The Ultimate guide to starting an online business

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You want to start an online business as you see people on the internet make a lot of money or create impact to other people’s life.

The only problem you have is that, apart from browsing websites and interacting with your friends on social media, you literally know nothing on how the digital world works.

You then googled the phrases like “how to start an online business”, “start an online business” or “make money online” and you found this article.

What I can say is that you come to the right place 🙂

In this article, I will share with you step by step guide on how to start an online business and, as SoftwareWise is a software recommendation website, I will also share with you software required for each step.

I assure you that this article will give you enough information and guidance to help you start an online business (however, whether or not you will succeed, it’s entirely up to you).

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I have hands-on experiences building 7-fixture online businesses in Asia (you can read more about me here). Even though I don’t consider myself successful, I’m convinced that my experiences and what I share in this article will definitely make it easier for you to get started.

7 Steps to start a successful online business

1. Pick your Niche

“Mass is bad, niche is bliss.”

Don’t try to help everyone because if you do that, in the end, you will help no one. And if you help no one, you’ll become no one.

“Okay, I get that now but which niche I should pick?” This could be the question you have right now.

My advice is that you should find your “Ikigai

What is Ikigai?

Ikigai is a Japanese word that means “a reason for being”.

Your Ikigai is the combination of the following elements;

1. What you love – what is the things that you can spend hours with without being bored

2. What you are good at – what you can do well (or better than others)

3. What you can be paid for – Things that people are willing to spend money on

4. What the world needs – Things that are meaningful to the world and to people

In reality, you may not be able to find niches that answer to these 4 elements but at least, take these 4 elements into consideration before picking one.

For element 1 & 2, the best person to answer these questions is no one but yourself. But for elements 3 & 4, I can be of help.

If you want to know things that you can be paid for and at the same time, the world needs, you need to solve people’s pains and problems

How to find things that solve people’s problems?

Before I give you the answer, I have some questions to ask you first.

When you have a question or really want to know or learn more about something, how do you find answers?

.

.

.

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Yes, you will just google it.

Google has all the details about people’s problems because people always come to google to search for answers when they have problems.

So one of the best ways to learn more about what problems people have and want to solve is to learn it from Google.

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There are other search engines like Bing and Yahoo in the market but I will mainly focus on Google as it has the biggest market share.

How to Find problems people have from Google?

What you really need to use is keyword research software.

Basically, keyword research software gathers search data from by Google so it knows search volume and search difficulty for keywords people use on Google.

The first keyword research software I want to recommend you is the software from Google itself. It’s called Google Keyword Planner

Google Keyword Planner

Google Keyword Planner is a free keyword research tool from Google.

Before you start using it, you need to have a Google Ads account. Then, you look at the menu bar and click tools, keyword planners.

Now, you can start using Google Keyword Planner. I will show you an example on how to use it.

First, you just have to input keywords you want to check; saying I want to check the keywords ‘digital marketing consultant’

After adding keywords and click Get Results, Google will show you the average search volume of your keywords in the past 12 months, competition and price range of Google Ads’s Pay per click

Google will also suggest keyword ideas that are relevant to your search terms.

To check whether your niches are interesting, trying entering common problems or various search terms people might use and see average monthly search volumes and competition.

If your niches get adequate search volumes and they are competitive enough, it means that you can start your online business with those niches.

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Just to give you a guidance.

Since the past, we humans are interested in or have problems with wealth (i.e. finance, investment and money), health (i.e. fitness, weight loss), life (relationship, dating, pets and travel) and self-improvement (language, music and dancing).

These are the niches that people want and you can get paid for. Just dig deeper into these niches and you may find niches you should pursue.

Apart from Google Keyword Planner, there are many good alternatives as below;

  • Ubersuggest: The best free keyword research tool I have ever used (by Neil Patel)
  • Kwfinder: A keyword research tool by Mangools (With its subscription comes with 4 other interesting SEO tools; SERPChecker, SERPWatcher, LinkMinder and SiteProfiler)
  • Ahrefs: SEO tool with, in my opinion, the largest database in the world
  • SEMRush: A marketing tool that doesn’t only help you with SEO but also social media, PPC, Content & PR and market research

If you want to learn more about finding people’s problems or needs, I recommend you to read more about Maslow’s Hierarchy of Needs.

2. Choose your Business Model

Now you already know what niche to pursue. It’s time to think about your business model.

If you are considering providing value first and you can think of business model later, please don’t as, based on my experience, there’s a high probability that you will not be able to monetize from what you have built at all.

