How to start an online business from home – The ultimate guide
12 Steps to Starting an Online Business from Home
Are you ready to become an entrepreneur and gain time, location and financial freedom you desire by starting your own online business? If so, you are in the right place.
At Dreamed Lifestyle, we understand the dedication, hard work, and diligence it takes to create, manage, and scale a successful online business.ss.
It won’t be easy. It has costs. It will take know-how and strategy. It will take dedicated design from day one. But do it right, and your business will bypass those miracle brands to become something much more than a dream, your successful online business.
Entrepreneurship can be challenging. But it’s also one of the single biggest steps you can take toward financial and career freedom, and building something new and exciting that you can be proud of.
To help you get started, we’ve written an in-depth guide to tell you everything you need to know about successfully starting an online business. We teach you how to find your perfect niche and develop a business idea.
We also show the necessary steps to take when setting up your venture, whether you’re selling a product, service, or know-how. With this guide, you’ll be able to launch your online business and find the flexibility and freedom you desire.
If you don’t build your own dream, someone will hire you to build theirs. ~ Tony A Gaskins Jnr
12 Steps to Starting an Online Business from Home:
Step 1. Find the right online business for you
A lot of people think that they need an incredibly innovative idea to start a business. You know, a business idea like “the new” Amazon or Facebook. That’s not true. You can create a business with a far less disruptive business idea. You can literally take the skills you have today and start a business around them. Dive deeper into your passions, interests and hobbies and find something you’re good at or that you love to do and build your business around it. Let’s investigate further.
1. Identify your skills and interests?
The best place to start is by looking at your own skills, expertise, and knowledge.
Ask yourself these questions:
- What skills had you learned in your 9-5 job?
- What did people frequently ask you about?
- What do you absolutely love doing?
- What are your hobbies, your interests?
- What do you lose track of time doing?
- What needs can you meet?
You may want to use the 6-step approach from The University of Chicago that will walk you through the process of identifying your skills, interest and values.
2. Talk with your friends and family about your preferences
Sometimes you just aren’t the best judge of what makes you happy. Ask people who know you intimately when you seem happiest and what you do most enthusiastically. Their answers may surprise you.
- What do your loved ones compliment you about the most?
- Growing up, were you often told you were particularly good at something?
Reach out to your friends and family and ask them where they think your talents and skill set lie.
3. Build your skills list
- After you’ve done these exercises, think about what you’ve learned. Please focus on the things that you both enjoy and do well and write them down.
- Then, narrow the list to the top two or three things. This is your SKILLS LIST.
- Keep this skills list handy, review it often, and use it as your jumping-off point when you’re plotting your career move.
If you really want the key to success, start by doing the opposite of what everyone else is doing. – Brad Szollose
1. Find a need and fill it
Once you’ve brainstormed ideas for what type of business you can start, the next step is to work out what your business should sell online. Which problem are you bringing a solution for? Most people who are just starting out make the mistake of looking for a product first, and a market second. To boost your chances of success, start with a market. The trick is to find a group of people who are searching for a solution to a problem, but not finding many results. The internet makes this kind of market research easy.
Visit online forums to see what questions people ask and what problems they’re trying to solve. Do keyword research to find keywords that a lot of people are searching, but don’t have a ton of competition with other sites.
Check out your potential competitors by visiting their sites and taking note of what they’re doing to fill the demand. Then you can use what you’ve learned and create a product for a market that already exists — and do it better than the competition. Restrict tour search to the areas that match your interests as listed in Step 1.
2. Analyze your product/service
Your product or service must fulfil the following criteria:
Great market viability
A market that is “viable” will continue being profitable for a long time, therefore helping your business to remain successful. Will there be a need for your product or service in many years to come?
You may want to refer to Step 4 for Market research.
Active target audience
Are there people currently searching for what your product or service offers? Does your product or service target a niche yet large enough audience to generate plenty of sales?
Step 6 of this guide will talk about knowing your audience.
What does your product or service have that will allow you to outperform your competitors? What will you do better than them, and how?
Compliance with legal requirements
Make sure to have the licenses, permits, or certification required to run your business and sell your product or service.
3. Find a mentor
Regardless of the field, the startup process is taking place in, having a mentor is a good way to improve your competencies and strive for business excellence. In general, a business mentorship is close to sports coaching.
The skills that turn any specialist into a coach are attention to detail and the ability to explain complex things with simple examples.
A business mentor should also be communicative and open-minded, but it is more important for them to speak the same language as you.
In terms of startup mentorship, a mentor’s tasks are the following:
- To supervise startup planning and ongoing management.
- To provide advice for startup funding, team hiring, communication, and general work organization.
- To help with business connections.
- To fill your tech startup knowledge and skillset gaps.
It’s essential to understand that a business mentor is neither a partner nor a teacher. Some business leaders in the tech startup field consider that mentors shouldn’t be top professionals from the area you are working in (however, that is an advantage), but have a definite propensity to observe and manage quality.
Don’t take a mentor’s advice as a direct order. A mentor mission is to provide you with an alternative perspective at your work and fill gaps in your skillset.
Who could be your startup mentor? In fact, anyone. Sometimes, you have mentors, even without knowing about it. Friends, relatives, neighbours, and even bartenders usually play a mentor’s role in our life: they observe our activities, listen to our daily stories, and give us a piece of advice.
The question is, who is the best tech startup mentor and how to identify them?
Here you’ll find some tips on how to identify your mentor:
- A mentor shouldn’t be your clone! Look for somebody with another background, set of skills and knowledge.
- Pay attention to the mentor’s networking quality. If the person maintains a connection with professionals, influential people, or leaders of your area, he or she will bring you extra benefits in the future.
- You should understand each other. No toxic or unconstructive mentorship! At the same time, support diversity as it is a source of useful observations for you.
- Establish a relationship framework. Decide if your mentor will receive a salary or get the percentage of profit; include those points in your business planning for startups documents.
Find somebody who can conduct mentorship sessions regularly.
We know that choosing the best mentor is not an easy process because it’s about choosing an expert in an area you don’t know yet, which makes it challenging for you to evaluate the criteria of the best mentor.
