Introduction
Are you ready to become an entrepreneur and gain financial freedom by starting your own online business? If so, you are in the right place.
This guide is about getting results. We’re not selling immediate gratification or instant success, because we’re talking about real life: real success, real challenges, real 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.
Our very own Gretta van Riel, who teaches our Start & Scale Your Online Store course, started her ecommerce business with only $25 in her wallet. In three months, this is how her income exploded:
In its first six months, Gretta’s store, SkinnyMe Tea, was making more than $600,000 in revenue a month. Since then, it has garnered 300,000+ customers around the world and multiple millions in revenue. Gretta has gone on to create multiple ecommerce businesses that generate millions in revenue. And there are plenty of other success stories where this came from, people from all over the world starting online businesses and generating passive to full-time income.
Doing so takes a lot of work. And to be perfectly honest, a lot of the time, it doesn’t work out. Then again, sometimes it does, just like it did for Gretta and many other online entrepreneurs. Either way, it’s an adventure of a lifetime. And shout out to you, because you’re here, reading this guide, putting in the time to educate yourself—and that’s how this work gets started. So let’s skip the hype and get right to it.
You’ll find this guide useful if…
Starting an online business has many benefits. Of course, people jump at the idea of making money: lots and lots of money!
That’s a very legitimate motivation. It also won’t happen overnight. Often people starting businesses go years without even paying themselves salaries. And getting rich is no guarantee. In fact, if you strictly wanted to make a bunch of money, there’s a good chance you’d be better off putting your nose to the grindstone at a desk job and starting a good savings plan. So gobs of cash aren’t the only reasons to start your own business.
Many people cite other justifications. Personal freedom is one. Owning your own business means controlling your own time. It means being your own boss. If you’re frustrated with working for others, if you’re tired of laboring to build someone else’s dream, this can be a powerful draw.
Financial freedom, too, inspires entrepreneurs. You might eventually become a millionaire. You might not. What you really want, presumably, is a better life, and entrepreneurship can give you a certain level of control over your finances that can make that possible. When you work for someone else, you’re making money for them. An hour of your time generates X number of dollars, but your money-making efforts are ultimately flowing upstream to your boss. Going into business for yourself means you can reap all the rewards of your work.
Can you live the life of your dreams? Absolutely — if your dreams are realistic. When you jump from your day job to your own job, to a company you create, you gain exciting new control over your life. You set your own schedule, control your own money, do your own thing.
You also encounter new challenges. Sure, you don’t have to work for your boss anymore. But you get a new boss: the market. Actually, you get a bunch of new bosses: clients, customers, growth and revenue goals, etc. Bills still stream in, month after month, and while you don’t have to work for someone else, you replace a steady paycheck with a new imperative: profit or perish.
And to meet and beat that challenge, you need to ask the right questions about your business, and be ready to find answers that work.
Frequently Asked Questions About Entrepreneurship
If you take only one thing away from what you’re reading, take this: Critical thinking is key. Let’s be honest and admit that when it comes to resources on business, the internet’s got a bunch of bullshit to offer.
But there’s also tons of gold out there. That’s a big part of why we started Foundr, to help our community cut through the BS and find the gold.
So what do you do? Well, we’re better off starting with a don’t: Don’t ever take anything you read or hear about entrepreneurship for granted. Instead, analyze ideas, try them out, keep what works, and discard what doesn’t.
Yeah, many potential paths on your business journey lead to a dead end. At the same time, there’s more than one road to riches.
The three core components of critical thinking are:
Here are some big questions to think about—with some answers to ponder too.
How likely is my success?
Depending on who you ask, something like 90% of startups fail. What does that mean for you?
It means that launching a business can be difficult. Your first idea may flop. Your second startup may fizzle out. It’s a crowded economy, and you’re competing with mega-corporations as well as other small businesses. You may have to try again and again.
You also might succeed on your first try, and many people do if they set up their businesses correctly. Remember, those stats on startup failure cover a wide spectrum of startups, and there are certainly things you can do to improve your chances. Business is also more accessible today than ever before. If you have a laptop and an internet connection, you’ve got what you need to start an online money-making machine.
Can I do this while working full-time?
Yes. Many businesses begin as side hustles (Foundr is one of them). It’s difficult to balance a full-time job with a burgeoning business, but it’s possible, and this is typically what first-time business owners do.
Working full time while you get your company off the ground can give you the financial security to start a business without taking major financial risks. In a later chapter, we teach you how to validate your business idea so you can start with a little more certainty and less risk.
Will I need investors?
No. Seeking outside capital is an option, sure, but most online businesses grow without investors. If you don’t have the connections to attract investment, or just plain don’t want other people mucking around in your business, you can bootstrap your startup.
This is somewhat contentious in the startup world, with some people swearing by raising capital. But we actually recommend you bootstrap your first businesses.
