Let me get straight to the point. These are the 3 questions you MUST answer before starting an online business if you want it to be successful.
Of course, it’s totally your choice. You could answer just two of them. You could answer just one of them. You could even ignore all three of them and continue on blindly based on hope and faith.
However, unless you can answer all three of them, the likelihood of you building a successful online business is pretty low. In fact, you may have already sealed your failure.
If you can’t come up with a satisfactory answer for all three questions, I strongly suggest holding off starting your business until you can. It may turn out that you need to abandon that particular business idea completely and think of something else.
Alternatively, it may turn out that a bit more planning is all that’s needed. Either way, you’ll save yourself the money and stress of pursuing an idea that was flawed from the start.
So, before we get to the questions themselves, let’s get started with a little explanation…
What is an Online Business?
An online business is any business where the primary service or transaction happens online. To put it simply, you’re earning money for doing something on the internet.
In many cases, an online business is based around a website that you own and create. It’s the place where you sell your products or services. However, many people have online businesses without having their own website. These could be eBay and Amazon sellers, or people who offer services on Fiverr.
The questions and answers in this article apply to all those cases though, and I’ll explain in each specific answer how it can affect these different types of businesses.
So, on to the first question…
Question 1: How are people going to find my online business?
The first two questions here are interchangeable with regards to the order in which you answer them. Depending on what your idea for an online business is, you may be able to answer Question 1, but not Question 2. Or, you may be able to answer Question 2, but not Question 1. The order doesn’t matter too much, as long as you can answer both of them in a satisfactory way.
“If you build it, they will come!”
Nope! The use of that quote is a cliche in the internet marketing world now, but I’m going to use it anyway.
If you’re starting an online business of any kind, you need to think about how potential customers or clients will find you. In other words, how will you get traffic for your business?
If you own your own website, traffic could be from free sources such as social media or search engines. It could also be from paid sources such as advertising.
Social media can also be a source of free traffic if your business is based on someone else’s site, such as Amazon.
Paid traffic sources such as AdWords ads will also work for both your own website, or a business based on a third-party site.
Getting free traffic from search engines, known as organic traffic, can be a bit harder if your business isn’t based on your own website though.
If your plan is to start an Amazon FBA business (Fulfilled By Amazon), you’re not going to have much control over how your product page appears to Google. You’ll be able to edit some meta data such as title and description, but that’s all.
The same is true of organic traffic that comes from Amazon’s own search function. You may think that Amazon has so many millions of visitors that you can just sit back and wait for them to find your product. Well, along with those millions of visitors, there’s also a lot of competition from other products.
This is true of any “marketplace” site, whether it be Amazon, Fiverr, Etsy, eBay, Spreadshirt, or any other. You can’t just add your product on the site and hope that people will find it. You need to make your own efforts to send people directly to your product pages.
The most direct way to do this would be via social media posts or paid ads. However, you could also set up your own website that links to your products. Writing blogs related to your products would then help to get some organic search engine traffic.
Either way, before you start your online business, you need to have figured out how you’re actually going to get traffic to your product or service pages. After all…
NO TRAFFIC = NO SALES = NO INCOME = NO BUSINESS
If you plan on using organic search engine traffic as a part of your business, I strongly suggest doing some keyword research right now. This will help you determine how viable this will be for business. It may also even help with name ideas for your business or domain.
You can find out more in this article:
Question 2: How am I going to monetise my web traffic?
You can now see why I said that you can answer Questions 1 and 2 in either order depending on what your business idea is.
When we looked at Question 1, we assumed that you already know what your sellable product or service is, so the focus is on getting traffic to it.
With Question 2 here, we assume that you don’t yet have a clear sellable product. Perhaps your idea for an online business is a travel blog that will attract lots of traffic, but you don’t know how you’ll make money off that.
NO SALES = NO INCOME = NO BUSINESS
This question also applies to those people who want their online business to be a YouTube channel. Making videos and uploading them to YouTube is fine, but if they’re not earning you money then it’s not a business, it’s a hobby.
If you have an idea for an information-based website or blog, but don’t have a product to sell then adding AdSense ads to your site is a quick and relatively easy way to get some money coming in. However, you need a huge amount of traffic to make any significant income from AdSense nowadays.
Besides, it can be risky to base your entire online business on AdSense ads. That’s a mistake that many people made about 15 years ago when AdSense first started. Some of them learnt a painful lesson when Google took exception to something they were doing with their site and banned them from the AdSense program, destroying their business overnight.
I’m pleased to say that I’ve never been banned from AdSense, but complying with the ever-changing rules can sometimes be difficult. Also, earnings have dropped over the past 15 years since I first signed up.
Nowadays, I don’t view AdSense ads as a primary income stream. The ads can bring in some extra cash, but can also distract visitors from your own higher value products.
There are entire articles about how to create products to monetise your web traffic and turn it into an online business, but a few quick ideas are:
- An ebook or course that compliments your website content
- T-shirts or other merchandise that fits your theme
- A one-on-one coaching or mentoring service
- Affiliate links to other people’s products
There are many ways to monetise website traffic, so make sure that you think of a good one. Otherwsie, you’ll waste valuable time and money on an online hobby rather than an online business.
If you’d like a crash course on how to make money from selling affiliate products, check out this article:
Question 3: Is my online business scalable?
One of the major downsides of a 9-to-5 day job is that it’s very hard to ever increase your income. When you’re young, you might see your income step up significantly a few times as you become more qualified and experienced. Unfortunately, you then reach a point in your life where you sort of fall into and income rut. You don’t want that to happen with your online business.
One of the best things about running your own business is that nobody is imposing any earning limits upon you. Technically, the sky’s the limit if you make your online business scalable.
So, what is meant by scalable? Well, let’s take that 9-to-5 day job as an example.
If you’re paid a yearly salary with no additional overtime pay then your job isn’t scalable at all. It doesn’t matter if you work 100 hours a week, you’ll still earn the same. Sure, your salary may increase a bit every year, but you have no direct control over that.
If you’re paid an hourly wage with overtime pay then your job is slightly scalable. You could work 100 hours a week and earn 60 hour’s overtime pay, so you do have some opportunity to scale your income up.
However, there are often regulations about how many hours per week you can work. In addition, there’s a limit to how many hours of work your body can physically and mentally cope with before breaking down.
With your online business, you have a lot more options for scaling it up.
If you’re selling a product, you have three options:
- Increase the traffic and hopefully the number of sales
- Raise the product price
- Increase the number of products you sell
You can also do all three of the above.
If your online business is based around you being personally involved, such as one-on-one coaching, you’re going to be limited by your own time. So, your options are really:
- Raise the price
- Hire extra people to help you
For this reason, I’ve always avoided service-based online businesses unless I can automate the service.
Your feelings may differ though. You may find that people are prepared to pay enough for your service so that you don’t need to scale up. You can earn a comfortable income by just working with a few clients each week.
How you approach the issue of business scalability is really up to you. If you just want your online business to be a side hustle then growth might not be that important. However, the day might come when you’re enjoying your side hustle more than your day job and want to grow it into a full-time income provider.
Okay, I’m starting an online business the successful way!
If you’ve answered all the questions above, and you’re happy with your answers, then starting an online business should be your next step.
Just remember that a big part of running your own business is adapting. Don’t be afraid to ask yourself these questions again in six months or a year’s time if you need to re-evaluate your idea.
Good luck and success to you!