That’s why I advise you to work with the same mentor that taught to create my successful online business. That is The Six Figure Mentors. They are experts in teaching people to start and run their online business for more than a decade. Learn more about them here.
1. Why a niche?
A niche is a very focused business area of a broader market. A business that only sells tiles for bathrooms, for example, is a specialized niche within the broader construction materials market. One of the most important steps in building your online business is choosing a profitable and sustainable niche. As online entrepreneurs, we have the amazing opportunity to build and work on what we love while also making money.
When it comes to your niche, passion is an important component, especially when the going gets tough and the cash doesn’t seem as motivating. Here comes into play the skills list that you established in Step 1. Essentially, your chosen niche will determine the industry you’ll operate in, and the types of products or services you’ll sell. It’s your speciality, and it’s what your business will be known for.
For example, in collaboration with The Six Figure Mentors, Dreamed Lifestyle operates in the online business development niche. We specialize in connecting with and helping founders and entrepreneurs. Our audience has come to rely on us for tools, tips, and tricks to create and/or grow their online business.
Choosing a niche is crucial in today’s online marketplace for many reasons:
- First, competition is fierce, but less in a smaller, more specialized market, giving you a better opportunity to stand out.
- Second, loyalty and familiarity are precious in online business. If your customers can recognize you and know what to expect with your offerings, they’re more likely to be repeat buyers.
- Finally, the ability to offer niche market expertise, as well as a specialized skill set and knowledge base
- The potential to price your products or services higher as you have less competition, yet healthy demand
- Differentiation from competitors serving a more general market
2. To find your profitable niche
- Start with your skills list from Step 1. Remember your skills list contains areas where you are knowledgeable and passionate about.
- Find typical problems in your skill list areas for which your target customers are looking for a solution. Then understand if you can actually solve them or not.
- Identify subtopics within this area and research each one.
- Analyze the target audiences within these areas and think about their needs and wants to identify potential gaps in the marketplace
- Research if this sector is evergreen, or has consistent interest over time.
3. Evaluating your niche ideas
Next, take each of your chosen niche products or services through the criteria below. Evaluate these benchmarks thoroughly, as these are some strong measures of potential business success.
The goal here is to pick a product or service or two that is/are brimming with potential for both the passion and the market.
It’s now time to validate your product/service using tactics such as keyword research and evaluating trending products. This is an essential step in starting your online business. It helps you to determine if there’s a healthy demand for what you plan to sell.
When we talk about demand, we refer to:
- The need for your product/service/know-how
- Who wants to purchase what you’re selling?
- How many customers are willing to spend?
To understand these things, you will want to understand where your customers spend time online.
- Do they use forums?
- Do they spend time on Facebook, YouTube, Instagram, Twitter, etc.?
- Or do they prefer to read blog articles?
Knowing this will help you get the best information to understand your customers. To begin conducting your online market research, you will want to follow the steps below:
1. Conduct keyword research
This helps to look for a super easy, fast and free way to get a feel for your product or business demand.
a. Make a list of keywords
Once you’ve determined what you have to offer and what will make your company stand out (as in Step 2 above), it’s time to consider your audience. With your offer in mind, try to get into the heads of your potential buyers. What will these people be looking for? What kind of search terms could they be using while looking for your service or product on the internet? Ask yourself these questions and write down as many answers as possible.
If your offer is clear (see Step 2 above), you’ll have a pretty clear image of your niche and your unique selling points (the things that set your business apart from others). These are the terms you want to be found for. Luckily, some tools can help you with this step:
b. Google search
Search keywords related to each niche, both broad phrases and specific words. For example, if I were passionate and knowledgeable about “newborn nappies”, my main search terms would be “newborn nappies pampers”, “newborn nappies bulk”, “newborn nappies reusable”, “newborn nappies Aldi” and so on, depending on how specific I want to get.
The goal here is to discover the existing content and perceived demand in each niche.
- What kinds of websites, blogs, and other online businesses are dedicated to the niche?
- What are they selling, promoting, and talking about?
- Who are the leading influencers and retailers?
- What results come up on YouTube, Pinterest, and other social media sites?
Use your best judgement here to decipher demand and existing knowledge in each niche space. There isn’t a magic number of results to aim for here, but it’ll be pretty clear if there’s no search activity around your proposed niche or you’re dealing with a very competitive market.
Also, don’t shy away from the possible competition. Competition is a healthy sign of demand and online viability. Essentially, these folks have already done the hard work and paved the way for a ready-to-buy market. All you have to do is differentiate yourself or improve upon what’s already out there.
If you don’t see much competition, on the other hand, be cautious. While it could be an untapped market, the odds are that niche doesn’t perform well online.
c. Google Ads Keyword Planner
You can use the Google Ads Keyword Planner to find new and related keyphrases. Here are some of my favourite benefits of using the tool:
- Discovering keywords that have the highest search volume with the lowest competition.
- Browsing additional recommended or related keywords, so you can find a whole new group of terms you can also target.
These are the keywords you can use in your:
- Site copy,
- Product page copy,
- Meta titles,
- Meta descriptions,
- Social media copy,
- And more.
2. Find trends around your online business niche
Google Trends allows you to compare the traffic for sets of keywords. You can even see the difference between numerous geographical regions. It’s essential to check Google Trends if you expect that some of your keywords are seasonal, for instance, due to regulations or holiday seasons.
Google Trends’s bonus is the ability to complete a search for a product or business idea and then view the directional search demand for that keyword throughout the past few years. You can also compare the volume of searches between a few terms, geographic locations, and even how particular events affect search popularity.
This tool is beneficial when considering a product that is tied to a newer niche. You will analyze if your product niche is a fad or the start of a rising trend.
4. Research your competition
a. Get a general idea of your competition.
You can’t devise a proper keyword research strategy without taking your competition into account. It’s quite easy to get a general idea of your competition. Just google some search terms you would like to be found for. Then see which companies appear and where you rank. How big are the companies you are competing with for top three rankings? Would your company fit between these results? This is all quite easy to determine using just Google search results.
b. Find areas where you can beat the competition.