Big Picture

My take on this point is that you should come with the end goal in mind. Draw a picture in your head and then start writing it down in paper or your note taking application.

It’s likely that your future isn’t like what you previously thought and you may have to tweak your business model but at least, if you have a big picture in mind, you will have some paths to follow.

I personally like using Business Model Canvas (created by Strategyzer) to organize my big picture.

You can download a pdf version with a better resolution here.

You can see an example of Business Model Canvas here.

If you want to create and store your Business Model Canvas online, Leanstack is one of my favorite places. Its free plan should be good enough for you to use Business Model Canvas for one project.

Small Execution

Once you have a big picture, it’s time to think of detailed plans

What you need is a business plan.

A good structure should comprise of Opportunity (Problem & Solution, Target Market, Competition), Execution (Marketing & Sales, Operation and Metrics), Company and Financial Plan.

I personally use LivePlan to create my company’s business plan, forecast financial and keep track of numbers (Profit & Losses, Balance Sheet & Cashflow) along the way.

More Tips on Choosing Business Model

1. You are selling physical or digital products?

This question is important as I think physical and digital products operate differently

If you are selling physical products such as clothes, food or gadgets, I advise to pay attention to raw materials and logistics system and also put them in your business plan.

If you are selling digital products such as software, ebooks or online courses, I advise to pay attention to team and technology stack (read more about how to choose software for your business) and also put them in your business plan.

2. Consider having products or services to upsell or downsell.

If you can convert them to be your customers/clients, upsell them. If you try so hard but they don’t convert, downsell them.

For example, my other business has many products to upsell and downsell (physical book, online playbooks, online courses, consulting services and agency services).

As you can see, it’s like a funnel.

If one purchases the physical book, we will upsell him/her with the higher-tier products. Or if one purchases an online course from us but don’t convert to higher-tier products, we will downsell him/her with lower-tier products like the physical book or playbooks).

3. Build your website

Your website is one of a few digital assets that you really own.

If built and maintained well, your website will be like a real estate at a prime location that generates you revenue and other benefits continuously.

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You could start your online business with just social media accounts or selling on marketplaces but, trust me, relying on places that you don’t own will not take you far.

How to build a website?

If you are a non-coder, you may think that you need to hire a developer to build one for you.

But building website isn’t rocket science and anyone can do it – even non-coders (consider this website as an example – I built it myself without touching a single line of code)

So how to build a website really?

Domain Name

You will first need to register a domain name. Domain name is one of the first impressions visitors will get and it should be named to reflect your brands or your products.

In my opinion, you should go for .com domain if possible. But If your brand name or product name is too generic, someone has already taken that domain or it’s too expensive, you can consider .co, .io, .me domains as good alternatives.

Another option is to add prefix or suffix; for example, if my brand name is LeadPro but, leadpro.com has already been taken. I could go for getleadpro.com or leadproapp.com instead.

The best places to register for your domain names are Godaddy and NameCheap.

In my opinion, these 2 companies are good vendors for domain purchases but when it comes to other solutions like website hosting or email hosting, there are many better options available in the market.

Hosting/Server

After registering your domain name, next important thing is choosing your hosting. Choosing right hosting is really important as it’s like choosing a location for your brand.

Choose it right, you business will run smoothly. Choose it wrong, you may probably have to spend more time fixing your hosting than running your business.

If you are a beginner…

If you are just starting out and you have limited technical knowledge, it’s best to choose managed hosting as the hosting provider will make sure that your website doesn’t go down (of course, if you go beyond limit, you will be asked to pay more).

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When it comes to managed hosting, my favorite is SiteGround.

When I first started my digital business, SiteGround was one of the very first hosting providers I use.

What I like most about SiteGround is it fast support (I got support not in hours or days but in minutes every time) and their agents were willing to go extra miles to make sure that my problems were solved.

Noting that what I don’t like about SiteGround is its outdated backend (cPanel) which makes you unable to invite your team or your developer to manage your server.

If you are experienced and want to bit more of control…

In my opinion, managed cloud hosting is your better option as you will have more flexibility to scale your server up or down and at the same time, still having experts managing and monitoring your server.

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If you want to go with managed cloud hosting, I would recommend Cloudways as its console it very intuitive (you can invite users with custom permission and it’s very easy to use) and there are many cloud providers you can choose from; namely Digital Ocean, Google Cloud, AWS, linode and VULTR.

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This website is hosted on Cloudways (& Digital Ocean).

