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•What is an online business?
•How can it help me?
•How much do they cost to start?
•Where should I start?
An online business (or e-business) can take on many shapes and sizes. For instance, most of us are familiar with Amazon.com, an online retailer that sells pretty much anything you can think of — all online. This is what is referred to as an eCommerce site. Other examples of eCommerce sites are eBay, Etsy and our friends over at Pura Vida Bracelets. They are a good example of an online business that you could emulate, so we’ll showcase them throughout this book.
The gist of an eCommerce site is that the entire interaction between the retailer and the consumer is done through the Internet. There may or may not be a physical location (e.g., Macys.com and Macy’s), but for sake of simplicity, if the transaction happens online, it can be considered an online business.
Most of us are familiar with the concept of eCommerce sites, but they aren’t the only types of online businesses. There are ways to monetize Podcasts, Webcasts, blogs, and even service-based businesses. We’ll take a deeper dive into the many platforms and methods available in later chapters, so for now let’s just focus on how an online business can help you.
Imagine you have a skill set that you are very passionate about or really good at. Maybe you have a job doing it already and thought, “I’d rather do this MY way.” Or maybe it’s a hobby that you do in your free time and want to make good money on the side with it. If you’re like most people, the thought(s) have probably crossed your mind at one point in your life. In fact, every one of us has a unique skill set that could make good money outside of the traditional 9-to-5. The trick is finding out how to monetize it. Don’t worry, that’s something we’ll cover in great detail over the course of this book. Whether you are considering starting a lifestyle business on the side to supplement your income or an all-around career changer, the principles of an online business are the same. Let’s take a look at some of the benefits of having your own online business:
Make your own hours - Internet businesses run 24/7, but you don’t have to. Whatever work needs to be put into the setup can come on your time. Are you working around demanding school schedules or family obligations?
Work from anywhere in the world — as long as you have an Internet connection, you can pretty much work anywhere you want.
Opportunity to monetize your hobbies — perhaps you already create a product of some kind and want to sell it. Maybe you’re already selling it at a local school or church and want to make it accessible to the entire world. Online businesses are a great platform to do just that. They allow you to be in “many places” at once.
Potential to be automated — some online businesses can be set up to run without you. After the initial setup, they can be an amazing source of recurring revenue. That means extra money going into your pocket each month without a lot of extra work.
No overhead of physical location — we’ll cover this in greater detail in the next section, but not needing a physical “storefront” makes starting a business much easier and lowers your upfront risk.
Low startup costs — compared to brick-and-mortar businesses, online businesses are a substantially smaller investment. Many can be started with less than $100, whereas “offline” businesses can costs $1000’s.
So exactly how much does it cost to start an online business? Well, the answer to that is, “It depends.” As I mentioned before, you could potentially start an online business for less than $100 — or even free. Depending on the platform you choose to start your online business, your costs and time investments will vary.
Take for instance Pura Vida Bracelets, who specializes in selling handcrafted bracelets. Pura Vida Bracelets started with just a $100 investment and is now selling over $2 million in bracelets each year. By creating their own Website and leveraging social media, the two co-founders were able to save money on their new online business and grow it into the lifestyle brand it is today.
Let’s look at another example. Say you’re an expert in underwater basket weaving and you want to sell your amazing masterpieces. You get yourself an inexpensive Website from ThemeFuse for under $45, domain and hosting from InMotion Hosting for $6 and supplies for around $100. Then you take some snappy, high-quality pictures of the completed baskets with your smartphone, upload them to your Website, and BAM - you have now created your very own online business for under $200. If you were selling a service such as accounting or consulting, that cost could be even less since there would be no supplies to work with.
Now what if there was a topic or skill you had domain expertise in and wanted to share it with the world? An eBook might be a great platform to get your knowledge to the rest of the world and make money doing it. With all of the free tools available, you could start an online business selling your eBook, costing you as little as $0! That’s right, by leveraging social media and various commerce sites like Amazon.com, you could make money selling an eBook that costs zero money without having to create a Website. If you wanted to step it up a notch without a large investment, services like LeadPages allow you to create a landing page (simple, one-page Website) in 5 minutes for $37. They even have eBook templates ready to go.
These are just a couple of examples of online platforms that you can use to set up your online business. While costs can vary based on the product or service you are offering, leveraging all of the services and tools available to you can get your online business up and running with little-to-no investment. Throughout each learning track in our curriculum, we’ll guide you through the best course of action to take in order to get the best bang for your buck. Our goal is to help your online business to succeed, so we’ll help you minimize your startup costs through our strategic methods.
Start by printing out the Online Business Idea Canvas at the end of this book and begin thinking about the questions we will be going over. By the end of this section you should have a pretty good framework for your online business. For the best results, fill in your Idea Canvas as you go through the questions.
