Work Remotely by Starting an Online Business
If you want to live overseas or travel for an extended period, one way to support yourself financially is to work remotely. But the number of location-independent jobs that allow you to truly work whenever and wherever you want are limited.
Another solution could be to start your own online business.
Whether it’s a blog, a store, an online course or any other type of internet-based business, running your own website could be your ticket to location independence and being your own boss!
The good news is that launching a website is relatively easy. Anyone with a bit of technical knowledge can build a website. But launching a website that becomes a successful business and generates enough income for you to live comfortably is infinitely harder.
If you’re serious about building an online business, you’ll need to be prepared to invest a substantial amount of time and effort.
The consensus among blog owners is that it takes around 18 months to build a website and grow your audience enough to start earning money.
If your plan for an online business is to start a blog, that means you could have to wait a very long time before breaking even on your investment. The long-term commitment that’s required is why many blogs and online businesses don’t succeed. Many were either poorly planned to begin with, or their owners gave up when they didn’t see immediate returns on their investment.
The 3 main online business models
If you’re thinking of starting your own online business, you should consider how it will make money.
If you’re planning to open an online store that sells products, the answer is obvious. But shipping goods is by no means the only way to make money on the internet.
These are the 3 main ways that online businesses generate income. Some internet-based businesses only use one of these methods, while others use a combination of all three…
1. Selling physical and/or digital products
There are plenty of e-commerce businesses that act as virtual shopfronts, with physical products sold online instead of at a bricks-and-mortar shop. The advantages of this model, over having a physical shopfront, are that your overhead costs are much lower (because you don’t need to rent physical shop space) and your customer base is not restricted to a certain geographical area.
It’s relatively easy to set up an online shopfront, and you could even use an existing platform like eBay to market your products. But when selling physical products over the internet, you still need to store your unsold stock somewhere. And unless you can take your products with you when you travel, this won’t necessarily bring you location independence as you’ll need someone to send the orders when they arrive. You would also need to pay for postage costs (or pass this cost onto your customers).
Instead of selling physical products, many online businesses sell digital products or services. These could include:
- Online training courses
- Professional digital services (e.g. webpage/graphic design, photo editing)
- Software or Apps
- Music, photos or videos
- Consulting services
- Websites or forums with paid content (e.g. news websites/blogs with valuable information covering niche topics)
With some of these goods and services, you may earn royalties or one-off income for every sale. Or, perhaps you might launch a website or online group with a subscription model for regular income – although it can be much harder to convince customers to commit to making regular payments.
2. Advertising revenue
Of course, not all online businesses make money by selling products to their end-users. Many websites (and media organisations, for that matter) make most of their money by selling advertising space.
For example, most websites run banner advertisements. The website provides informative content for free, in the hope a large number of people will visit. The website then earns a small amount for each ad impression or click.
Of course, banner advertisements are not the only source of ad revenue. Many online businesses also sell “sponsored posts” or sell campaigns to advertisers who wish to target the same demographic that the website attracts (e.g. a handbag maker might pay a premium to advertise on a website about handbags).
YouTube “stars” and influencers can also make a lot of their money from advertising. In the case of YouTube, the video’s creator might earn a small commission every time their video is viewed. And successful influencers can get paid to promote a product or brand, leveraging the value of their audience.
3. Affiliate marketing
The third method is a hybrid of the first two.
With affiliate marketing, online businesses do not sell directly to their users and are also not getting paid directly for advertising products. Instead, the business will earn a commission if somebody buys a product they found advertised on that website.
Many product review and comparison websites rely on affiliate marketing revenue. For example, a website comparing credit cards might provide useful information or even rankings of different credit cards, in the hope that the customer will then click through from their website and apply for one of the featured credit cards.
When a customer clicks through to the seller’s website, this is generally tracked. If the customer then goes on to buy the product, the website will earn a commission – usually a percentage of the sale amount.
The typical commission amounts vary wildly depending on the type of product. In general, highly competitive product categories with low margins attract the lowest commissions. But some businesses may offer higher affiliate revenues on products with higher margins, or in order to attract more affiliates (e.g. digital software or adult toys).
Finding your niche
One of the challenges with launching an online business is finding something that nobody else has done before (or that nobody else is currently doing well).
The key is finding an underserved gap in the market. If you’re starting a blog, try to find a topic that enough people would be interested in but that nobody else is covering.
This can be a challenge. If your topic is too broad, there’s a good chance somebody else is already covering it. If it’s too narrow, you may not be able to attract a large enough audience to make it worthwhile.
Choosing a topic that you’re passionate about will certainly help you to stay motivated and make the endeavour more interesting for you. But if nobody else shares your interest in that niche, or if the internet is already flooded with quality content on that subject, it’s unlikely to make a good business unless you can find your own unique angle.
Finding your customers
Once your website launches, the next challenge is to find your build your audience. How will you market your online business?
A basic understanding of Search Engine Optimisation (SEO) is hugely important here, as it allows you to leverage search engines like Google to help your audience find you organically (i.e. without paying for advertising).
If your website is not “SEO’d” well, you might as well not bother as nobody will find you. That’s because 91.5% clicks on Google search results are on the first page (i.e. in the top 10 search results).
You may also need to invest in advertising – paid or otherwise – to attract a larger audience.
If you’re clever – and a bit lucky – you may be able to generate some free publicity by getting your message into mainstream media. For example, some start-up businesses plan a PR stunt or send press releases to media outlets in the hope journalists will find their story compelling enough to write about (or are lazy enough to copy & paste the press release…).
But having worked in journalism, I can tell you that I received many pitches from businesses trying to get free publicity on a daily basis. I deleted the vast majority of these emails as they were so obviously just trying to get me to plug their product for free and didn’t have any unique, new information that would interest my readers. And by the way, emailing me 3 more times to “follow up” doesn’t work either. So, use this strategy with caution.
Make a business plan
Starting an online business is generally a long-term commitment, so you should be prepared. You’ll probably make mistakes and change things along the way. But it’s really helpful to start out with a business plan and to understand why your website exists. Why people should visit it?
(Simon Sinek has a great book called “Start with Why”, which I would recommend to any budding entrepreneur.)
Once you’ve worked that out, then work out how you’re going to do it, and how your business is going to make money. A few questions to think about are:
- What’s the business model going to be?
- Do you want to build a business that will provide you with a steady long-term income stream? Or is your plan to quickly build a profitable business and then sell it?
You may find it helpful to speak to somebody who has already successfully launched an online business. Their advice – and in particular, what mistakes they made – is invaluable.
Finally, understand that online businesses are not for everyone. The rewards can be great if it’s done right, but far more digital entrepreneurs fail than become millionaires. Understand the commitment, understand the risk involved and know what you’re getting yourself into.