Website Builder

You can code your website from scratch but it will take you longer and sometimes will cost you an arm and a leg. If you are just starting out, building your website with Website Builder is a better way.

There are 3 main options that I would like to recommend you;

1. WordPress.org

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WordPress.org is an open source content management system that powers more than 30% of this world’s total website. Comparing with other solutions in this article, its learning curve may be steeper but it’s more flexible.

If you decide to go with WordPress.org, you will also need themes to style your websites and plugins to add more capabilities to your website.

For themes, I would recommend you these companies: StudioPress (only buy its themes if you can code), Astra and GeneratePress (Based on my experience, these companies constantly improve and their codes are very lightweight).

The fastest way to build a website is to import one of the themes from library and add your contents.

For plugins, the basic plugins you should consider using are Page Builder (Elementor or Beaver Builder), SEO (Yoast SEO or All-in-one SEO), Security (Wordfence or iThemes Security), Spam Filter (Akismet), Caching (WP Super Cache or W3 Total Cache) Backup (UpdraftPlus or Vaultpress (Jetpack))

2. Wix

Wix is one of the most famous drag & drop website builders in the world.

From my experience, building a website with Wix is fast and easy and there are hundreds of theme templates you can choose from its library.

The downside of Wix is that, unlike WordPress, you can’t switch your theme template once your website is published.

Read more: WordPress vs Wix vs Squarespace – Which is your right website builder?

3. Shopify

Shopify is an e-commerce platform powering more than 800,000 stores worldwide.

When it comes to e-commerce, Shopify is a more preferred option comparing to WordPress and Wix because it focuses on e-commerce; helping people sell online.

The downside of Shopify is that most of its apps come with premium plan. In the long run, running your shops on Shopify will be much more expensive than when you started (But I personally think it’s fine as long as long as Shopify can still help you make a good profit).

We have an article about 7 Shopify’s alternatives that you can read further on.

4. Create Content

To do business is to give and to take; you give something valuable (your products or your services) to customers or clients and then, you take something valuable from them (their money) in return.

It’s a simple process that every business follows.

However, when you are just getting started, you are just simply nobody. It won’t be easy to convince someone to do this ‘give-and-take’ with you.

So if you want to stand out among others and you want to attract potential clients to you, you first need to create contents that solve their problems.

By creating valuable contents, you give before you take.

What kind of contents you should produce?

Text, Image, Sound and Motion are the fundamental of all contents in the world. But when discussing content types, there are much more than that.

With text, you can create articles, ebooks, checklists, industry reports, product reviews, press release and many others.

With image, you can create infographics, social albums, viral quizzes and many others

With sound, you can create podcast and audio book.

With motion, you can create animation video, interactive demos, webinar, live and many others.

As you can see, there are many content options you can choose from. So what kind of content you should produce?

Well, this Content Matrix will guide you to the right direction.

content-matrix

Produce contents that entertain if your products or services are emotion-oriented and low-involvement purchase (customers or clients don’t need to take much time to think) and when you want to raise awareness.

Produce contents that inspire if your products or services are emotion-oriented and low-involvement purchase (customers or clients don’t need to take much time to think) and when you want your customers or clients to take action.

Produce contents that educate if your products or services are high-involvement purchase (long sales cycle & customers or clients need to take time to think) and when you want to raise awareness.

Produce contents that convince if your products or services are high-involvement purchase (long sales cycle & customers or clients need to take time to think) and when you want your customers or clients to take action.

Content Creation Software

Below are useful content creation software that will simplify your content creation processes or make your content standout among the crowd.

eBook & Checklist: Beacon.by, Canva and Crello

Image: Canva, Crello and Bannersnack

Quiz: Leadquizzes and Interact

Video Animation: Powtoon, Animatron and Animaker

Video Editor: Adobe Premiere Pro, Apple Final Cut Pro and Wondershare Filmora

5. Distribute Your Business

Content is King, distribute is Queen.

Your contents don’t get seen because they are great and valuable but they are distributed the right ways.

Generally, there are 3 ways to distribute your contents; through owned, earned and Paid medias.

Owned media

Your website is your best owned media. When filled up with valuable contents, your website will generate consistent and growing traffic over time.

Noting that, apart from valuable contents, On-page is also needed.

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SEMRush, KWFinder, Ahrefs; these SEO tools will help you do On-page SEO better

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The key success factors of doing On-page SEO are 1. having a good website (well-structured, fast loading, secured and responsive) 2. having quality contents (useful, long-form and problem-solving)

Your social media accounts can also be considered your owned media to some extent (you own your pages/accounts but real owners are those tech giants).