Are you especially good at any hobbies, sports, activities, skills or even jobs? If you were already being paid to do it by someone else, would you prefer to do it on your own or in other context? Think outside of the box. If you are an accountant and have accumulated a world of knowledge in that industry, monetizing that knowledge can be a great way to supplement or replace your current income stream. Think: eBooks, consulting, blogs, instructional videos, etc. You don't necessarily have to do the work to make money in that field either. For instance, most of us aren’t good enough to play in the NBA; however, many people are very knowledgeable about basketball and could teach people how to draft the perfect fantasy basketball team. Alternatively, they could have a weekly podcast about basketball or sports in general. The kicker is, you can actually make money doing these things!
Do you like doing and/or helping people with particular things? Are you excited when you talk about a certain topic? Is there something that consumes your thoughts on a regular basis? These are all good indicators of something you might be passionate about and the foundation for running a successful online business. If you’re not passionate about it, what’s the point in starting an online business around the idea anyway, right? Again, try and be creative when thinking of ideas and don’t be afraid to be abstract. Don’t worry about how it can be made into a business just yet, but think of some topics you would enjoy making money with. Here are some examples for you to work with:
▪You enjoy helping others learn
▪You’re passionate about a particular topic
▪You like the idea of making a difference in the world
▪You love volunteer work
▪You can’t go a day without talking about the latest fashion trend, technology advances or political atmosphere
As you can see, some of these passions listed are broad and general in nature, while others are more specific. The beauty of it is that it doesn’t matter as long as it is something YOU are passionate about and want to make money with. Each one of them can be monetized in an online platform with as little or much time as you want to put into it.
Now that you have thought about the first two questions, how do they align with one another in a potential business? Be creative and have fun with the idea. Are you a domain expert that could sell an online course? Do you want to talk about your knowledge in a weekly/monthly Podcast? Write an eBook on what pitfalls to avoid? Perhaps start a blog and generate revenue based on affiliates and/or advertising? Create a service out of your home, such as Web design or accounting? The possibilities are only limited by your imagination. Remember, this business doesn’t have to be something you currently get paid for nor does the act of providing it have to make money. There are other ways to generate revenues without needing to “sell” a product or service, such as advertising or affiliate relationships.
While this question isn’t as important at this juncture as it will be later on, it’s a good idea to consider your long-term goals for your online business. Are you looking for supplemental income or would you prefer to replace your income altogether? Perhaps you would like to start with supplemental income and THEN replace it. The important distinction to make is what upfront investments are made (both time and money) and what they mean to your long-term costs/savings. For instance, you may choose to hire someone to build you a Website so your business gets up and running right away, whereas others may want to take the time to learn how to build their own Website in order to save money. Both options are perfectly okay and the beauty of online businesses is that they are flexible enough to work with either.
eBook — a publication in digital form that is readable on computers or other electronic devices. eBooks can be delivered via personal Websites, landing pages, and/or 3rd-party services, such as Amazon.
Podcast — an audio program in digital format that can be downloaded or streamed live over the Internet. Podcasts can be daily, weekly, or sporadic content based on discussions, interviews, and the like.
Webcast — a video version of a podcast, whereby programs can be downloaded or streamed live over the Internet. As with podcasts, Webcasts can be daily, weekly, or random content based on discussions, interviews, and the like.
eLearning (Online Training) — the use of electronic media and technology, such as audio, video, and animation, to deliver educational material over the Internet. eLearning can be used to teach current skills and/or interests to others through a personal Website, landing page, or third-party service, such as Udemy.
eCommerce — the sale of any good, physical or digital, over the Internet. eCommerce can be delivered though personal Websites, landing pages, and/or 3rd-party services, such as Amazon.
Blogging — a platform for discussing a particular topic, either educational or entertaining in nature. Blogging is done through a personal Website, syndication site, or third-party service, such as Blogger.
Vlogging — a video version of blogging, whereby discussions are done through video and delivered through a personal Website, syndication site, or third-party service, such as Blogger.
Pay-Per-Click Advertising (PPC) — an Internet advertising model that is used to direct traffic to a particular site in exchange for a small fee. PPC can be leveraged from both the advertiser and publisher side of the transaction.
Consulting/Service-based Businesses — a way of providing a service with or without the use of a physical location. Service-based businesses can deliver services partially or entirely over the Internet
By now, you should have a general sense of how you can take current skills and/or passions and create a business out of them. We’ll get down to the nitty-gritty details of launching the business in later chapters, but for now you should have a foundation of what an online business is and how you can easily create one.
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•How is an online business similar? Different?
•What are the weaknesses of brick-and-mortar?
•What are the strengths of an online business?