Creating Your Own Company: Pros and ConsTo succeed with starting an online business, it helps to know why you’re doing it, and what roadblocks lay along the way.
Check out this list of pros and cons. Which of these benefits appeals to you? Which costs should you be most aware of, and what steps might you take to ward off, or at least mitigate harm from the challenges of entrepreneurship?
Every day, everywhere, people are saying, “I’d love to run my own business. I just don’t know what kind I’d start.” It’s a common pain point. The trick is to review your options, taking note of the skills you have and brainstorming ways to monetize different business models.
Before drilling down into a specific niche, some higher-level brainstorming is a good way to start. In this post, we’ll look at a few different types of online businesses, how you might monetize them, and how much money you could make.
What Kind of Online Business Can You Start?As you ponder what type of online business you might launch, try and find an idea for which you can answer “yes” to these questions:
Do you care about it? Does it fulfill a need? Do the people who would have interest in your idea also have the money to pay for it? Could you find a way to differentiate yourself from the competition?
In Chapter 3, we’ll talk more about choosing a niche, but for now, check out these basic business types.
Services
Do you have a skill that people are willing to pay money for? Providing a service like writing, editing, or graphic design on a freelance basis can be lucrative if you work hard, make connections, and find clients willing to pay you what you’re worth.
The cost of entry for a services business is similar to coaching. Additional educational materials may be desired, however, as you progress in your business.
How Can You Monetize Your Business?
How can you make money from your online business? This, of course, is the key question. Without revenue coming in, this whole thing falls apart.
Here are four popular methods of monetization.
How Much Does it Cost to Start an Online Business?
At this point you may be thinking, “Whoa, whoa, whoa, slow down! Can I even afford to start an online business?”
Fair question. One bright spot is that the cost of entry for an online business is lower, generally orders of magnitude lower, than more traditional business models. Here are some questions to consider.
Do I need funding?
Early thoughts about starting a business often turn to investors. Should you seek funding from venture capitalists? The upside to doing so is more money to work with, which ideally means faster progress—a jumpstart ahead in the startup race. One downside to VC funding is losing some control over your business. Plus, pitching investors requires time and connections you may not have.
If seeking outside funding does interest you, however, here are a few resources from Foundr:
You could also bypass the gatekeepers and go straight to your future customers. With crowdfunding, you seek smaller contributions from a larger number of people, ordinary customers interested in seeing your idea become reality. Crowdfunding is great because it serves to validate an idea and gather feedback, while at the same time securing funding.
Yet fewer than half of crowdfunding campaigns succeed, so if you want to go this route, do some research. Running a successful crowdfunding campaign has become something of an fine art, and demands some knowhow. If you’re itching to get on Kickstarter or Indiegogo, you should read up first. Here are some resources from Foundr to get you started:
All of that said, we should note that you maybe, probably, don’t need funding. It’s entirely possible to launch your online business successfully without any outside capital.
Where funding can come in handy, though, is when starting a software as a service (SaaS) company, or when you’re developing hardware or other physical products, which often entail big upfront costs. It’s also more common to see entrepreneurs raising capital once they’ve got a couple of businesses under their belts, and have the track record and connections to secure outside investment.
What about a loan?
If you want to quit your job right away, you could live off a loan while building your business.
Emphasis on could. It’s a risky strategy. What if your idea flops? What if revenue isn’t coming in exactly how, and when, you expected? What if unforeseen problems or costs pop up? This isn’t usually the smartest route and we don’t recommend it.
What else can I do?
Instead of seeking funding, consider the alternative: launching your business with whatever cash you have and building it out from there. You don’t need a lot of money to do this. As revenue slowly starts to trickle in, you can reinvest it right back into the business, creating a cycle in which your company grows and grows.
Bootstrapping means that your business can be a side hustle, something you work on in your spare time while maintaining your main source of income. You can ease into it even while working your normal job, and start out with a minimum viable product to see what works (we’ll talk more about this in Chapter 5). Once your idea is tested, you can save up money and go wild, eventually building up enough income and cushion to warrant leaving your 9-to-5.
Full disclosure: We’re pretty big fans of this approach, and that’s how Foundr itself got started. Based on our discussions with entrepreneurs, and our own experience, there are so many low-cost ways to ease into entrepreneurship, that the risk of taking on investors or debt are simply not necessary most of the time. Not everyone agrees with this, and every business and founder is different, but that’s our two cents on this age-old debate.
How Much Money Can You Make?
It’s impossible to predict how much revenue you’ll bring in during that first month, year, whatever. Some people get lucky and reach their goals within a few months. Many work their asses off for years before seeing results.
What you can do, though, is make an educated guess. Once you’ve selected a model for your online business, figured out how to monetize it, and determined a niche (more on that in the next chapter), you can use a worksheet like the one below to do some back-of-envelope calculations about what you’ll need to do to reach your income goals (here’s the Foundr blog post where we first introduced the worksheet).