There are more than 10 major social media platforms so it would be very difficult to be active on all platforms considering you are just getting started.

My recommendation is that you should only be active on platforms that are good-fit with your business

For example, if you are in the B2B space, platforms you must be on is LinkedIn and Twitter, not Instagram or Snapchat. If you are selling cosmetics, Instagram, Snapchat and Pinterest are the platforms you should be, not LinkedIn. Or if you do business with Chinese companies, platforms you should consider using are Wechat, Renren, Weibo and Youku.

Read more: 10 best social media marketing software

Earned Media

Earned media is a type of media that you earn, most of the time organically, from medias, bloggers, influencers and key opinion leaders.

By growing, fostering and maintaining relationship with them, your goals are to build the followings;

  1. Authority – If you get enough and consistent coverage from relevant media in your industries, you will soon own the most powerful asset in the business world; Authority (or so-called Brand).
  2. Social Media Engagement – Shares, mentions and positive sentiments.
  3. Backlinks – Key success factor of Off-page SEO
  4. Sales – If done right, earned media could lead to sales.

When it comes to getting earned media, you can do manual works by researching and emailing websites or media one by one. Or else, you can use software to do it in a more scalable way.

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My recommended tools for starters are LinkMiner (backlink checker from Mangools), Buzzstream (Link building tool) and hunter.io (email finding).

Paid Media

It takes time and efforts to build your owned media and earned media; 3 months, 6 months or even more than a year to get it rolling.

You need liquidity for you to keep going or may be, you want to see result fast so that you can make a decision whether you should move on to other projects. There’s nothing wrong about it and it’s totally understandable.

That’s where paid media comes in to the game.

If helps you validate your business fast and get results in a more predictable way.

There are basically 2 main types of advertising in the digital world;

Social Ads – Major media platforms like Facebook, Instagram, Twitter, YouTube, Snap and Pinterest all have its own advertising platform you can leverage from (which one should you use? as discussed earlier, it all depends on whether which are good-fit with your business and it also depends on your team & budget).

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In my opinion, Google’s display ads (or known as GD) also falls into this category as it’s displayed all over the webs and it’s like a push marketing which is a typical nature of social media.

Search Ad – Google Search Ads is the biggest player in this field. When people have problems, they just google. The very first results shown on Google with ‘ad’ labels are paid ones. Bing ads also falls into this category.

How to make your paid media work?

1. Segment your audience – you have to learn how to create custom audience and understand the remarketing concept so that you can personalize your message for each stage of the funnel

2. Amplify your owned and earned media with paid media

3. Use your paid media with other channels like email, sms or messaging chat

4. Test & Iterate

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Some earned media could be considered paid media (i.e. advertorials and influencer marketing)

If you are just starting out or you have low budget, I think it’s best to buy media directly from the platforms.

If you have a lot of budget and need something more advanced, you can consider using one of these tools; Adespresso, Revealbot, WordStream and Qwaya. They will help you optimize and automate your paid media at scale.

6. Build Your Team

This is a huge topic and I could write all the day about it.

You First Start with Managing Yourself

Before building a team or start managing someone, it’s best to start with manage yourself and your time more efficiently.

These are the tools I personally use (or used in the past) and I found them really helpful as they keep me focused, get things done and organized my things better;

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Notion – All-in-one workspace for your tasks, notes, docs, tables and ideas (I’m currently using this one for my personal use and it replaced all my previous favorite software; Todoist and Evernote)

Be Focused – an app that lets you get things done by breaking up tasks among intervals, separated by short breaks (this method is commonly known as Pomodoro Technique)

Brain.fm – A Music app that helps enhance focus, relaxation, meditation, naps and sleep within 10 – 15 minutes of use (I personally use it for a short meditation and find it really useful)

Building and Growing a Team

“Alone you can do so little. Together we can accomplish so much more”

In the beginning, it’s okay if you do everything by yourself. But when your business gets bigger, you can’t do everything by yourself because it won’t scale.

If you consider recruiting people to join your team, there are two important tasks that you are expected to do;

1. Recruitment

If you want to build a good team, it’s very important to recruit the right ones.

Getting candidates

There are a lot of places that you can get candidates;

1. Job boards – Job boards are quite country and region-specific (for example, if your company is based in the US, Indeed and ZipRecruiter are popular ones; while, In Asia, It’s Seek and Jobsdb).

Hiring with Job boards is the least expensive option as you pay per job post (success isn’t guaranteed). In my opinion, Job boards are good when you try to recruit new graduates or junior-level employees.

