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The Ultimate Guide: How to Start An Online Business

By August 14, 2018 August 12th, 2020 No Comments

Table of Contents

  1. Intro
  2. Creating a course
  3. Manufacturing a physical product
  4. Providing a service
  5. Starting a blog
  6. Selling software products
  7. Competitive advantage
  8. Target audience
  9. Demand
  10. Research
  11. Business Model
  12. Profit Margins
  13. Legal
  14. Logo and Name
  15. Website and Domain
  16. Payments
  17. Marketing/Advertising
  18. SEO (Search engine optimization)
  19. Summary

When starting an online business, we obviously can’t just think about how much money we’re going to make.

We need to provide some kind of value to people.

We need to focus on that only.

Creating value for people.

Some of the greatest companies have come to where they are today because of the tremendous amount of value they have created. Facebook, Amazon, Netflix, and Google, the companies with the highest valuations in the world, cannot be where they are today without the amazing products and services that have given value to so many people.

Facebook has brought us a social network where many can connect and share wonderful experiences.

Amazon has brought us the best products at the best prices with the best shipping possible

Netflix has brought us on-demand streaming of all our favorite tv shows and movies at the click of our mouse.

Google has brought us the best, most relevant search results to information and content

Sounds pretty cliche? But this is the truth to making success in an online business


So where do we start?

Start by thinking about what you are good at and do naturally better than most

Maybe even think about the problems you have in your daily life

“Opportunities lies in where people complain”

- Jack Ma, Founder of Alibaba Group

If you're good at something consider providing it as a product or service

Here are some ways to make those ideas come to life:

  • Creating an educational course
  • Manufacturing a physical product
  • Providing a service
  • Starting a blog
  • Selling software products

Creating a course

You can't find anything that teaches a particular subject? or maybe most of the material you can find is very dull and hard to use.

The E-Learning market size is growing from over $165 billion in 2015, estimated to be over $240 billion dollars by the year 2024.

By creating an online course or a book, you have the ability to reach a large audience. You can teach people through videos, audio, reading, quizzes or any effective way of learning. You can offer subscription services or a one time offer to access all your course content.

Offer your courses on Udemy or on your own website.

Manufacturing a physical product

You bought a new iPhone case on Amazon and when you drop your phone, it still caused a dent on your phone. Maybe the case could have more protection by having a different shape?

You bought some new shoes on eBay and you can't run fast with these shoes. Possibly, the shoes could have been made lighter with different materials?

Total worldwide ecommerce sales

Total eCommerce Sales are estimated to be up to $4.5 trillion dollars by 2021.

You can also create physical products by contacting a manufacturer on Alibaba or even a US manufacturer. You can start shipping out orders through Amazon, eBay, Etsy, or even on your own website. 

One thing to consider when choosing a manufacturer is the reputation of the manufacturer.

Do they have a lot of good reviews? do they have some kind of quality guarantee? or certification?

Some great ways to start is by negotiating with multiple different manufacturers. Ask for samples and use Paypal for protected transactions. You want to avoid any scams overseas. Here's an article on finding a manufacturer for your product idea

Selling a service

Are you very familiar with using the computer? Maybe consider offering computer repair services?

You can start listing your services on Yelp, Yellow pages, Craigslist, or even on your own website.

You can also offer your services on a freelance website like Fiverr or Upwork

Maybe you're a local service business that can reach out to more people by being visible online

Build a website that presents all the services and features your business offers.

Take appointments online for in-store services or schedule online meetings for a client

Starting a blog

You don't want to sell anything? You can start a blog

You can start blogging about anything you are knowledgeable or have better insight on

You can monetize your blog through:

  • Google Adsense - Advertise for Google and receive money
  • Affiliate Marketing - Promote other products and receive a commission
  • Banner Ads - Put up banner ads for advertisers and receive money
  • Sell - Consider selling something with the reputation you built writing

Sell Software

Create a game or maybe make some software that makes your life a little more convenient.

