How To Start An Online Business With Little Money is a very important question and in this post, you will get the right answer. This post will not be a post that lists types of online businesses to start or run, rather you will learn the mindset behind online businesses, the types and classification and what you need to do in terms of investments to get the ball rolling.
This is zero-bullshit article so be ready for some real talk! I jokingly said “How To Start An Online Business is one of the most searched terms on google after searches related to sex and how to last longer in bed”, even though that sounds funny – its somewhat true. Being someone who talks about entrepreneurship on my blog, social platforms and videos, a lot of people ask me questions related to how to start an online business with close to zero capital or experience. Being a very observant person, I have noticed that a large percentage of them are looking for a “system” or “program” that can be implemented easily with zero or no capital and skill or prior experience and knowledge.
Out of the gate, there is no such thing as that! If you are looking to start an online business because you’ve been told it’s the easy way out, you need to think twice. Unlike most articles and information around how to start an online business and types to start, this one will be different because I do not intend to rub your back with sweet stories of how you can sit on the beach side whilst money is flowing into your bank account or how you can spend 1hour everyday on your online business and make a living off it – this post will very real, truthful and straight to the point.
True Definition of An Online Business.
In my video about “How To Start An Online Business”, I defined an online business as a business where the delivery of your product or service is dependent upon the internet and your computer or smartphone. If you look closely at the definition, there are some keywords in it “Product or Service” and “The Internet and A Computer”. Before you continue reading this post on how to start an online business with little money, I recommend you watch the video below as it will give you some more insight and prepare you for the information below.
Most resources online around how to start an online business always go with stuffs like; Find a need, fill the need, Create a website, use SEO to drive traffic to your website, build an email list and start making money! Even though some of those things are true, its not that simple. There is a need to make a decision on what type of online business best suits your current circumstance.
Types of Online Businesses To Start.
Even though the things I’ll talk about in this paragraph are very simple, they are most times overlooked as though they are not important. Before deciding to start an online business especially when you don’t have a lot of money to spend or invest, it is very important to understand the 2 types of online businesses there are in order to choose which one suits you the most.
(1) Service Based Online Business;
A service based business is one where your “product” is not physical, its digitally delivered and you get paid for it. This type of online business is cheaper to start and in some cases requires little or no money. How it works is this; Your product or service adds value to people in different ways and they pay you money in return for the value they get.
As said earlier, this type of online business is the one to go into because there’s no need to invest in creating a real physical product product (which can take time and require capital), buying a product or storing the product..this means that no physical assets are needed! Also, it is somewhat always cheaper to start. To run a service based online business, you need to have a SKILL. Skill can vary from different things but one thing the skill must do is – solve a problem.
The bigger or more painful the problem, the more the skill is worth. Most people already have skills and talents either from what they’ve learnt from school, from their peers or some skill they learnt online. If you are someone like this, you are lucky because that right there is your investment. If you do not have any valuable skill yet that people will be willing to pay for, don’t worry, Google, blogs, YouTube and online courses have made the learning and acquiring of top notch valuable skills very accessible, affordable and sometimes even FREE.
To run a service based business, you need to have some type of SKILL.
Types of “Service Based Online Businesses” To Start.
(a) Platform Provider.
By “platform provider”, I mean you would create a website or an app which will become a platform that people find useful and then you monetize that platform. In order to do this, you need to either be skilled with design / development skill in order to create the platform (example: Mark Zuckerberg developed Facebook) or you can sweet-talk your programmer friend(s) to create the platform for you and you guys become co-owners of the platform (UBER was not developed by the famous ex CEO – Travis Kalanick, his friends did) or you can pay developers to create the platform for you and you keep 100% ownership .
You can find programmers from websites like Fiverr.com , I have been able to build personal relationships with designers and programmers on Fiverr and I suggest you do the same. Their prices are lower than the traditional developer and majority of them are open to partnerships (which means you can offer them equity in your new platform idea without having to pay any money upfront for their service) Another form of providing a platform can be owning a Blog where you create valuable content that people read, enjoy and share.