Monthly Recurring RevenueThe calculator below works off a monthly recurring revenue model. So if you were starting a SaaS business or an online membership course where you are charging monthly for product/services, you can estimate out the income potential.
With the 3 criteria you selected:
At $29 per month, with subscribers staying on for an average of 9 months , with 1200 customers, you will make roughly $261 per subscriber, and a total of $313,200 in 9 months.
If you want to determine how much money you can earn with single product sales, use this calculator below to estimate your yearly earnings.
If you want to get more granular and include business costs/operating expenses, use a worksheet like the one below to do some back-of-envelope calculations about what you’ll need to do to reach your income goals (here’s the Foundr blog post where we first introduced the worksheet).
Profit First WorksheetNOTE: Once you open the link, go to File > Make a copy… to get a version of the sheet that you can edit.
Add a revenue goal by changing the amounts in the orange boxes. Changing these values will give you numbers for monthly revenue, personal income, and other metrics based on your revenue goal. Editing the blue boxes—which represent an idea of how many customers you aim to serve in each year—will tell you how much money you need to get from each customer on a yearly and monthly basis.
In the green box, enter the cost of one unit of your product or service. This spits out a breakdown of where you can put that money, based on the percentages in the right-hand column. (If you want to get advanced, you can alter those percentages. Just make sure they add up to 100%!)
Here’s where the values generated in Step 2 come into play. You can edit the three boxes: how few customers you can have while still maintaining a viable business; the total of monthly costs like software, rent, etc.; and the average hourly wage or rate you pay your workers. This breaks your operating expenses down so you know how much you need to spend on service costs and how much is left over to pay for labor.
Here, you can record how many jobs you need to aim for each year.
One of the most important steps in building your online business is choosing a niche that is profitable and sustainable. As 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. Even if you’re successful, we’ve seen on more than one occasion a founder start up a business, get it off the ground, only to realize they have almost no interest in their new livelihood.
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 specialty, and it’s what your business will be known for.
For example, Foundr operates in the 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 for growing their business.
Choosing (and sticking with) a niche is crucial in today’s online marketplace for many reasons. First, competition is fierce. Your business is more likely to succeed if you specialize rather than offering a wide variety of goods and services. Second, loyalty and familiarity are highly valuable 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, picking a niche is good for your sanity and success as an entrepreneur. There’s an old saying, “The man who chases two rabbits catches neither.” Those who can focus and push for success within one niche are much more likely to reach it.
How to Choose a Niche
Niche options are endless, but that doesn’t mean you should simply pick the easiest, quickest, or most profitable. A lot of analysis needs to go into your choice, and unless it satisfies the majority of some predefined criteria, you run the risk of wasting serious time, money, and resources.
How can you go about choosing a niche? Start by asking yourself some questions. Be honest! You’re going to be pouring your heart and soul into this business, so don’t hold back or cut corners. Ideally, your answers will lay the foundation for your online venture.
Do you have a running list of some passions, skills, and hobbies? Great!
Evaluating Your Niche Ideas
Next, take each of your chosen niche topics 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 niche (or two!) that is brimming with potential for both passion and profitability. That’s the sweet spot!
Final Thoughts
Vetting all of your niche options involves a lot of research. But rushing through (or skipping) this step could mean wasted resources, and that’s something you probably can’t afford as an online entrepreneur.
If you’ve evaluated your viable niche options and aren’t discovering much market interest or income potential, don’t fret! There are plenty of niches out there to pursue. It’s a very common misconception that the key to a successful new business is to just “find that one idea.” Almost all entrepreneurs end up scrapping one or more ideas at some point and finding a new direction.
For example, if I discovered too much competition within the makeup physical products niche, I could consider becoming a freelance writer on the topic or perhaps selling online tutorial courses. The possibilities when creating an online business are endless!
Like we said above, the intersection of passion and profitability is where you want to be. It’s also important to ask yourself, “Can I create someone better or different than what’s out there?” If you’re interested in and excited by a niche that has market demand, viability, and uniqueness, you’ll be on your way to starting a successful online business.
When starting your online business, it’s important to build and promote a product or service that people will actually use and pay for. The process of validating your business idea through simple solution testing is called creating a minimal viable product (MVP).
Eric Ries, author and founder of the Lean Startup Movement, explains it this way: “The minimal viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”
The intricacy of your MVP depends on the product or service you’re building, and the types of MVPs can range from keyword tests to landing pages to early prototypes. The purpose of an MVP is not to test technical feasibility, but rather to see if your idea would solve a problem people would pay for.
The Purpose of an MVP
Why spend time and money on creating a minimal viable product? Well, there’s plenty of benefit that comes from testing your idea in a simple, inexpensive way.
