing field as they say for many years now. It allows anyone to start a business online. Of course, you need a computer and internet access. You don't even need a product to earn an income online.
There is an entire industry called affiliate marketing where you can promote someone's else product and get paid for it. In case, you are wondering, Amazon is the largest affiliate program in the world.
There is no technical experience is needed. Today there are plenty of tools you can use to build an online business that makes the technical work a lot easier than it was in the past.
There is also great affordable platforms with the infrastructure and education to guide you as you create your own business online.
When compared to a brick-and-mortar business, you don’t need a lot of startup capital. In fact, you can get many internet businesses up and running with no money at all because so many free services facilitate the possibility. For example, you can set up a website or blog for free using WordPress. You can join an affiliate network or Amazon Affiliates for free without any inventory.
Limitless Freedom
Many entrepreneurs today are drawn to online businesses because of the freedom they offer. Modern technology, laptops, tablets, business apps and VOIP communication systems are just some of the tools that allow businesses to be operated from any location.
Next time you are in a Starbucks take a look around — I guarantee someone is working on their online business while connected to WiFi and sipping their favorite coffee.
You are empowered to be able to live anywhere in the world, set your own schedule, and work as little or as much as you want, depending on how fast or big you want your business to grow. No one cares how you dress. It’s a truly democratic platform for entrepreneurship.
Some entrepreneurs struggle with balancing the freedom and fail miserably, while others use the freedom as motivation to work even harder. One should not mistake freedom for time to slack off. True entrepreneurs respect the freedom and understand that the hard work is well worth the ability to spend more time with their families and partake in activities that most miss out on because they are part of the nine to five grind.
24 x 7
Most businesses have operation hours.
Your business website is available to you and your customers 24 x 7, 365 days a year. If anyone wants to purchase something from you at 1 am, they can click on your site and do this immediately. This keeps everyone happy and you are providing this convenience for anyone to access your products any time.
Your open for business 24 x 7. It gives you time leverage in that you do not need to be present in the business for it to run 24 hours a day.
It is literally Making Money While You Sleep.
Global
There are 4.388 BILLION people online as of January 2019 according to Digital 2019 reports by Hootsuite and We Are Social.The world’s population is currently around 7.676 BILLION according to the same report. That means 57% percent of the world’s population are on the Internet.
When you set-up a business website, your potential reach is currently around 4.388 BILLION people.
Wherever you live in the world, your access to a local market has limitations. Let’s take a look at my favorite city, Los Angeles. The current population is about 4 million. So, whatever business you start locally in Los Angeles would only give you access to less than 4 million, after taking into consideration the target market segment for your product.
You can reach more people from your computer or your phone regardless of where you live. You are not restricted to a Local Market.
Sure, you can raise the point that not everyone in the world speaks the same language. If you are reading this blog, you would be reaching to most of the English-speaking world. That is a significant portion of the internet population. The good news is you don't need to reach everyone, just enough for your business to generate the income you are looking for.
Another good news is while you build your business, the future of artificial intelligence in translation software, you can probably break down language barriers too and use that to sell your products to a larger market.
Scalable
The shocking reality of scaling an online business is not the numbers. The numbers will always work out.
Let's take a look at an example. Let's say you are a great chef and decided that many people would like to be able to cook for a party and you created a micro-learning step-by step course to cook an impressive menu for a party.
You set up a blog and start writing about your cooking philosophy, your ideas and simplify the cooking steps, and slowly, people start signing up for your email list. It doesn’t happen overnight, but as the months roll by and you keep writing, the subscribers trickle in. After six months, you have your first thousand subscribers.
You completed the course and price it at two hundred dollars with your personal touch, one on one coaching, then promote it to your list.
The reality in sales (not just online sales) is that only a percentage of people will end up being buyers. That is normal and the reality. Don't beat yourself up for this. You don’t need everyone to buy; you only want people who are engaged and interested.
Let's assume you have a 5 percent conversion rate for the one thousand on your list, which is not unrealistic for a small, engaged list:
- 5 percent of 1,000 = 50 sales
- 50 sales at $200 = $10,000
The truth is you do not need a lot of customers. You need to focus on solving their problem and meeting their needs.
I don't know about you but ten thousand dollars from a small email list, is a lot of money to me.
The process to scale the business is basically traffic and conversion. Grow the traffic, which is the 1,000 and maintain or grow the conversion rate, which is the 5 percent, your business will grow. Once you get your model right for your product, the scalability is not difficult to achieve.
Info-Commerce
Almost all online businesses use information to sell products. In the traditional markets, companies engage marketing companies and agencies to create content to sell their products. You may recognize these as product collateral and advertising to sell products.
However, the growth of the internet and social media created new forms of information that are shared with the masses. Blogs and social media communties are created by individuals based on their interest. This created a following and fans in which the individuals have influence on. An entire industry was created to leverage these individuals to promote products for sale online, it is called affiliate marketing.
Traditional media's influence is waning due to the growth of individual influencers. These influencers have their respective network of followers. Seth Godin call it, the tribes we lead in a TED presentation. Individuals are
- producing and promoting their own music and songs
- writing and publishing their own books
- producing their own audio programs
- producing their own live video channels
- creating their own niche marketing
You can be part of this trend, building a following and take the opportunity to start your online business. You can begin by selling someone else's product using affiliate marketing and over time create your own product for the market you are serving.
This opportunity I call Info-Commerce will be the way small businesses grow in the digital world. Even through some may refer to this as content marketing, I believe it is bigger than that. It is about you and I building income sites based on information and commerce.
Conclusion
You can get started by learning more about Online Entrepreneurship. Follow the following related blogs for more helpful information.
RELATED: Getting Started – How To Build An Online Business For Yourself?
RELATED: 2019 Wealthy Affiliate Review – Platform For Online Entrepreneurs .
Interesting read. I am too a member of Wealthy Affiliate and find it fascinating that we can reach such a huge audience. As you say, you don’t need everyone to purchase, this will happen naturally, you just need to be able to engage and provide quality content.
You are right, Iain. Quality content and engagement with your audience is key.
Deciding to become apart of the online world in starting a business is so exciting, the rewards are there but one must work hard to achieve those rewards or get the results they are looking for. I believe that this type of business is great business. Thanks so much for sharing.
Yes, Norman. Starting any business requires work. Online businesses does have it’s advantages when compared to brick-n-mortar alternatives. You also need an online platform and education to developed the skills to run your business.
I am really happy to say it’s an interesting post to read. Its really useful for me 🙂
Glad that you enjoyed the post.