page title icon Why Start an Online Business?

In today’s world, the internet is a prominent place for information, services, and products. When it comes to online businesses, the sky’s the limit. There’s no end to the innovative, vast array of companies to meet all needs and niches, so why not start thinking about an online business you could create?

If you’ve already begun to think about starting an online business, you may have a few ideas. Reasons for starting an online business include low startup cost, freedom to manage your own time, and the ability to work from anywhere with the potential for unlimited passive income.

Read on to learn more about online businesses, including its background, benefits, and how you can maximize it.

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Background on Online Businesses

Today, almost any business you can think of offers an online presence. The internet brings us unlimited information and the ability to find almost anything we need. Whether a tiny mom-and-pop shop or a large organization, you can find them online. Whether you’re using a small smartphone or a big desktop computer, you can find businesses online.

The History Cooperative says about internet business, “It’s exciting to see that this entirely new system of doing business only came into existence a few decades ago. It’s amazing to see how far it’s come, and even more exciting to speculate how it will advance in the future.”

Common Types of Online Businesses

According to Business News Daily, here are some online business ideas that are relatively common, and you could start up in a reasonably quick timeframe: 

  • Consulting (social media, small business, startups, search engine optimization, etc.)
  • e-Commerce retailer in a niche market
  • Web designer or developer
  • Blogger
  • Virtual assistant
  • Affiliate marketer
  • Remote tech support
  • Handmade craft seller
  • App developer
  • Tutoring
  • Drop shipping
  • Digital courses (on any area of expertise)
  • YouTube channel
  • Skype coaching
  • Podcast network
  • Writer (technical, resumes/cover letters, etc.)

Benefits of Starting an Online Business

Here’s where things get good. If you need a few great reasons to take the plunge and get started building an online business, we have a lot of them for you. 

Here are a few of the top benefits:

Endless Opportunities

If you can think of a way to connect with people and fill some sort of need, you can have an online business. The internet gives you a platform to reach countless individuals, and if you are offering something they want or need, they will find you.

Click here for a free ebook to start an online business today

Whether you’re ready to sell tiny tinsel tambourines or start a service that offers candid candy-making consulting, the opportunity for your new online business awaits you.

Low Startup Cost

While there’s always more than one way to do something, if a low startup cost is an essential factor in considering a new online business, you can make it happen. Many people start an online business for under $200 for the year.

The critical pieces are securing a domain name and hosting service, which you can complete for under a couple of hundred dollars. A website may then be built for free on your own, or you can choose to build something more complex or with the assistance of a professional.

Depending on your budget, additional startup basics could include professional brand development, website theme, an email service to stay in touch with customers, and possible advertising promotions to raise awareness about your new business.

Passive Income

You’re not going to make an impressive hourly wage starting an online business (okay, let’s be honest, you’re not going to make an hourly wage when you make your own online company). The income you’ll see from the service or product you offer will eventually come.

In fact, that’s a key point in online businesses. It’s not about the hours worked. Instead, you put in the time to set it up with systems in place that do the work for you and generate income. It’ll often become a passive income that doesn’t require your real-time effort and attention to make money. It’s not going to happen immediately, and there will be a learning curve, but it will come.

Not Limited to One Location

Do you know the old adage, “location, location, location”? Well, disregard it. This doesn’t apply in an online business venture. You don’t have to be in the big city to do business consulting. You don’t have to be in Hawaii to teach luau dancing, and you certainly don’t need to be planted in a chair at a desk in the office to balance the books for your business. But you can!

Basically, if you have a computer and internet connection, you can tend to your online business from wherever you are and follow your heart. You’re not limited to one location or another, and if it’s one spot one day and you’re in the neighboring state the next, that’s okay too.

Click here for a free ebook to start an online business today

You Own Your Time

When you start an online business, your time is your own. No boss tells you when you must start for the day, and no project manager is giving you a deadline to meet.

You’ll get as much as you put in, but if your timeline allows you to work hard from 9 PM to midnight instead of 8 AM to 5 PM like the typical working world, then so be it.

The beauty of an online business is that people around the world can access it (and learn from it, buy from it, sign up for it, etc.) at all hours of the day and night. Once you build it, it runs itself to some degree, with hours that are open 24/7 as your customer base grows.

Best of all, depending on how your online business is set up, you can almost always build it to suit your time needs and preferences. You can ensure your precious time is spent on things that matter to you. This probably will include your online business, but it should allow for time spent on other passions, people, or things you love, too.

Growth Potential

Once you get your online business going, the growth potential is unlimited. Once it picks up, growth can happen so exponentially that you might surprise yourself.

We’ve said it already, but it’s worth repeating: you can reach a whole lot of people through the internet. Your potential audience is literally the global population who has internet access, so you, as one individual, can leverage this power to benefit your business and offer your product or service to many.

Careful planning, consistent dedication, and follow-through are essential as you grow your online business. Thanks to a number of current technologies that exist today, you can accelerate the work you put in with these automated technological partners that save you time and money.

You can make your website responsive, implement smart user experience techniques, create a rich mobile app, execute online marketing tools, and more.

Lucrative Exit of the Business

While many local brick and mortar business owners are successful at selling their business when the time comes for them to move on, they’re limited in potential buyers.

Owning an online business means you take the time to build it, grow it, and make it successful. You keep it and stick with it as long as it makes sense for you. When you’re ready to sell your online business and move on to retirement or something else, your potential business buyers are almost limitless.

Click here for a free ebook to start an online business today

The market for buying and selling online businesses is enormous since the new owner could be anyone located anywhere with an internet connection. According to Business2Community, there are countless buyers and investors out there eager to find quality online businesses to acquire.