You get answers before effort
Imagine if you created your product with 10 features that you simply assumed would be valuable to your customers. Then, you brought your product to market (without testing) and found that your customers only used and paid for two of those 10 features. You just wasted precious time and effort on eight offerings that provide no value or interest to your customers. When you build an MVP, you find out exactly what your customers desire before you put work into a polished product. You also get priceless feedback that could help you make future product or business decisions.
You save precious resources
Creating an online business takes a lot of resources, but you shouldn’t have to spend those resources until you’re absolutely sure your idea is solid. Building an MVP allows you to validate your idea before going to the trouble and expense of production, hiring, advertising, and other business-building investments.
You get to know your audience
Defining your target audience is critical when building a business. Your audience is the backbone of your marketing strategy, and without understanding their needs and problems, you’ll be marketing your product to, well, no one. Building an MVP allows you to gain valuable feedback as soon as possible. It also equips you to confidently author a marketing strategy that’ll connect with your audience.
You find your first customers
Ideally, your MVP will pave the way for many, many purchases. Those customers who show first interest are considered your early adopters and can become great resources as you grow and scale your company. Typically visionaries and trendsetters, early adopters can be your most loyal customers, as they see value in your business idea and will always provide strong feedback. Heck, they might even become future team members or investors.
Ideas For Your MVP
A minimal viable product is all about testing your hypothesis and validating your idea for market fit. An MVP will help you validate your business and have confidence moving into the marketplace. Here are a few simple, inexpensive, and efficient ways to build and test your MVP.
Create a landing page
Landing pages are the simplest and most straightforward way to test a business idea. And they’re easy, too! Simply put, this is a standalone website you can draw people to that has one solitary purpose, often to capture leads. With tools like Lander, Ucraft, or LeadPages, you can create a simple landing page for almost nothing.
On your page, include your best copy outlining the benefits of your product or service. Feature one clear call-to-action to prompt for emails and/or pre-orders. Share your landing page in forums, communities, and social media, and set up Google AdWords.
Creating a landing page for your business idea also gives you a behind-the-scenes look at your visitor’s online activity. And nothing speaks louder than a click-through. As you measure the results, look for at least a 5% conversion rate or a hundred “sales.” These numbers are a good sign of a validated idea.
Crowdfund
Fundraising sites like Kickstarter and Indiegogo provide new businesses a chance to test and validate their ideas by collecting pledges before having to create product. While designed as fundraising tools, these platforms are essentially collections of MVPs, where market interest is measured by consumer pledges.
Validating your idea through crowdfunding offers a few unique benefits. First, it can give you access to a group of highly interested and actively involved early adopters, who will have a stake in the success of your product. These folks can be valuable as you look to scale your business idea. Second, it allows you to measure and collect support before having to produce a single product. Since all funding happens on the front end, startups don’t have to begin production until (or unless) they meet their fundraising goals.
If crowdfunding sounds like a good fit for you, be sure that you’re prepared to create and pay for a variety of marketing materials. Successful campaigns typically involve compelling narratives and copy, effective demo videos, and compelling rewards that encourage support. But if you reach your crowdfunding goal, you can consider your idea validated.
Talk to people
Humans! They’re great. They can also provide feedback that goes deeper than a click-through and speaks louder than a crowdfund pledge. Talking to people is a fantastic way to validate your idea. It also challenges you to articulate your vision and learn how to pitch your business to someone who isn’t you (or your mirror).
One easy way to connect with others is by following the Google Usability Cafe model. It’s simple: Visit your nearest coffee shop, set up a simple workstation, and buy strangers coffee in exchange for their feedback on your business idea. Here are some questions you could ask:
These interviews can be a gold mine of actionable feedback, especially if some of your subjects fall into your target audience. But don’t be choosy about who you talk to. Gather feedback from anyone and everyone, and while you’re at it, start building an email list.
Another method of gathering live feedback is by (dun, dun, dun…) cold calling! Most entrepreneurs struggle with this step because rejection and humiliation can be scary. If you feel this way, you’re not alone! But, don’t let this fear get in the way of making a sale, or at least gathering valuable feedback.
A great tool to use while making sales calls is a sales sheet. In essence, this document is a simple letter explaining who you are, what you do, how much it costs, and how to get started. According to Gabe Arnold, who used this method to start his company Copywriter Today (check out his full process here), you should also include a few key points in your sales sheet:
Drafting a sales letter can also help you break the ice with potential customers. Use it to guide your phone calls or as a conversation piece if you’re visiting them in person. If you hate the dreaded cold call, consider using an introductory script. Arnold uses a simple script like this:
“Hi, my name is Gabe, and the reason that I’m calling you today is because I was wondering if you’d be able to give me some feedback on an that we’re launching for businesses like yours in the .”