Once you have a general idea of your competition, it’s time to take things a step further. Start with the keyphrases you think you have a reasonable chance of ranking for. Visit the pages that are currently ranking.
- What exactly are they doing?
- What information are they offering?
- Are their texts well-written?
- What can you offer that they don’t?
By setting up a thorough comparative analysis, you can try to match the things those sites do well and outperform them in areas you’re better at. And if you do that well, you’ll be able to be the best result!
Have you finished with the evaluation of your online store idea and have explored the market viability? It’s highly recommended that you research any restrictions and regulations that may affect you when opening an online business.
The licenses, permits, or certificates you require to stay legally compliant vary based on your industry and state/country. Therefore, always check with local authorities to know exactly what is legally required of you before starting your business.
1. Why a target audience?
Before you even pick up a pencil to start building your marketing plan, ask yourself: Do I know the audience I’m marketing to? What type of content resonates with my target audience? On what social media platforms are my target consumers most active?
What keywords are most relevant to my business and potential customers?
The answer to these questions will determine whether or not your resources for marketing your online business will be well-spent or wasted. Defining your target audience will determine almost all of the business, product, and marketing decisions you make. The messaging you use, the sales channels you pursue, the information you share, the product upgrades you offer, and more, all will be contingent upon the group of people to whom you’re trying to appeal.
2. What is your target audience?
Your target audience is a group of individuals sharing similar characteristics or needs that your online business aims to serve. Therefore, they are most likely to purchase your products or services. Although your products might appeal to many people, it doesn’t make sense to market to everyone. If you market to everyone, you’ll end up by marketing to no one.
What your brand needs is: a well-defined target market. So you know who to go after with your marketing campaigns. By adding a target market into your strategy, you’ll be able to more effectively market to customers while pinpointing their exact needs and reducing ancillary spend.
3. How to define your target audience?
The easiest way to define your target audience is to craft a customer profile and segment your audience based on demographics and psychographics.
- Start with demographic criteria (e.g. income, age, gender, location, education level, career/occupation, marital or family status, religious and political preferences, ethnic background)
- Define known psychographics (e.g. interests, hobbies, passions, pastimes, dislikes, annoyances, and problems).
- If you have a current customer base, learn more about them through simple surveyor interviews. If you don’t have customers yet, check out your competition to learn more about their target audience. Visit their websites, social media accounts, or storefronts (if applicable).
Every industry, business and product are different. So think of these lists as more of a starting point to evaluate market segment size and opportunity. Don’t be afraid to make adjustments and include criteria that will add interesting layers to your profiles. The better you know your customer, the better you can serve them.
By defining a detailed customer profile, you’ll be able to make educated decisions when it comes to building custom audiences and crafting compelling advertising and marketing campaigns.
Now you’ve successfully found a niche product or service to sell that matches with your passion, interest or skills. You now know that your offer has great market viability, competitive advantage, active target audience, and fits within legal requirements.
It’s now time to choose your business model. Depending on your product or service, you may think of
Let’s look at each of them and their pros and cons:
E-commerce is a business model where the owner sells either their own product or service, much like a physical retail store. This can be a product or service you’ve created yourself or a reselling opportunity. You are responsible for the whole process from the product or service sourcing, the marketing till the order fulfilment and the after-sale service. The prices of your product are totally in your hands. You collect the payments and pay the charges.
- E-Commerce facilitates the sale and purchase of goods and services irrespective of the seller’s geographical location or the customer.
- It ensures faster delivery of goods and services with minimal effort from the customer. Customer grievances are also sorted out faster.
- The application is functional 24/7 and allows for an unperturbed shopping experience.
- The cost involved in setting up and maintaining an E-Commerce business is high.
- Security of customer information is another major concern which needs to be addressed in the ECommerce application.
- Operational challenges like product sourcing, shipping, wrong deliveries, late deliveries etc. have to be taken care of to attain complete customer satisfaction.
Read Step 8. Product sourcing and Order fulfilment, for Products Sourcing and Shipping aspects,
Dropshipping is an online business model where a vendor lets you list their products on your online store.
- When someone places an order on your dropshipping store, you place that same order directly with your dropshipping supplier. There are many apps out there that help you with automating this part of the order fulfilment.
- Then your dropshipping supplier will handle the rest. Think about preparing the packaging and sending the order straight to your customer.
- Now your customer will receive the package straight from your dropshipping supplier.
- You essentially won’t need to deal with inventory, producing, packaging, or fulfilment. The vendor charges you for the products as they are sold, and typically ships orders on your behalf.
- Not much startup costs in comparison to retail stores. You don’t need to own the inventory! This also saves you in other things like warehouse fees.
- Highly scalable. You can literally sell to the whole world if you want to because your dropshipping supplier is in charge of shipping without you needing to worry at all.
Not only is it an effective option for starting a new online business or expanding the product catalogue of an existing store, but it also works in the vendor’s favour too, as you are helping them expand the product catalogue of their existing store.
- You’ll face more competition, as many of the products offered by dropshippers are readily available all over the internet.
- Due to the high competition, dropshipping usually gives you a lower profit margin, so you’ll need to sell a lot before making a good profit.
- With a dropshipped online store, the customer is effectively purchasing from “your store” even though you are not the one fulfilling the product. As a result, you are responsible if the customer does not get their shipment on time. You are also responsible if the product is the wrong one or defective.
- Therefore, you will have to devote a certain amount of time dealing with customer issues, especially if your dropship vendors are not reliable.
- Besides, you have to set up a complete storefront with a dropshipped store that accepts credit cards and other payment forms.
The steps to find a dropshipping supplier are nearly the same as those you’d follow for finding a manufacturer or wholesaler partner in case of an e-commerce shop.
- Research dropshipping companies online. There are numerous possibilities out there.
- Check their references and reviews.
- Ask for samples. With samples of their products, you can assess quality, size, features, and design in-person before committing to the business relationship.