Selling software has great profit margins and does not require a lot of work after writing all the software code.

You have the ability to sell unlimited amounts with no limitations.

You can sell software through your own website or on platforms like Envato, Apple app store, Google play store, Amazon app store, etc.

Competitive Advantage

Well, now you know what you're going to sell?

Then think about how you are going to compete with your competitors since you're probably not the only one in business.

Some questions you may want to ask yourself:

  • What is your competitor providing?
  • What features?
  • What is their price?
  • What is lacking in their product or service?
  • Can you make it any better?

Target customers

You know your product or service and you know your competition

Who will be your customers?

Some questions you may want to ask yourself:

  • Who are the group of people you are going to sell to?
  • What kind of people are they? What are they involved or interested in?
  • What are some of their problems? Are there enough people?

Don't get discouraged by these questions, but truly ask yourself and do the research to figure it out


Most of all if there isn't any demand for your business, what is the point of starting?

Some questions you may want to ask yourself:

  • Is there a demand for your product or services?
  • If not, can you create the demand?
  • Can you make people want your new product or service?


Here are some main things you probably want to research:

  • Competition
  • Target Audience
  • Demand

Start out by Google searching your main keywords.

If you are planning to start a shoe store, search for keywords such as shoes, sneakers, running shoes, etc.

Once you find who your main competitors are, look through their website and see what they offer at what price.

Consider even purchasing or even trying out their products and services to see the entire process of how they handle a customer.

Target Audience

If you really want to know what your target audience is like, then go to the places where they hang out.

Such as forums, social media outlets like Facebook, Twitter, Quora, etc.

Consider surveying people to understand your audience better and to get your questions answered. You can use Google Forms or SurveyMonkey to create and run your surveys.

Check out what your competitor's customers are saying by going on their social media pages or read reviews of your competitor


Try using google trends to see what people are searching. Is it popular?

Is it growing in popularity? Decreasing?

Try using Google Keyword Planner for numerical monthly searches.

Is there a demand? How many are actually interested?

Higher CPC would indicate more money opportunities for a particular keyword

Business model

At what price should you sell your products?

Should you offer sales and coupons?

Should you offer a subscription model or a one-time offer price?

Depending on your own business, different business models would be more effective than others

Profit margins

Setting your margins that is a loss to your business may be risky

A good margin could be anywhere between 25 and 35 percent for retail products and it is totally up to you to choose at margins you would sell. Something to consider is the number of sales you can get at a particular price versus the amount of profit

Subway offered 5$ footlong sandwiches at a loss but they were able to regenerate profits through the sales of chips and drinks purchased with the footlong deal.

Before starting any business, you probably would want to get your business registered and licensed.

As an online business, you will need terms and conditions along with a privacy policy

In the terms and conditions, you would indicate your own business's rules when a customer makes a transaction or interacts with your business

In the privacy policy, you would indicate what data you collect from customers and how you use it

All these things should be consulted with a professional

I'd recommend using Legal Zoom to get started

Depending on your location, some places may not require a business license, but the benefits may outweigh the costs.

Logo and Name

Choosing a name and a logo design may be important for identifying and building a brand for your business.

Consider choosing a name that is relevant to your products and services although not necessary

A name that is easy to remember and pronounce may be ideal

Choosing a logo design that is consistent with how you want to present your business may also be ideal

The psychology of color can come into play when you choose a logo, so consider choosing a color that matches with what kind of image you want for your business

You can try getting a logo design at 99designs by running a contest for designing your logo or even design your own for free at LogoMakr


Now that you have registered your business and have a product or service ready, you will need a website to be visible on the internet

Depending on where you decide, you will need to sell on your own website or a third party seller like eBay, Amazon, Etsy, or even on a Facebook page.