Using the term “feedback” can help prompt constructive conversation and also relieve any pressure the customer may feel to make a purchase. No matter what, sales are an important part of starting your own business, so it’s important to learn how to overcome your fears and focus on serving your customers. Hearing the word “No” is simply part of the entrepreneurial journey.
If you receive overwhelming positive feedback (or possible sales!) from your calls, consider your business idea validated.
Building and testing an MVP takes work, but it’s worth it when starting an online business. Ensure that you’ve completed this step before moving on to the next chapter.
Congratulations! You’re ready to create a real, live business. There are many moving parts involved, and getting the ball rolling is often a major barrier for new entrepreneurs. So in this chapter, we’re going to walk through the steps to start your online business.
Name
Believe it or not, so many entrepreneurs find themselves completely stumped by this one seemingly simple step toward creating their online business. Either that, or they rush into using a terrible name, or a name that’s already taken, or one that’s too similar to another.
In the grand scheme of things, your business name may seem trivial. But that couldn’t be further from the truth. Your name will be searched, tagged, trademarked, typed, misspelled, and spoken aloud, so it needs to be good.
What do we mean by good? Start by considering your type of business. Are you an independent contractor, distributor, retailer, blogger, or subscription service? What phrases, words, or terms would resonate with your target audience? Remember that your business name will be the first impression you make on a majority of your consumers.
So you don’t spend too much time fretting over the perfect name, we’ve included some criteria below to help you start thinking of a solid moniker:
The best brand names are between five and 10 characters. This makes it easy on you when marketing and promoting, and on your consumers when searching and sharing.
Be unique
Most common names are taken if not trademarked. Getting quirky with spellings or alternate meanings could also increase your brand’s memorability. Take Foundr, for example. Using a common stylization (e.g. tumblr, Grindr), we took a widespread term and made it unique, while retaining the meaning.
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.
As you brainstorm, list a few possibilities. Like your niche ideas, it’s best to run them through a quick validation process to test their market fit:
Logo and Brand
For an online business, your identity must extend beyond a compelling name into a strong, recognizable brand. You won’t have a brick-and-mortar storefront or smiling employees to help you communicate authority, seriousness, and strength, so your brand must do that for you.
What do we mean by brand? We’re talking about your logo design, color palette, font choices, and all that visual jazz. Building these assets from the start is important as they will help bolster your advertising, create a more coherent website, social media, and ecommerce experience, and inspire beautiful packaging and paperwork (if your business calls for such).
Thankfully, this step doesn’t involve pricey agencies. As a small business, you can more than afford to build a great brand. Graphic design tools like Canva and Snappa can help out most novices. If you’re not design-savvy in the slightest, check out sites like 99Designs, Fiverr, or UpWork to hire a designer at an affordable rate.
Website
Thankfully, as online entrepreneurs, we don’t have to invest in expensive office space. But we still need an address where people can find us.
When it comes to setting up shop, your website will vary based on your type of business. If you’re an independent contractor offering design services, you may only require a landing page with a portfolio section. If you’re an online retailer, your website will most likely feature an abundance of pages with ecommerce capabilities. If you’re a blogger and want to profit from a curated community, you’ll require a site design that’s built for content.
Domain names
The first step to creating a website is securing a domain name. It’s important to choose a domain that’s either your exact business name or pretty close. You want your customers to find your website without a hitch, and your URL is the key.
Ideally, you would capture a .com URL with your exact business name, like “foundr.com.” If you can’t snag your exact name, try a small variation, like “foundrmag.com.” If you have to go with another URL, I would advise you not to change the spelling as that can be confusing (like Foundr vs. Founder). Instead, try adding on a second word that describes your product, like “mag,” “app,” or “shop.”
Thankfully, there are other URL extensions available besides .com. If you can’t get .com, try .co or .io, but only if your exact business name is available. Don’t make too many changes to your URL, or it’ll get lost in translation to your audience. Here’s a helpful list of different extensions and pricing.
You can purchase a domain independently through Hover or GoDaddy, or you can buy one as part of your website purchase on WordPress or Squarespace.
Hosting
Next, let’s talk about hosting. There are four main types of web hosting: Shared, Virtual Private Server (VPS), Dedicated, and Cloud Hosting. While these all provide storage for your web content, they differ in the amount of storage capacity, control, technical knowledge requirement, server speed, and reliability.
Shared hosting is a good place to start, despite its lack of server control and performance, as it’s inexpensive and easy to maintain. VPS hosting gives you root server access and a more secure environment but is more expensive. Dedicated hosting gives you the most server control, but is very pricey and requires IT knowledge.
If this is your first online business, a good rule of thumb is to start small with a shared hosting account. You can always upgrade to a VPS or dedicated hosting as you scale your business and website. We recommend WordPress or GoDaddy for hosting options.