- List the pros and cons of each dropshipping company. Which one has the best references and reviews, as well as the best prices and product offering for your business? Please start with the one that seems to be the best and get started selling their products through your own online business.
Affiliate marketing is a business model when you promote other companies’ products or services.
Here’s an example of how it works. A blogger writes an article about “Eating healthy”. At the bottom, they say “if you want to learn how to cook healthy and tasty food, click here”. This link, called affiliate link, will take the visitor to the webpage of a cooking lessons program. If the visitor registers for the course, the blogger gets a commission. Those commissions can be very high. Sometimes up to thousands of dollars depending on what the item sold to the visitor.
You don’t deal with inventory, packaging, or fulfilment. Your sole responsibility is marketing. The vendor is responsible for the entirety of the commercial transaction.
Affiliate marketing business owners use various online marketing methods, such as search engine optimization, e-mail marketing, pay-per-click, and content marketing. They may also attract consumers by publishing products and services reviews. Whenever a visitor clicks on the links, they are redirected to the e-commerce site. If a purchase is made, the affiliate earns a commission.
- Minimal investment is required to start the business, as no products and inventory are purchased beforehand.
- A wide variety of products can be offered to potential customers as the products need not be physically available with the business’s hands.
The scalability of the Affiliate marketing business is easy, and the suppliers share the load.
- The entire sales process is completely hands-off. Once you refer a customer to a business and the customer makes a purchase, your job is done.
- Since you are selling other peoples products and services, you don’t have to worry about product or service fulfilment (customer service, payment processing, sales taxes, warehousing, storing or shipping product, or other time-consuming aspects of selling your own products).
- The profit margins in the Affiliate marketing business are minimal due to heavy competition in the market.
- As the business does not maintain its own inventory, it becomes difficult to manage and keep track of the supplier’s inventory.
- If the quality of the products provided by a supplier is low or the supplier does not respect delivery terms, the business needs to take responsibility for the same in the case of a customer complaint.
- One of the biggest disadvantages to affiliate marketing is that you lose a lot of freedom. Any affiliate partner can drop you at any time, change commission rates, go out of business, or begin deteriorating and there is nothing you can do about it.
- It’s also likely that you will have a very tough time acquiring repeat customers and multiple commissions from the same customer unless you specifically promote products and services that give you repeat commissions on customers you refer. When you refer someone to purchase something on another site, that site will also get the customer information such as email addresses, phone numbers, addresses, and other information they can use to retarget and make more sales in the future.
The blogging concept is to publish good content, get traffic, build an audience, sell info product and/or promote products or services as an affiliate. In some cases, monetize with display ads.
The content for a blog by a blogger can be informative, entertaining, funny, personal… sometimes all of the above.
Traffic usually takes a while to materialize, but if persistent and the content is good, a following will develop. Bloggers have an easier time developing a following, which is great for return traffic via email, RSS and/or social media.
As long as the content is excellent, traffic will grow and be consistent. This is the lifeblood of any website.
- Develop and strengthen relationships with existing and new customers
- Establish your business as an industry leader
- Connect people to your brand
- Create opportunities for sharing
- Learn how to make money online
- Build your professional network
- Exceptional boost to search engine optimisation
- Time: Blogging is time-consuming
- The techie stuff: build your website on a platform that allows blogging, like WordPress
- The curse of inconsistency: A dead/inconsistent blog is worse than no blog at all.
- Customers undervalue your expertise and look for freebies
A freelancer works independently, selling work or services usually with no intent to pursue a permanent or long-term arrangement with a single employer. A freelancer is someone who usually works at home, and the work comes to them. They use and own their own tools and are responsible for maintaining them.
- Choose the clients you want to work with
- Creative freedom
- Earn more per project
- Set your own hours
- Always chasing payments from clients.
- You wear all the hats (project manager, bookkeeper, etc.)
- You often work longer hours (60 to 80 hour work weeks)
- Difficult to locate and land new clients
Consulting is when a person who is paid to provide professional or expert advice in a particular field or speciality, such as advising a company on social media use or on increasing efficiency. Unlike a freelancer, a consultant may be an internal consultant or an external consultant.
Coaching is when one helps people come to the answer themselves. They are not the subject matter expert in the area, but he/she is an expert in coaching people to work together and ask thought-provoking questions.
- Freedom to choose your work and your clients
- More flexibility
- Variety of work
- Build a Wide Network
- Career growth
- Often too much travel
- Work/life balance
- Turnover linked to fast client change
Advertising is one of the oldest business models for monetising a low cost or free service. Think about all of the largest websites out there. They don’t sell anything to you as the user. They sell advertising space to companies and advertising firms that want their ads to be displayed in front of the people visiting those websites.
It’s one of the many reasons why the largest websites are always pumping out so much content daily. They need a constant stream of visitors to earn enough advertising revenue to pay for all those staff members and other correlated charges.
These kinds of content sites tend to have a range of digital marketing jobs available because traffic is important. If you’ve ever pitched an article to one of these sites, always remember, they need you more than you need them. Otherwise, they would quickly go out of business due to lack of content writers and hence lack of content.
A lot of smaller sites are also padding out their pockets by using this method.
If this is the route you want to go, there are more avenues at your disposal than just Google AdSense.
Remarketing and Retargeting
Have you ever been followed around the internet by a particular ad after you visited their website or viewed an ad while watching a video on Youtube? They identified and noted your interest in a particular ad, and they’ll follow days, weeks and even months with the same or similar ads trying to make you buy or at least signup with them. It’s nasty, but it converts like Gangbusters.
With traditional advertising, you show an advert to thousands of people whether they’re qualified or not. With online advertising, you only show ads to people who have expressed interest in what you’re offering in some way.
You have a lot of control over who advertises on your site and what content they put there.
You also know your visitors pretty well by gathering their personal info including but not limited to their demographics (like age, gender, education level, job, income), their interests and hobbies, etc.
That way, you can only show relevant offers to your audience and reduce the risk of them bouncing from your site in annoyance.
People are starting to ignore them or block them
We’re inundated with ads these days. So it’s easier to ignore them than anything else. In addition to that, most browsers come with ad-blocking software that can really cut into your bottom line.
