Following my last article Passive Income Ideas, I now openly share with you how you can explore starting an online business to build a source of passive income.
There are many searches on Google every month for the keyword “Make Money Online”. There are also many scams out there that promise to teach you the secret blueprint to internet business success, as well as software or programs which will drive loads of internet traffic to your website, making you tonnes of money.
The image below may also be familiar to you if you have been googling information on starting an online business.
Benefits Of Online Business
The huge benefits of an online business (or internet business as the terms are used interchangeably) are often sold to you upfront:
- you can work anytime, anywhere
- your investment capital is very minimal
- you can target the whole world for your products and services
- your business operation is 24×7, 365 days a year
And these are all true but before you quit your day job and jump on the bandwagon, please read on to understand the whole process and increase your chances of being successful for any online business.
I like to see an internet business as a business venture. As you start an online business, you are effectively becoming an entrepreneur. It may involve very little capital depending on your plans, but trust me you absolutely do need to put in time and efforts and those equate to money.
Typically, there are 5 major steps you have to think through when you start an online business. First you identify the niche market you want to be in and a good starting point is to relate to your hobbies, interests and passions. As we are talking about eventually embarking on something you really like to do, and not taking on another job that provides you the active income.
Your interests, hobbies and passions can be photography, electronic gadgets, traveling, cooking, personal finance etc etc. Within that, you want to narrow it down a little bit more, so say for traveling, it could be budget traveling for retirees. The niche has to be narrower and more targeted as otherwise you are competing against the big boys for a more general niche like traveling and you may not succeed well.
The whole process flow is depicted below.
After you have decided on the niche market you want to be in, you should do some market research:
- Who are the players in the niche?
- What products or services are you going to offer?
- Are these your own products or services or you will promote other vendors’ products through affiliate marketing or drop shipping (don’t worry about these terms for the moment)?
- How intense is the competition?
The next step is about building up your web presence. In this day and age of the prevalent use of social media. web presence can be more than a website. There are people with many followers on YouTube, Instagram, Facebook Page (they are also called influencers) and that’s their primary web presence and it is considered a form of web presence that can be a viable online business.
More often, you will have a website built and then supported by various social media platforms like YouTube, Instagram, Facebook, Google+, Pinterest, Twitter etc. All of these interconnect with one another to create a spider of traffic.
With the web presence, how do you build your followers or drive traffic to your website. A nicely designed website with no traffic or little traffic is not worth anything. Would you be relying on your social media presence, or do some paid ads like Search Engine Marketing or Social Media Marketing to promote your online business or do you have knowledge and skills around Search Engine Optimization (SEO) and get free organic search traffic to your website?
Email marketing is often touted as a must and a key success factor for an online business. Email marketing automates your sales funnel and having a good size of email subscribers relevant to your chosen niche is considered a precious asset.
Exactly How You Make Money Online
Now that you know at the high level how to set up an online business, how do you actually make money online? Well there are a few ways internet marketers monetize their online assets:
- advertising revenue through advertising networks, the most typical being Google Adsense
- earn affiliate commissions by referring sales leads to the vendors
- sell your own products online
- sell products through drop shipping
- paid articles on your blog
If you are just starting out, your initial aim would be to set a goal of a few hundred dollars per month from internet business and then work towards a few thousand dollars per month say one or two years down the road.
Very successful internet marketers are making 6-figure incomes per year. There are many of them out there but I like Pat Flynn of Smart Passive Income and Spencer Haws of Niche Pursuits. Pat Flynn used to be an architect and built a very successful affiliate marketing business while Spencer Haws was a Business Relationship Manager in a bank before building many niche sites and earning primarily from Google Adsense advertising revenue; he is also the founder of software company LongTailPro, a keyword research tool.
An internet business takes time to nurture. While you still have a full-time job, if you are serious about having an online business, devote a few hours a day learning and building up the business. When you see the initial results, you can then ponder if you can take it full time.
How Should You Get Started?
As you read this article, you will come across terms used in internet marketing, it is a new language that you have to learn. I don’t want you to be concerned about these terminologies as of now but to understand what internet business entails.
To me, there are two parts to an online business, one is the business ideation and marketing part and the other is the technical know-how part. In fact, the business ideation is perhaps more important. If you have a great online business idea, you can effectively outsource the rest and get someone to build the website, write up the necessary content, do up the SEO and also undertake the online marketing as well.
Assuming you intend to do most tasks yourself, then it is critical to learn the skills in a structured manner from someone or to learn it online from trusted sources. What are some of the skills you should get familiar with? Some essential skills are:
- business skills identifying profitable niches
- marketing skills, understanding your audience, how to differentiate your products, services, and solutions
- website design
- sales page, landing page design
- search engine marketing SEM
- social media marketing
- keyword research
- search engine optimization SEO
- email marketing and list building
- digital asset management
While having a good understanding of all these areas, you can’t be great at everything. Usually, you want to focus on what you are particular good at, and there are ways you can engage freelancers or outsource some of these tasks which you may not be good at or hate doing
In subsequent articles, I will describe in further details the skill sets which are required.