Website
When creating your actual 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, start 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 while also providing tools for Ecommerce SEO, readability testing, content management, and various plugins.
If you’re an online retailer and will be conducting ecommerce activity through your website, there are many excellent platforms available. These range from from the cheap and easy options like Shopify through to the more advanced like Magento. Before deciding on a website service, consider things like how many pages you need or what merchant services provider you want to use. (If you’re not sure, Formstack offers an awesome resource comparing payment gateways worldwide.)
Social Media PresenceWe’ll say it again: Start with your audience. Where do they spend time online? What content resonates with them as consumers? What online communities are they active in?
Next, evaluate your business offering. What social media format best fits the content you want to share? For example, a blog may thrive with text on Twitter, whereas a fashion retailer may have better luck sharing photography on Pinterest or Instagram.
A good place to start on social media is the “big three”: Facebook, Twitter, and Instagram. From there, if you think you can provide valuable content and can connect with your audience, go ahead and create profiles on Pinterest and YouTube. We will talk about Instagram later.
Finally, evaluate your niche. There may be social networks that cater specifically to businesses and consumers in your industry. For example, a fashion ecommerce business with plenty of product images would surely do well on Instagram. For a business that offers professional resume-writing services, it would be worth creating a profile and sharing content on LinkedIn. A freelance designer would benefit from a profile on Behance or Dribbble, as those networks cater to graphic designers and artists.
Physical Presence
If your online business sells a physical product, you’ll need to figure out how your product(s) will be manufactured and distributed. It’s crucial to pin down a reliable affordable supplier than can scale as your business does.
Depending on the type of product you’re selling, start looking for manufacturers on Alibaba or GlobalSources. These databases provide the widest range of options for suppliers and manufacturers. They’re also the most cost-friendly.
You must also consider how your products will make it to your consumers’ doorsteps. There are a few different order fulfillment options, including drop-shopping, direct fulfillment, and 3PL. The right method for your business will depend on a variety of factors – what you’re selling, what you can afford, where your business is today, and how you’d like to scale.
Do your research before moving forward with any manufacturing or fulfillment decisions. Also, don’t be afraid to change your mind as your business grows and gets on its feet – there are plenty of options out there for businesses of every size.
More Online Tools
Depending on your type of business, you may need other tools to help you succeed.
Affiliate Marketing
In a previous chapter, we discussed affiliate marketing as a niche-evaluation strategy. Affiliate marketing is also a way to earn extra income by promoting other products and services.
Some of the popular affiliate networks include Amazon Associates, CJ Affiliate, and Google AdSense. With decent traffic, high-quality content, and a defined niche, your online business could make a good amount of passive income with affiliate marketing.
Analytics
Tracking and measuring activity and traffic of your online business is actually pretty easy, thanks to a wealth of services available, many for free, on the internet.
Keep an eye on your website’s stats by creating a Google Analytics account, free with a Google account. Your assigned Tracking ID will help you keep an eye on everything from real-time site activity to audience behavior to acquisition sources. This is one of the most important steps to starting an online business, as your analytics and audience will give you insight into marketing, design, copy, and ecommerce strategy.
Starting a business online involves many ongoing steps, but we’ve created this guide to help you navigate them, especially the first moves you’ll take. This chapter should equip you to create your business’s identity and online presence, as well as start connecting with your audience and industry partners.
You’ve got a niche, and you’ve created a solid product or service offering. You’ve created your business brand, set up your online store, and loaded it up with great content. You’ve launched your online business.
It’s time to sit back, relax, and watch the sales flood in, right? Not so much. The hard part of building an online business is hardly over, and now’s the time to dig your heels in and get to work.
Getting your first few (hundred) sales will be far from easy. But your effort won’t be in vain; taking strides to set up and market your online business from the start will help you continue to rake in sales into the far future.
Before you run out and drop thousands on paid media or pricey marketing agencies, let’s take a step back. We’ve collected a few inexpensive and effective strategies that you can implement right away to market your online business. As you scale, you’ll want to check out our Ultimate Startup Marketing Guide for more ideas.
Know Your Buyers
Before you even pick up a pencil to start building your marketing plan, ask yourself: Do I know the audience I’m marketing to? The answer to this question 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.
Although we recommend spending more than an afternoon at the whiteboard to conduct this research, we’ve compiled our best tips to defining your target audience. Start here, then dig deeper:
Next, take this information and apply it to your business decisions to ensure that your marketing is as impactful as possible. Every marketing strategy should hinge upon your audience to maximize your resources and ultimately get your first sale.
Connect on Social
Social media is a great place to come face-to-face with consumers and boost your brand awareness. But simply creating profiles is not enough. 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:
At its core, your social media profiles should tell a story – about your brand, your product, your team, or your mission. According to Gary Vaynerchuck’s Jab, Jab, Jab, Right Hook, your social media story should bring value to your consumers and fit in naturally with their path to purchase.