People are starting to ignore them or block them
We’re inundated with ads these days. So it’s easier to ignore them than anything else. In addition to that, most browsers come with ad-blocking software that can really cut into your bottom line.
Some ads are optimised for Google Chrome, some for Mozilla, and some for Internet Explorer.
This can lead to problems in viewing and lead to an overall poor user experience. That’s not even taking into consideration the mobile aspect of display advertising.
Depending on who you’re showing ads to, the CPM (a way to bid where the advertiser pays per one thousand views) can be meagre, which means you need a huge amount of web traffic to get a decent profit.
How to decide which internet business models are best for you
I’ve written this article to answer this question.
- 7 Types Of Online Business Models You Can Start
- 6 steps for choosing the right online business model
1. Product Sourcing
Product sourcing is the process of finding products that you can sell through your business. There are numerous methods you can use to source products. Most online business owners use a combination of the following most popular methods: working with a wholesaler, a manufacturer or creating handmade products. (Dropshipping business model uses a different method of product sourcing. Learn more about it in the previous section.)
Your product sourcing system will depend on whether (a) you are selling the products you make yourself or (b) the products you acquire from a manufacturer or a wholesaler.
Your first step is to source the materials you’ll need to make your products. You may already have a source, or you may need to visit craft stores or sites, flea markets, estate sales, or other retail stores. Identify all the materials you need, where you’ll get them, and how much they’ll cost. That will help you determine to price for your products.
If you’re thinking about creating your own products, there are some factors to consider.
First, you will have full control over your brand and will likely be coming into space with something new when introducing a handmade product.
Second, startup costs are typically low, although you’re going to need to put time and energy into your business, which is a sacrifice in and of itself.
Third, you’ll want to make sure you’re always thinking ahead about how you will scale and possibly grow your product line over time. This will help you stay competitive and offer your customer base something new.
Working with a manufacturer or wholesaler allows you to hire a partner to develop the product on your behalf. This option may be useful if you:
- Can’t make the product yourself, due to a lack of skills, tools, or necessary equipment
- Are ready to scale your DIY product by hiring someone else to make it for you
- Have to supplement higher than planned sales and need additional products to be produced quickly.
Working with a manufacturer or wholesaler offers benefits for your online business, including:
- The option to pursue a unique or complex product idea without having to make it yourself
- The ability to source products which have already proven to be popular
- Still having full control over your brand and the quality of your product.
- Assistance with production from those with manufacturing experience.
If you’re looking for a manufacturer to make your products, you can easily research options online. Remember that finding the right partner can take some time, so don’t get discouraged. It’s worth the wait to make sure you choose the right partner to create your dream product.
Next, you’ll want to check references for the manufacturer or wholesaler in consideration. As with any business, you need to make sure you’re dealing with someone legitimate and capable of fulfilling the contract.
Consider asking questions like the following to each company you’re considering so you can make an informed decision:
- Do you have control over package and product branding?
- Production and cost
- Where are the products made?
- What location are the products shipped from?
- What will the total cost of production and shipping be? Are there any potential hidden fees?
- What are the minimum order quantities?
- Will you have to commit to a certain number of units or spend a minimum amount?
- How long will it take for them to create, fulfil, and ship the product?
- Shipping and inventory management
- What does shipping and inventory management look like?
- Will you need to ship and store, or is that included as part of their service?
- Is there any additional cost? What are the timelines and conditions?
- Terms of contract
- What do the contracts and terms look like? What are the payment terms?
- Is there leeway for the things your business or customers need?
- Is there an evaluation period? What are terms for termination?
- What are the conditions to get samples? Are they free, or do you have to pay for them?
- What are your return or refund policies? Do you have liability insurance?
- Does the product have or require certifications?
- Customer service
- What do support and communication look like?
- How frequently will you be updated on information like inventory, product changes, or even discounts?
- How can orders be placed?
Make the analysis, evaluate all your options and then choose your partner.
How long do your products take to make?
If you are selling handmade products, will you make your items after confirmed order? Or will you keep some inventory on hand so the product can be shipped immediately? If you’re working with a dropshipper or wholesaler, you will need to understand their policies. You also need to ensure they always have enough products on hand to keep up with your demand. If they need to order or make products to fulfil your requests, how long will it take to restock?
When you first start your online business from home, you may want to start with a small inventory and keep your running costs low. As your business grows, however, you will need an inventory storage method that scales with it.
If you’re making products yourself, you can store them in your home or garage. Depending on how many you make in advance, you could also get a storage locker for extra inventory.
If you’re using a wholesaler, you’ll need to decide between storing products yourself at home, in a storage unit, or even a warehouse. You may also consider using a fulfilment service that will store and ship the products for you.
If you’re using a dropshipper, they will take care of storing all the inventory for you.
2. Order fulfilment
Order fulfilment is an important value proposition for your store. It has the power to attract customers, but it can also push customers away. So if you are new to selling online, think about starting small.
If your product is a digital one, then delivering orders to your customers can be set up on autopilot through your e-commerce platform. This allows your customers to get the product or service immediately once payment has been made.
On the other hand, physical products will require shipping to buyers. So it would help if you determined which method is easier and more affordable.
- For handmade products, will you keep running to the post office yourself to send the parcels? Or will you outsource the shipping service? Whatever option you choose, think about the cost either in cash and/or in time.
- If you’re working with a wholesaler or a manufacturer, will they ship the products for you? Will you ship products yourself or work with a shipping and fulfilment company?
- If you’re using a dropshipper, they will handle all the shipping and fulfilment for you.
There are a couple of tips to keep in mind when you’re getting started with online shipping.
- Start by researching your competition. You may uncover some really great insights on what shipping method works and what doesn’t in your category.
- Make your shipping policies are very straightforward. This will prevent confusion or surprises, making it more likely your potential customer will follow through with their purchase.
- Offer multiple shipping options based on different shipping speed or carriers. How quickly a shopper receives their product can be just as important as how much they pay for shipping.
- Lastly, think about the management of returned goods for various reasons including defects, wrong product shipped, late delivery, etc.