If you think selling a business is only something that happens for large conglomerate corporations, think again. There is a market and a high demand for smaller online businesses in the price range of $10,000 and up.

When the time comes that you think about selling your online business, there are brokers who specialize in helping online business owners find a buyer. You might look into companies like FE International, Upward Exits, or Empire Flippers, to name a few.

What You Don’t Have to Deal With When You Start Your Own Online Business

While the benefits are real and plentiful, they also come in the form of what you don’t have to deal with. A lack of these things sweetens the experience of starting an online business

With your own online business, you will not have any:

  • Commute
  • Boss
  • Work uniform
  • Mandatory meetings called by someone other than yourself
  • New employee orientation sessions
  • Water cooler chit chat that robs you of productivity
  • Office, storefront, or business venue rent payments
  • Closures due to a nationwide pandemic

How to Start an Online Business

Whether you’re still daydreaming about your online business or ready to start with step one, here are the basic steps to get going in starting an online business:

Plan Out Your Product or Service

Is it something people want or need? Something useful? Something that will help people or they’ll pay money or? Great!

Speak with an attorney, trusted financial advisor, or accountant to get all your ducks in a row legally and financially before jumping in.

Get Set Up With an Online Presence

Here are the things you need:

  • Website hosting (think of this as paying rent for the website space on the world wide web)
  • A domain name (pick something that represents your business well and is easy to remember and type)
  • A website (it doesn’t need to be fancy, but it needs to be current and easy to navigate with the necessary functions)

If you want to go dirt cheap for startup costs and do-it-yourself for the legwork, we have you covered.

Jeff Goins, a writer with a successful online business Goins Writer, suggests identifying a company that will provide web hosting, a domain name, and website building software bundled into one monthly or annual price. BlueHost is one such company that charges about $5 per month for website hosting and includes the domain name and website building software for free.

With these three key pieces in place, you’ll build a solid foundation at a rock bottom cost for the whole first year.

Click here for a free ebook to start an online business today

Add a Few Additional Capabilities to Your Website

Depending on your business, you may want to add a few additional capabilities to your website. Consider adding the following:

You could add many more services and capabilities to your website as you see fit to further enhance your startup. You may also consider consulting with a professional for some of these services or extras to maximize your business launch.

Communicate With Your Online Customers

As your brand grows and more people learn about your online business, they will appreciate hearing from you. An email marketing company like MailChimp or Sender will cost you $0 and is a great way to stay in touch. ThemeiIsle shares some other top email marketing companies to consider. 

Beyond staying in touch with customers and potential customers, email marketing communications can turn would-be customers into customers and entice people to learn more about your company. It’ll help grow your business and attract new customers.

Possible Drawbacks and Pitfalls of Having an Online Business

Despite your best efforts to plan, launch, build, and grow a new online business, you will undoubtedly encounter some hiccups along the way. Most drawbacks and pitfalls are learning opportunities that you can adjust to and overcome.

Here are a few you should know about and try to avoid when possible:

Poor Planning

No one said you need a formal, elaborate business plan to build an online business, but you do need some semblance of a plan. says the number one mistake to avoid when starting an online business is not having a plan of attack.

The planning basics need to cover who your customers are, what they need, and what people will pay for such a product or service.

Sujan Patel, who is the founder of several SaaS startups and currently VP of marketing at the software company When I Work, says, “You don’t need a formal 20-page business plan to successfully plan a business. You need to know who your customers are, what you are selling, and what people are willing to pay for your product or service.”

Tim Berry, chairman of Palo Alto Software and author of The Plan-As-You-Go Business Plan, says, “People regard the business plan as homework they don’t want to do, but planning helps me — whatever my success is.

Less Than Stellar Customer Service

As you’re focusing on building and growing your online business, you may be working hard to free up time and generate passive income. Don’t overlook that you still need to provide customer service to those who become customers.

With so many business transactions happening online—and sometimes even while you sleep—it can be easy to overlook the fact that human beings complete these transactions. People are way more likely to return as repeat customers if they have an exceptional experience with your company.

If you need help replying to inquiries and emails, make sure you do that, so your customers don’t wait long to hear back from you. Monitor review sites like Yelp or Google Reviews, as well as social media sites for brand sentiments. Reach out to customers who are delighted, as well as those who had something negative to say. Acknowledge their concern and make it right.

Steve Tobak, the founder of the business strategy firm Invisor Consulting, and author of Real Leaders Don’t Follow: Being Extraordinary in the Age of the Entrepreneur, gives us this bonus customer service tip: “Make sure you have some way of interacting with the people visiting your site. Whatever domain — through live chat, survey, email or phone.”

Marketplace Saturation

When you’re running a recruiting agency on Main Street in your hometown, your nearest competition is likely the next town over or further away. When you’re running the same recruiting agency online, the pool of possible other agencies for a consumer to choose from are multiplied tenfold and more.

Small Business Trends names this online marketplace saturation level as one of the top potential difficulties in your online business startup. It can be challenging to win over any marketplace penetration, so you need to stand apart with excellent marketing, brand development, communication, customer service, and product.

Click here for a free ebook to start an online business today

Business Failure

The definition of failure depends on your standards, and we’d argue that there is no such thing as an online business failure. Even if it doesn’t meet the goals you set or generate the level of income you seek, you can still be proud you’ve built some assets you’re proud of and probably connected with at least a few new people.


While the journey to starting an online business is no cakewalk, it’s certainly worth the effort. With careful planning, thoughtful implementation, and dedicated commitment to the business, you will enjoy the many benefits of having an online business. You will enjoy low startup costs, the freedom to manage your own time, and the ability to work from anywhere with the potential for unlimited passive income.

If you’re ready to get started. click here for a free ebook to start an online business today.


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