Don’t blast your followers with “Buy that!” or “Check this out!” Instead, post content that genuinely interests them. For example, Foundr’s Instagram is full of great quotes, entrepreneur features, and podcast highlights. Every once in a while Foundr will post about their products, but since they’ve already established so much trust and value with their posts, their followers will likely welcome the occasional “salesy” post.
If you want to learn and apply the exact strategies Foundr used to amass over two million followers on Instagram, check out our Instagram Domination course.
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.
Social media is also an excellent place to experiment with and invest in paid advertising. Facebook makes it incredibly simple to advertise on both their platform and Instagram – two networks on which your business should be active. For a small budget, you can get a piece of sponsored content in front of thousands.
We recommend creating a simple advertisement with your branding (and product information, if applicable) and boosting it for $10 or $20. This small investment can expose your brand to new audiences and help you gain you new likes, followers, and customers.
Exclusive FREE Instagram Masterclass:
In this Instagram masterclass, you will learn:
Build Your ListIt doesn’t matter if you’re selling services, software, physical products, or online courses — if you want to start a successful online business, you need to build an email list.
Despite the rise of social media marketing, email is not obsolete. In fact, it’s more powerful than ever before, generating more valuable leads than social media. You’ve got to use them together. Campaign Monitor estimates that for every dollar spent on email marketing, companies can expect an ROI of $38. Email marketing will very likely help you get your first sale.
You can leverage email to market your online business in a few ways. Start with building your list. Here’s how:
Building a quality email list happens slowly, so be patient as you create content and work your funnels. Because your email leads are more valuable than ones from social media, it’ll take you more time to build this list than garner a Facebook like or Instagram follow.
What email marketing platform should you use? This depends on your technical know-how and budget. For a new online business, we suggest MailChimp, which is free for under 2,000 subscribers. Also, there are some other free options for starters. As you scale, check out AWeber, ConvertKit, or Infusionsoft (we use Infusionsoft at Foundr and love it).
As you grow your email list, stay in touch with your subscribers. Beyond the requested content offers and introductory email, be sure to announce new product or service updates, share exciting sales or events, and release a routine email newsletter. Converting your email list leads into customers will only happen with consistent, useful content.
Let Your Content Do the Talking
Content marketing and inbound marketing have skyrocketed in effectiveness and popularity among online businesses. Creating exceptional content tells your audience that you want to educate, inform, and equip them as much (or more) than you want to sell to them. It also tells your story and draws in organic traffic. Great content builds trust and further establishes your brand’s authority.
Content marketing doesn’t have to be complicated. To dive into the world of content, just start a blog for your online business. This will give you a platform to share articles and announcements that resonate with your audience. Using your blog as an MVP, you’ll be able to determine what topics are performing best based on traffic. This will inspire ideas for evergreen content, guides, infographics, and videos.
But don’t feel intimidated by the crowded world of content marketing. When you’re starting out especially, just be authentic. It doesn’t have to be perfect or highly polished. Show that there are real people behind your brand.
Creating content around your brand also helps populate your social media feeds and entice email opt-ins. Drumming up ideas for social media posts and lead offers can be tough. Even creating a few exceptional content resources can inspire many social media posts and serve to collect hundreds of emails.
These are just a few ideas to market your online business and get your first sale, on your own and on a bootstrapped budget. These tactics take time, but ultimately pay off (literally) and support each other. For example, an active social media account is a great way to promote a content offer that encourages email opt in … and so on, and so forth. There are countless other ways to market your business, and our Ultimate Marketing Startup Strategy Guide offers some more great marketing advice.
Welcome to the end of the line—well, really just the end of this guide, but more importantly, the beginning of your journey toward building a successful online business.
Entrepreneurship is hard work, but you’ve got what it takes: You made it through the entire guide, for starters. You’re getting to work on implementing everything you’ve learned. You’ll have ups and downs and good days and bad days. And one day, you’ll be well-established, bringing in regular revenue, and looking back on these early days with a smile. You might even be on the cover of Foundr Magazine!
To help you get to that point, we’re rounding out this guide with a few principles that are crucial for a successful online business.
Embrace a Growth Mindset
So many things in life and business are beyond your control. One thing you have some influence over, though, is your mindset.
As you work to build a successful online business, one fact is absolutely certain: Along the way, and this is 100% guaranteed, you will face barriers and blockades, trials and tribulations, struggles and setbacks. It’s just true. Even if you’re the next Richard Branson—hell, especially if you’re the next Richard Branson.
You can’t control that. What you can control, at least to some extent, is the mindset you adopt in response to that reality.