To monetize a blog, you would need to have a good amount of visitors, have third party advertisement installed on the blog such as Google Ads and the likes, sell some type of product (whether digital or physical that your followers / readers will be interested in), promote affiliate offers related to what you blog about, or sell ad space on your website when its big enough for that! For a platform to become a successful one, it needs to be something that people will love, enjoy and find valuable enough to join and also share with their friends! Why owning a “platform” is good is because you do not need to exchange your time for money.
Once the platform has been created and everything is well structured, you can spend as little as an hour per day just monitoring the platform and ensuring everything is in place whilst coming up with up with new ideas to make it better.
(b) Service / Skill Provider.
My favorite way to start an online business with little money is to provide a service with skill(s) already acquired. As a service provider, your skill, knowledge and expertise is your unique selling point and you will get paid for this. You will be exchanging your time for money but in a much better way because you get to work from wherever you want, you get to pick the times you want to work and you are not limited to one client per time, you can have 10 clients at the same time waiting for you to deliver their work, you just have to know how to structure your time. In order to go into this type of online business, there is a need to learn a skill!
You cannot provide a service without having more knowledge in that field than who you are trying to charge to deliver it to. Skill acquisition is key here. This is actually a very interesting online business to go into because you can and should learn more than one skill closely or somewhat related to your main skill so you can have multiple streams of income.
For example, my main skill is Web Design. My complementing skills are Graphics Design, Video Editing, Copywriting, Content Creation, Digital Marketing Consultant, Search Engine Optimization and more! All these skills are somewhat related to Web Design and I can provide them as individual services to people who need them or as a package for people who need more than just one of them at the same time.
Examples of Service / Skill Provider Online Businesses;
- Website Design; businesses whether new or old will always be in need of a good online presence.
- Graphics Design; a brand identity is what sets a business apart, graphics designers create designs that spreads the word about a business or entity in a unique and fun way.
- Social Media Marketing; the need for businesses to stay relevant and active on social media whilst also reaching new and old customers has opened doors for people who know how to work social media to make money doing so for businesses and individuals.
- Search Engine Optimization Expert; after a website is done, it doesn’t stop there. As someone skilled with SEO tactics and knowledge, you will be able to help businesses bring in more visitors to their website and ultimately increase their revenue and sales.
- Email Marketing Expert; from composing wining emails to tracking the result of an email campaign – an email marketing expert takes control of the emails a business sends and can advice on what to do to increase open rate, click-throughs and more!
- Coaching & Mentorship; after learning and perfecting your skills and building something for yourself, you can teach others how to do the same and by doing so – you make money being a coach or mentor. This can be done through eBooks, Online Courses, Webinars, Video or Voice Calls.
- Video Editing; as video is becoming the number one way people are consuming content on and off social media, being able to create and edit videos fast and clean is an important skill to have.
All these services listed above requires prior knowledge and training in the field. For example, to make money designing websites, you need to learn how to design websites. To start designing Logos, flyers, business cards and other graphic related projects – you will need to learn graphics design. [ad name=”HTML”]
In order to start a website, app or platform that will become successful through monetization, the idea of the project needs to be solid! You do not need to have a monetization plan from the beginning (even though its always a good idea) but the project should be one that people will be excited and interested to sign up for! Your investment can be your time and expertise in creating the platform, or the money you pay a developer to create the platform for you and if you are lucky to have friends who have agreed to work on it for you – good for you, you don’t need any investment…just yet!
To become a skill / service provider, your investment would be to acquire the necessary skill in whatever field you fancy the most or is currently a highly needed skill. You can choose to learn from Youtube (I don’t recommend this fully though because Youtube videos are not created to tackle the whole issue, they are created in bits), you can learn from an online course from someone who knows what they are talking about (you can easily tell from the curriculum of their course) or you can learn from someone in person. 9 out of 10 times, I will recommend learning online through a course or well structured tutorials because you are able to learn at your own pace, at your time and go back if you missed something.
Do not be one of those people who look for FREE information and stuffs around something you intend to make money with, if you really want to learn a skill – pay the price once and use that skill and knowledge to make a living for yourself. If acquiring Web & Graphics design skills is something that interests you, you should consider enrolling on my Online course that will teach and empower you with the skills to become a skilled and well paid Creative designer.