3. How will you communicate timelines?
Communication with the suppliers
From the very beginning, establish a clear plan for communicating with your suppliers. Make sure you’ve both set clear expectations for what information is required from each of your ends to allow things to run smoothly.
- For handmade products:
How long will it take for you to receive raw materials from your suppliers?
- Partnership with a wholesaler or manufacturer
How far in advance do you need to place orders before you receive your products to sell?
- Partnership with a dropshipper
What are the expected time periods for processing the order, dispatching the order, and shipping the order?
Furthermore, how will the supplier communicate this process to you, so you are being kept in the loop throughout?
Depending on your wholesaler, manufacturer or dropshipper, they may prefer communication via email, phone, or through an integrated system, such as Enterprise Resource Planning (ERP) software. With ERP both parties can update statuses and communicate back and forth. This last method or any integrated method is preferable since it’s the best way to know in real-time the status of the inventory on the supplier’s side (assuming obviously that the supplier’s ERP is kept up to date).
Communication with the customers
Additionally, your customers won’t like to be kept in the dark about their order. Therefore, you must set up a system for communicating with your customers throughout the sale and shipping timeline. Nowadays, different communication methods are combined. They include emails, text message updates and buyer-communication applications that allow the buyer to track their order online.
At this step, you’re almost ready to start your business. It’s now time to define your brand identity. Branding is any name, design, or other written or visual attribute that clearly identifies a company, product, or service as unique from any other on the market. This includes focusing on design features such as your:
- Colour scheme
- Typography & Font
- Visual elements like graphics/photography
Keep it short
A short name is easy for you when marketing and promoting. It’s also easy for your consumers when searching and sharing.
Most common names are taken if not trademarked. Being original with alternate spellings or meanings can also increase your brand recall.
Consider your branding
Your chosen name will need to be branded and transformed into a relevant icon and logo. Do you have a vision of the perfect design or icon for your business? Perhaps you can start there and work backwards into the perfect name.
Same as for the niche ideas, list a few possibilities and test them through a quick validation process to test their market fit.
People will be talking about your business. Say your name ideas aloud a few times to test how they roll off the tongue.
Check the availability of domain names for your business ideas. We used Names.com to test variations and see what URL extensions are available.
Compare your ideas against available social media handles. Hop onto Facebook, Twitter, Instagram, Pinterest, YouTube, and other relevant sites and search for variations of your name ideas as well as similar businesses.
2. Designing the logo
Your identity must extend beyond a compelling name into a strong, recognizable brand. By brand, we’re talking about your logo design, colours, font choices, and all that visual elements like graphics and photography. Building these assets from the start is important. They will help bolster your advertising, create a more coherent website, social media, and e-commerce experience, and inspire beautiful packaging and paperwork.
As a small business, you can try to create your logo yourself or with the help of a friend using easy graphic design tools available out there. At Dreamed Lifestyle, we used Canva to design our logo. If you prefer to have an experienced designer, visit sites like Fiverr, or UpWork to hire a designer at an affordable rate.
As an online entrepreneur, you don’t have to invest in expensive office space. But you still need an address where people can find us. This is your website.
For creating your website, there are a ton of different options. Your choice will depend on your niche and how you want to set up your business.
- If you’re looking to create a static site or offer a few simple pages, you may consider starting with Wix or Squarespace, as their single page plans and themes are inexpensive or free.
- If you’re starting a blog, WordPress is the best way to go. WordPress makes it easy to design and manage your own website. It also provides readability testing, content management, and various plugins.
- If you’re an online retailer and will be conducting e-commerce activity through your website, there are many excellent platforms out there. Just google a little bit, and you’ll get unlimited options to choose from.
4. Content guidelines
Your content is how you communicate with your customers, engage with your target audience, and portray your business professionally. Therefore, you must determine the following content-related elements for your brand:
This set of rules should outline what to do and what not to do when writing content associated with your online business. It should also focus on:
- Grammar rules
- How to format text
- What words should and shouldn’t be used in association with your brand
Copy guidelines are beneficial when your business’ content involves multiple writers or helps you stay on track.
Tone of voice
This isn’t about what you say, but rather how you say it. Think of your online business as having a certain personality. Then determine how this can be communicated through your words and what sort of impression you want to have on your audience. For example, will your tone of voice be formal and professional, young and trendy, or friendly and conversational?
This is a summary of the aims and values of your company. When writing your mission statement, you should think about: Why your online business exists? What your overall goals are? The products or services you provide? Your target audience? In which geographical location will you operate?
Next, you must understand how your target customer will move through the stages of the buyer’s cycle (aka acquisition funnel) until they make their first purchase. These are the four phases:
- Initial purchase
- Repeat buyer
A prospect is a potential customer who has been qualified as fitting certain criteria outlined by a company based on its business offerings. This is how prospects walk through the sales qualification process to assess if your company’s products or services are the right solution to their problem.
This step, called awareness, is the first time potential customers or prospects interact with your products or services. It typically happens after they begin online research for a problem they are trying to solve.
Lead generation and nurture
Next, potential customers want to have confirmation that you are an expert in your industry. They may think you are the right solution for their problem and are looking for information to support that. At this point, they may have expressed interest in your company, becoming leads, by providing an email address or following you on social media, but they haven’t made a purchase.
The leads expect that you demonstrate that you are an authority in your field and an expert in your niche. You can do this through email marketing, blog posts and articles, case studies, or even offering a free trial of your services to convince them you are the right solution.
This is the funnel stage where a lead has decided to buy and turns into a customer.
It’s known that it’s far easier to sell to existing customers than win new ones, but many online stores spend most of their marketing budget on the latter. The best strategy is to inspire deeper customer loyalty in the people who have already purchased from you to increase revenue quickly. There are multiple ways to build the fidelity of existing customers and convert them into repeat buyers. They include
- Deliver items or services on time and in good condition
- Amplify customer service as part of the delivery
- Surprise and delight by being creative by, for instance, using impressive packaging or including a surprise gift.