Enter Carol Dweck, a psychology professor at Stanford University. Her whole deal is researching people’s self-conceptions, and she argues that attitudes towards achievement and success fall on a spectrum: On one end, your mindset can be very “fixed.” On the other end stands a “growth” mindset.
Everyone’s got a bit of both. Ideally, though, you want to shift your thinking toward growth:
Fixed mindset
Belief that your abilities are ingrained from a young age, that you can’t do much to level up your talents. As a result, you fear failure because it says something negative about you and your capacities.
Growth mindset
Understanding that you can develop your skills, and reach success, by working hard, working smart, and taking feedback. As a result, you get that failure is fine, since it’s just another chance to learn and grow.
A growth mindset is the only way to deal effectively, and healthily, with the inevitable hurdles of starting an online business. Because you know that hardship is just an opportunity for growth, one stop on your way to success, you can remember that those moments of “oh shit!” are OK.
That’s the basic idea, and it’s easy. But actually embracing it, like, for real? Harder. Still, you can read about misconceptions surrounding the growth mindset and ways to actually adopt the approach. A growth mindset can put you on the path to profit.
Take Care of Yourself
When talking entrepreneurship, people love to shout about “the hustle.” And yeah, starting a business is a ton of work. It won’t always be fun, and you’ll definitely have to make sacrifices.
But you never have to sacrifice your health, physical or mental. It’s just not worth it, because you are worth more than any business ever will be. You’re starting a business to make your life better, and it’s important to always have that overarching goal in mind.
Besides, trading your health for success won’t even work. It’s a terrible strategy, because if you want to take care of your business, you first have to take care of yourself. Productivity expert Chris Bailey put it well in a 2014 interview with Foundr: “The boring things that seem so cliché are the things that are going to make you the most productive. Like exercising, like eating well, like meditating.”
We’ve got some great content to help with these and other health items:
The race to a successful online business is a marathon, not a sprint. Pace yourself.
Protect Your TimeClichés are bad but, I’m sorry, time is money. Successful online businesses are made of so many moving parts, and making sure that everything aligns just perfectly to pull in some profit takes time.
Especially when you’re first starting out, your amount of available time is going to be one of the major factors limiting your success. New entrepreneurs constantly find themselves pulling their hair out and screaming, “If only I had more time!”
Well, here’s the thing: You do. Think about it. Think about all of the time you spend each day on things that aren’t work, on activities that don’t align with your goals. Add up all the time you spend mindlessly scrolling through your phone. That’s a lot of time.
Sure, some of that is fine. Your brain does need to take breaks. But if you’re not being strategic and realistic about those breaks, you’re wasting hours, willingly giving away the time you wish you had.
You don’t need to rely on willpower alone, because there are programs that can ease your worries around time management and focus. Smartphone zapping time? There’s an app for that. Web browsing gone off the rails? SelfControl is great for Mac, and Windows has some good options too.
Connect With Mentors
Everyone trying to start an online business should seek out a mentor (or two). Speaking with someone who has traveled the path you’re taking is invaluable. They can help you avoid mistakes, set goals, and stay inspired.
You might find mentors within your existing network, through friends, at networking events, or on social media.
But successful entrepreneurs are busy. You’ll have to prove that you’re serious, show that you’re respectful of their time, and offer to help them in some way.
For more on this, read our blog post on the subject and check out our free ebook, The Ultimate Step-By-Step Guide on How To Find A Mentor.
Center the Customer
What makes a successful online business? Profit. That’s the common answer, and it’s true.
But it’s not the real story. To get at that, you have to ask where profit comes from. Where? Customers. To profit, you must serve your customers. That means respect.
People don’t like being treated as nothing more than potential revenue, so don’t treat them like that. You’re here to make money, sure, but don’t let that get in the way of being a good person.
But there’s a revenue lesson here, too. Think about your product or service from the buyer’s perspective. Brainstorm ways that you can enhance the customer experience, and you’ll be well on your way to both happier customers and more money.
Keep Going — Never Give Up
Think of this as the conclusion. It’s our final tip: Don’t give up.
Foundr is in your corner. We’ve even got a Facebook group — one that’s 100% free! — to give you the support you need to grow as an entrepreneur. We exist because new entrepreneurs like you deserve resources that really help, advice that actually sticks. We do what we do because we know that you can succeed.
We also know it’s not easy. Some people will face more barriers than others. Everyone will fumble and bumble and stumble along the way. But “failure” is just another word for “Hey, I learned something!” The only way you can truly fail at starting your own online business is to give up.
You can always read up on new strategies. You can always pivot your product. You can always try a new idea. You can always take a break for your mental health and then get back to it.
You can always find a path to success.
Maybe you’ll try for a long time. Maybe you’ll try different ideas. Whatever it takes, however long it takes, just remember to focus on what matters: Do something you love. Bear hug that growth mindset. Learn constantly, think critically, and keep on going and going and going.
You’ll get there.
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