Here's a blog post on the pros and cons of each:

Running Your Own Website Vs Using a Third Party Service

If you were to start a website, you would need a domain name and a host

Godaddy is great for domain names or you can even get free domain names at Freenom

For choosing a web host, I'd recommend reading some of the articles mentioned below

After choosing a host, you would also need to either hire a developer or learn how to create pages for your website

There are many web hosts that come with page builders specifically for eCommerce, photography, blogs and pretty much anything you'd like with all the plugins/extensions available

Here are some articles that may be helpful:

Top 10 Cheap Web Design Services with Hosting

How To Find A Reliable Web Hosting Service (Honest Guide)


To receive money from your customers, you would need to apply for a payment processing merchant/gateway

You have options to go with opening a merchant account or going with an all-in-one payment solution that provides the merchant account and the payment gateway.

Here are some all-in-one payment solutions and their fees per transaction to get you started (in no particular order):

  • PayPal - 2.9% + $0.30 cents per sale, $30 monthly fee for Payments Pro only (no monthly fee for PayPal Checkout)
  • Stripe - 2.9% + $0.30 cents per sale, no monthly fees
  • Square - 2.9% + $0.30 cents per sale, no monthly fees
  • 2CheckOut - 2.9% + $0.30 cents per sale, no monthly fees
  • Braintree - 2.9% + $0.30 cents per sale, no monthly fees
  • Authorize.net - 2.9% + $0.30 cents per sale, $25 monthly fee. If you already have a merchant account, Per transaction 10¢, daily batch fee 10¢ and a $25 monthly fee


Without marketing or advertising, your business would not receive any traffic or sales

This is something that needs to be constantly worked on to achieve

One of the fastest ways to bring in traffic in the early days is to pay for advertising

Some great choices for advertising would be:

  • Google
  • Facebook
  • Twitter
  • Youtube
  • Banner Ads

Some other great ways to let people know your business is by being active on social media

Create your business's Facebook, Twitter, Quora, etc pages and start posting valuable content

Interact and reply to people to connect with your audience, but also to understand their needs and desires

Viral marketing is another great way to get a lot of people to know your business

Some viral marketing campaigns are:

  • Giveaways
  • Youtube videos
  • Any creative idea that elicits emotions

Here are some great examples of viral marketing that went insane

Although email marketing has been not so popular among the many marketing tactics, sending out emails to people that have already subscribed to your business has a much higher chance of converting

Creating opt-in campaigns and sending out offers through email is a great way to stay connected with your audience and gives you chances to sell to repeat customers


We all know that people use search engines to find products and services online


Since everyone Google searches to find the latest information on what buy, what to use, and what to read, understanding how Google decides to rank a website is pretty critical to driving a lot of traffic to your business

Some of the most important ranking factors to Google are:

  • Keywords
  • Backlinks

Wait... is that it?

Pretty much.

You can go and optimize your site by creating long titles and descriptive meta tags, create internal links, working on on-page/off-page SEO, etc.

Will this work?

Yes they will help, but you can do all these and still not rank very high

It is because the most important ranking factors are backlinks

So, what is a backlink then?

A backlink is a link to your website from another website

You don't just want any website linking to your website cause it can even lead to lower rankings

You want high page ranked websites linking to your business

How do we do this?

We can start by creating really valuable/unique content that people want to link to

Here is a great in-depth article on how to build quality backlinks with a brand new site


With all this information, go out there and get things done. Concentrate on creating value and then try to get yourself known out there. It won't be an overnight success, but if you keep working at it, one day it probably will be a success. Many successful companies today have not come to where they are without all the struggles and failures.

Give it all that you got, put in those hours upon hours to make your business better. Some are out there putting in 80+ hour work weeks to kick your butt.

Passion vs Effort

The saying goes.. do what you're passionate about. Which I personally agree, but not all the parts of doing business in your passion is going to be "exciting" and "fun". A good balance of doing a business you are passionate about and giving a good amount of effort is going to take you a long way.

Thanks for reading

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