- Follow up immediately
- Follow up regularly
- Deliver value, not just sales offers. You could send tips and tricks relevant to your customers, send answers to commonly asked questions, offer free resources, and send links to new blog posts.
- Use social media to stay top of mind.
- Implement a points and rewards system
Every marketing strategy should hinge upon your target audience to maximize your resources and ultimately get your first sale.
Start with the nuts and bolts of inbound marketing, which is a strategy that encourages people to actively seek out and engage with your brand.
An inbound marketing strategy can include several different channels and types of content to attract prospects and customers to your website. The aim is then to continue to engage and delight them, even after they become customers. This allows you to grow a business that provides value and builds trust amongst your audience.
Inbound marketing strategies to consider include:
- Video marketing
- Paid advertising (including Facebook and Google ads)
- Content creation and marketing
- Email marketing
- Social media marketing
This takes us to the next …
Social media is a great place to come face-to-face with consumers and boost your brand awareness. Consistently sharing high-value content and engaging on social media is a surefire way to become known among your audience and convert your social media followers to real leads.
Regardless of what social media networks you’ve decided are good fits for you, there are many ways to market your online business and convert your followers to leads:
- Share product or service updates with pictures or video
- Ask questions and encourage conversation around your industry or business.
- Announce discounts or special events, especially those available to only email subscribers
- Connect with influencers in your niche and engage with them
- Run giveaways or contests for free products
- Leverage product or service reviews, and ask previous customers to post about your business (via user-generated content)
At its core, your social media profiles should tell a story about your brand, your product, your team, or your mission.
Don’t blast your followers with “Buy that!” or “Check this out!” Instead, post/share content that genuinely interests them. Every once in a while, you will post about your products or services. Since they’ve already established so much trust and value with your posts, your followers will likely welcome the occasional “salesy” post.
The key to engaging your social media community is consistency. An active and engaged brand will be much more successful than one who hardly posts on social media. And as an online business, your social media will act as an extension of your customer service and care. Your networks can help you build loyalty as you build your brand.
4. Choose the best e-commerce platform
An e-commerce platform can be thought of as the central hub for your online business. When determining which e-commerce platform is right for your business, you’ll want to make sure it offers the following:
- The ability to sell an unlimited amount of products, including both physical and digital products
- Basic built-in e-commerce features, including promotions and discounts, analytics, and catalogue management.
- An e-commerce website builder that is cost-efficient, easy-to-use, and mobile-responsive
- Security features, such as secure payment processors
- SEO-friendly features, such as the ability to have a custom domain name, meta tags, meta descriptions, SEO optimized URL structures, and more
- Abandoned cart recovery tools
- An extensive app store with pre-built integrations and add-ons
Aspects to consider when choosing your Ecommerce platform:
Even though ecommerce hosts offer competitive packages, you have to understand what you’re getting to decide whether or not they’re actually cost-efficient. Paying more doesn’t always give you the best experience.
However, choosing the cheapest option will usually leave you looking for add-on capabilities from somewhere else. Piecing together fees from various providers is usually the most expensive way to go.
b) Target audience.
Advertising to social media users is a must if you want to capture a massive and engaged audience. So looking into a platform’s marketing features is smart.
c) Number of products you have.
Maybe you offer a wide assortment of physical products, or perhaps a significant number of variants for your basic product line.
If you have a large catalogue and need several product pages or plan to grow your business, choosing a platform with limited capabilities essentially restricts your business’s upside.
c) Room for growth.
It’s important to consider a web host that can grow with you. It’s a better idea to choose the best web host off the bat so that you can familiarize yourself with them as you scale up.
d) Type of customer service available.
You’re inside an ecommerce platform every single day. When that time comes, it’s good to know that you can get a hold of a real-life person to assist you with the problem, whether that be through phone support, email, or chat.
Step 11. Launch your online store
Since the following upfront preparation tasks have already been carried out:
- the product(s) or service(s) you will sell has been chosen
- your target audience has been analyzed
- you sorted out the product or service sourcing and fulfilment aspects,
- you defined your brand identity
- clarified your marketing strategies
- all legal aspects of your business are in order
It’s time to focus on essential tips for creating and launching your store. By creating an organized approach to creating and launching your online store, you’ll set up your store for long-term, scalable success.
1. Before your online store is open
Ensure your online store looks professional
If you want to have a viable online business, you need to focus on quality from the outset. It would help if you built a store that looks professional, attracts your target customer, and has the right calls to action to help them convert when they visit your site.
An attractive website design can definitely drive online sales. But, your design shouldn’t outshine what you are trying to sell. Remember that online shoppers will decide if they trust and want to purchase from your website in about three to five seconds.
That means you need to have a simple, trustworthy, and easy-to-use website. What you are selling and where a customer needs to go to find it should be crystal clear. Resist the urge to overload your website with so many call-to-action buttons, categories, or imagery that people get overwhelmed or lose patience, waiting for everything to load.
To get paid, you’ll have to be ready to accept payments. Might be obvious, but it’s quite essential to running a successful business. Payment gateways are how you collect money from your customers. Typically, your ecommerce platform will recommend which gateways work better with their system. Once you have a list of options, you’ll need to get a full picture of how it works and how it will affect your bottom line, your finances.
You also want to choose a payment gateway that can grow with your business. Before you lock yourself in, ask the following questions about each payment solution:
- Are there setup fees?
- Are there monthly and/or transaction fees?
- Are there penalty fees? If so, what triggers them?
- Is there a minimum balance requirement?
- What about transfer delays?
- When I need help or support who do I contact? How do I contact them? What hours are they available?
Make your choice and go.
I’ll admit it when I hear the word ‘taxes’, I cringe. Not you? But, the reality is that setting up your taxes correctly from the beginning is a game-changer for your business.
All you need to do is speak with a tax professional. This can be a certified accountant or any authority on taxes in your area. Trust me; you’ll save money and headaches in the long run by consulting a pro.
2. After your first sale
Once your first sale is made and delivered successfully, think about the follow-up of your customers. Remember that the cost of gaining new customers is higher than the one of keeping the existing ones.