The course is called The Puzzle Hustle, the reason for naming it “The Puzzle Hustle” is because over my 5 years of being a Creative designer for my company Presidential Ideas, I have learnt and seen that – designing websites or graphics is not a as hard as people make it to be, its like a ‘Puzzle’, it’s all about putting things together to achieve a final picture. Link to my course. + it’s super affordable.
(2) Product Based Online Business;
For the sake of confusion, “product” here implies “Physical Product”. This type of business requires the delivery of a physical product to a buyer and you making money from the sale of that product or products! This type of business requires having an e-commerce website with your products listed and a good payment gateways that allows your customers to checkout easily. There are two ways about this, you can either sell your own made products or you sell someone’s product! In order to sell your own product, your product needs to be one with an audience willing to buy and you have to some type of capital on ground to actually create the products. Compared to service based businesses, Product based businesses are somewhat more expensive to start.
Types of “Product Based Online Businesses” To Start:
(a) Own Made Products;
To achieve this, you should do market research and be sure that your product is something someone would be willing to give their hard earned money in exchange for before you start manufacturing a lot of it except you are a very seasoned marketer who’s able to make people want and need something they never thought they needed.
(b) Drop-shipping or Affiliate Marketing;
This type of product based business does not require you to create or manufacture your own product. You can sell products that has already been created and all you do is put the product in the front of the right people, make the sale and get the profit or commission from the sale.
To run a drop-shipping business, you will need to have a website where people can by the products from. For example if the main source of the product is $7, as a drop-shipper, you can sell the product for $24 and make a profit of $17 with no risk since the product has already been created. Most drop-shippers rely on overseas websites such as Aliexpress or Alibaba as their source since their products are always relatively cheaper than any other source. It will amaze you to know that a large percentage of products sold on Amazon, comes from Alibaba and Aliexpress.
As an affiliate marketer, its not compulsory you have a website, you can simply apply to websites that sells products, register as an affiliate, get a unique URL for the products you will like to sell – give people the link and when they buy, you will get a commission from the sale as high as 50%. Quick example, if my products costs £100 and I offer 40% commission to affiliates, if someone buys my product by following an affiliate’s link, he/she will make £40.
The best way to make an affiliate marketing business work is to have a website / blog around a topic or niche, then register for affiliate programmes that are in line with your niche so it feels congruent to your readers.
Product based online business would require finding the right product that will sell. If you are creating your own product – you would need money to get materials needed to manufacture the product, build and design a website that accepts payments and lists your products.
(I would cross this off my list if I was you, except the product creation doesn’t require a lot of capital) If you intend to dropship products, you would need to find a supplier with products that you know can sell (from research) and then you create a website to list those products with your own added profits. If you choose to go the affiliate route, you will need to find products from vendors that offer good affiliate commissions whose setup is also quick and seamless.
Your investment for this would be time researching vendors who offer good affiliate commissions, understanding and learning smart ways and places to place your links so people who are interested can buy and you get cut from sales made. If you want to host your website, blog or e-commerce platform, I recommend using SiteGround – they are the leading and #1 Web hosting whose prices are super affordable compared to the other players. Use this link to cheap hosting to get your business online without breaking the bank!
What No One Else Talks About.
Regardless of the type of online business you intend to go into, whether service or product based, YOU NEED TO UNDERSTAND THAT NO ONE WILL BUY FROM YOU UNLESS YOU PUT YOURSELF or PRODUCT IN FRONT OF THE RIGHT AUDIENCE. You can be the best website designer in the world or have the best products since sliced bread, if you do not know how to properly market yourself and products online – your online business will fail because you will not make a penny!
This is the number one reason why online businesses fail! Traffic, not just ordinary traffic but “targeted traffic” Putting your products, services or content in front of the right people some time takes monetary / time investment and even good networking skills to get it popping. You should read my new article on marketing Shotgun vs Sniper Marketing Approach (Which One Is Right For Your Business?) to learn more about how to properly market and promote your business. Rounding up, I hope this post was eye-opening on how to practically start an online business with little money.
I didn’t want to make this another post that lists 30 or 60 online businesses to start but rather make it a post that aims to give you the aha moment and open your mind to the underlying framework and principle behind online businesses.