•Understanding the upside revenue potential of online businesses
Starting your own business is both empowering and rewarding, but it can also come with its challenges. Where do you start? How much will it cost? How will you reach your customers? These are all very valid questions, but for the purposes of this chapter, let’s focus solely on one: should you create an online business or one with a physical location?
Online businesses and brick-and-mortars have their similarities: they are both legal entities, they each provide a value to consumers, they can employ people and they generate revenue. But how are they different? There are a lot of differences, but the very nature of how they reach their customers is a difference in and of itself and can be summed up in one word: location.
Location is one of the age-old proponents to brick-and-mortar shops, but ironically serves as a disadvantage in today’s economic climate. We’ve all heard the phrase, “Location is everything,” and while I couldn’t agree more, the fundamental changes that the Internet has brought to business have revolutionized the entire competitive landscape and how location is viewed. Yes, for your local flower shop or grocery chain, a physical location might be a key component to its success, but does it have to be? What if you could be everywhere at once?
We’re all familiar with ProFlowers, 1800Flowers, and FTD, but could an online grocer with delivery services also be successful? Companies like Netgrocer, Peapod and USgrocer would like to hope so — even conglomerates like Wal-Mart are getting in the space, because they see the opportunity for virtual services and the cost advantages associated with them. What about businesses that don’t have a physical product? Does your local tax attorney or counselor need an actual office? Probably not. In fact, virtual firms and consultancies are popping up every day in industries such as tax, accounting, law and more. And it’s not just the Internet making this possible; advances in technology have brought connectivity and video right to our pockets, making it possible to run your business from anywhere in the world. The fact of the matter is most service-based industries are capable of operating without a physical location. And the ones that do need a physical location, such as dentistry, are finding that online platforms are great ways to add to their value proposition and supplement their income. Could a dermatologist launch a Website selling his or her products in addition to running their practice? Could a salon offer online beauty classes in addition to the tactical services they provide? The answer is an astounding “YES” and there are businesses doing it right now. What’s even more astounding is that they are able to reach FAR more customers by doing so. If location is truly “everything” to a business, why not be located everywhere? The Internet and online businesses make this possible.
Times change, as do people’s expectations, and whether you like it or not, the world is going digital. The purpose of this book is to help you find your differential advantage and get ahead of the competition while you still can. There are lucrative opportunities available by starting your own online business, so we’re here to help you strike while the proverbial iron is hot. Let’s look at some of the other advantages to starting an online business (and disadvantages to running a physical location):
•Limited to local customers
•High starting costs -- can cost $1,000’s
•High maintenance costs i.e. janitorial services, handymen, etc.
•High switching costs i.e. moving storefront location
•High overhead -- lease agreements or building purchases
•Higher costs = higher risk
•Limited by traditional store hours, weather, parking and other factors
•Not limited to local geography
•Lower starting costs -- can be started for under $100
•Little-to-no maintenance costs
•Low switching costs i.e. switching hosting providers
•Low overhead -- no lease agreements
•Lower costs = lower risk
•Can operate 24/7/365
•Can have the look and feel of an established company from the onset
Real World Example — Pura Vida Bracelets
In 2010, a five-week college graduation trip to Costa Rica turned into the business venture of a lifetime for two friends from Southern California. Griffin Thall and Paul Goodman had embraced the “pura vida” lifestyle that Costa Rica embodied and wanted to bring the vibe back home with them.
During their journey, they came across a couple of street vendors selling handmade bracelets and knew that there was an opportunity to share this with others. Beyond just jewelry, these bracelets seemed to be a symbol of the freedom, simplicity, and worry-free lifestyle that made the Costa Rican locals so happy. With just $100, Griffin and Paul purchased as many of these bracelets as they could from the vendors, with full intentions of coming back for more. If they were able to successfully sell these bracelets back home, they would have a business relationship that would provide employment opportunities for Costa Rican artisans as well as keep themselves ‘gainfully employed’ back at home post-graduation. Once Griffin and Paul were back in the US, they put the bracelets in a local boutique to gauge people’s interest and they sold out in a matter of days. People loved the bracelets — they loved the idea behind them and wanted more. Capitalizing on the opportunity, the two friends — and now business partners — decided that Pura Vida Bracelets were here to stay.
It’s only a few years later, and Pura Vida Bracelets is now a full-fledged eCommerce company and lifestyle brand, employing dozens of people in the US and over 65 in Costa Rica. Their products are sold on their Website as well as in more than 2,500+ retail locations, both domestic and internationally — accounting for over $2 million in annual sales. Not only did they start the company out of their homes, most of their success can be attributed to organic, grassroots efforts and a loyal consumer following through social media.
As you can see, it doesn’t take a lot of money to create a successful business — just a focused business model, execution and constant iteration. If Pura Vida Bracelets can turn a $100 investment into a multimillion-dollar company by selling $5 products, so can you.
Check out Pura Vida Bracelets