- Contact customers to thank them for their order and provide a delivery timeframe.
- Reach out to customers once their order has arrived to ensure they’re satisfied
- Encourage customers to provide a review or testimonial about your business or product.
- Invite your customers to keep in touch through social media channels
- Invite customers to join a loyalty club where members are offered special discounts
- Offer rewards for new customer referrals
- Send personalized cards for special occasions such as birthdays, offering gift promotions.
Generate repeat sales
- Send updates via email and social media to advertise sales, offers, and promotions.
- Offer product demonstrations that may be of interest to your customer.
- Highlight related products that provide customers with additional benefits
As a small business owner, you need to understand your ecommerce website data for various reasons:
- To ensure your ecommerce platform is performing,
- To understand customer journeys and
- To learn what site content or merchandising is performing best.
There are three main areas, as well as several KPIs (Key Performance Indicators), to consider when measuring your online business’ success:
This includes the data from your online business’ website where customers can buy your products or services.
Important KPIs to monitor include:
- Number of sales (Total number of sales by the hour, day, week, month, quarter, or year)
- Conversion rate (A percentage of how many visitors converted to buyers)
- Average Order Value (How much a customer typically spends on a single order)
- Shopping Cart Abandonment Rate (The percentage of visitors who abandon their cart during the checkout process.)
- Product affinity (which products are often purchased together)
- Traffic (New vs Returning) (How many of your website visitors are new vs returning users?)
- Site Speed (The speed of your website and specific landing pages)
- Bounce Rate (The percentage of users who leave your website after viewing only one page)
- Traffic Source (Where your visitors come from and how they get to your site)
- Mobile Site Traffic (How many visitors come to your site via a mobile device)
- Day Part Monitoring (What time of day you have the most visitors)
- Product Affinity (Which products are purchased together)
You’ll also need to analyze your website in terms of acquisition and audience behaviour.
Think about the following questions:
- How much traffic do you drive organically?
- How much comes through direct traffic, social media, or referrals from other sites?
- How long do visitors stay on your site?
- What percentage of visitors make a purchase or take another action, like signing up for email lists?
c. Business performance
Additionally, you’ll want to focus on your business’s profitability, growth, and overall progress.
Measure the following KPIs to ensure you’re achieving your desired goals:
- Customer Acquisition Cost (cost of winning a new customer)
- Cost of Goods Sold (How much you’re spending to sell a product)
- Gross profit (Total sales minus the total cost of goods/services)
- Customer Lifetime Value (total amount of money a customer is expected to spend in your business during their lifetime.)
- Average Margin (your profit margin averaged over a period of time)
- Cost of Goods Sold (How much you’re spending to sell a product)
- Competitive Pricing (What your competitors are charging for a similar product).
Step 12. Focus on growth
Consider developing your social media, blogging, SEO efforts such as keyword research and targeting, and producing informative content that addresses your target audience’s wants and needs.
They may include selling your products or services on other online channels, such as Amazon, Etsy, and eBay.
Think about growing your email subscriber list through offering opt-in lead magnets such as eBooks, event invitations, printable art, discount codes, masterclasses, video lessons, and more in exchange for the user’s email address. It will help if you continue to nurture your sales funnel by sending targeted emails offering value and in-depth content to turn leads into sales.
Planning is vital to your business, no matter what stage you’re at. Efficient planning requires to set realistic goals for growth. These can be quarterly or yearly goals. This gives you time to prepare for upcoming growth. As you near these goals, research what resources or features you will need in your next stage. Setting goals require money to achieve them. Let’s talk about how to make sure you’re bringing in the capital for future use.
Get money in your business
Small business owners are tasked with one large responsibility: securing the funding needed to run or expand their business.
You probably have already tried bootstrapping, a tactic to fund your small business. Bootstrapping is the business term coined for relying on either your own personal funds (your personal savings), a crowdfunding source, or money put up or loaned from friends and family.
The next logical step for many is pitching to investors. While investors can bring great value to your business, such as expertise and funds to execute your business plan, they are also involved in brand ownership.
Finally, there might be other local solutions to support startups. Check with local services in charge of business promotions.
So what’s the best way to raise capital for your project? Below, find the most popular funding sources used by business owners in 2018.
Having direct insight into your analytics will provide a stronger pitch to investors and more confidence when spending money on updated technology. Monitoring your business’s performance gives you direct insight into the speed of your growth. Sales performance is the first metric you’ll want to begin analyzing when looking to scale.
Look at the trends. Is your healthy? How fast are your sales growing? What do you attribute that growth to? Having a strong sales performance is a key indicator of your scalability because it reflects your business’s health. If the metrics are positive and growing, you can confirm growth is in your future.
3. Determine your resources
As you grow, you’ll need to add resources to your business, as you won’t be able to manage a large business entirely on your own, both human resources and technical resources.
If, for instance, you are looking to ramp up your content marketing with a blog on your website, you may want to consider hiring content and/or SEO manager or freelancers who can scale your content and make sure you rank on leading search engines like Google. Or perhaps you want to build your community on social media quickly. Consider hiring a social media manager who can curate posts, create captions, and drive engagement for your target audience across platforms like Instagram or Facebook.
For hiring human resources, consider outsourcing, if possible, to emerging countries where cheap and still competent human resources can be found. It might be helpful to check with Fiverr and Upwork.
Identify areas to grow where software has added value, like utilizing shipping software or implementing a customer support chatbot on your website, like Driftbot, which can help you attend to customer needs on the go, 24/7.
Taking the time to see where you need help or be more productive will help you prioritize what resources to invest in. Once you invest in these resources, be sure to evaluate their performance to ensure you are getting value for your spend.
I hope this guide inspires you to get started creating your own online business. You’ve learned of the key tools, mindsets and strategies you need to create your online business. Whether you want a business that makes an extra $1,000/month of passive income, or $10,000/month so you can leave your full-time job and work from anywhere, you can do it.
If you need support at any point in this process, we’ll be happy to welcome you to the community that taught me to create my own online business in only a couple of months.
Thus simply click here and see by yourself.