2. Social Recruiting – LinkedIn is the world’s most popular when it comes to this option. You can use it to search for candidates for free or subscribe to its premium plan (LinkedIn Recruiter) to access premium features that help you find, engage and manage your hiring processes better.

3. Recruitment Agencies – Recruitment Agencies actively help you find right fit candidates for you. If you don’t hire, they don’t get paid. They normally charge you a percentage of your new recruits’ annual salary (ranging from 10% to 25%). In my opinion, you should use recruitment agencies when you look for mid-level employees or management level.

4. Referral – Referral is like a word-of-mouth marketing. Your friends or your employees introduce someone that they think are good-fit to your company. From my experience, this works really well and so far, this is the best method (in terms of the quality of candidates and cost) for my company

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If you are not looking for full-time employees but freelances, Upwork, in my opinion, is the best option available in the market.

Managing Recruitment Pipelines

When your company is small, managing recruitment pipelines with email and spreadsheet is good enough.

But when your company grows bigger, recruiting will be one of the most time-consuming tasks and you need better software.

If you are on a budget, you can use project management software like Trello or Asana or CRM software like HubSpot CRM to track applications.

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But if you want to manage your recruitment pipelines better, Application Tracking Software like Workable or Recruitee is a must.

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Be picky when it comes to adding another person to your team.

My best philosophy is “All to hire, one to fire”; To hire someone, you and all of your partners (or anyone in charge) must agree.

2. Managing Team

In my opinion, communication is the key to effective team management.

To communicate in projects better, you need team chat and project management software.

Slack is my most recommended team chat software as it’s easy to use and it integrates with a lot of software (there is no team chat software software that has a bigger integration ecosystem than Slack).

For project management software, I recommend Clickup (I’m currently using it for my team as well) as it’s feature-rich, easy to use, cost-effective. Alternatively, Trello or Asana can also help you manage projects better.

To communicate in terms of career better, I recommend you organize monthly one-on-one meetings with your employees (to see whether they have anything in mind or what you can do to support them).

Performance evaluation is also crucial to give your employees constructive feedback and get them to stay motivated. My recommendation for you is to conduct 360 feedback (employees will get chances to feedback themselves, their peers and their manager).

When you manage a small team, spreadsheet and forms are good enough to help you manage your HR tasks. But, again, once your company grows bigger, you need HR Software to manage your team better.

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My recommended HR software for your small but growing business are BambooHR and CakeHR (they are easy to use and won’t cost you an arm and a leg).

7. Measure your Business

“If you can measure it, you can improve it”

In my opinion, when discussing measurement, it’s best to look at your business as funnel;

ToFu (Top of the Funnel)

You should first get traffic (eyeballs) for your website and your other channels. What you should measure at this point are metrics like page views, average time on page, bounce rate (percentage of people who left from your website after just 1 visit), search appearance and social reach.

There are a few great tools that help you measure your ToFu I would like to recommend;

Google Analytics – The must-have software for everyone doing online business. You can use Google Analytics to track how your audiences interact with your website.

Google Search Console – A very powerful software to check how people find you. If you want to rank on Google, Google Search Console is your must-use software.

Facebook Insights – A module in Facebook Business which is built to help you understand your audiences better on Facebook

Hotjar – Hotjar is another analytics software. What’s different from Google Analytics is that its features like heatmaps and visitor recordings help you see how people interact with your website.

MoFu (Middle of the Funnel)

At this stage, people start to notice you and know what you have to offer. You have to nurture them to move them to bottom of the funnel. What you should measure are metrics like engagement on social media, number of subscribers or leads (who download your lead magnets), number of marketing qualified leads (people who engage with you a lot and are ready to be marketed to).

There are a few great tools that help you measure your MoFu I would like to recommend;

Google Analytics – Apart from using it to check how people find you, you can also use Google Analytics to track conversion like number of people who completed a goal you set; saying download your ebook.

Hotjar – Apart from its heatmaps and visitor recording capability, it can also help you conduct conversion funnel analysis (you can understand where people dropoff in your funnels) and Form analysis (you can understand why people abandon your form or page)

BoFu (Bottom of the Funnel)

At this stage, people are interested in your products or services and are ready to purchase or discuss business with you. Metrics you should measure are metrics like drop off rate (how many people visit your sales page but don’t buy from you), number of sales, number of deals (people who contact you or request a demo – this metrics is normally for B2B) and number of close won & lost.

Google Analytics – Google Analytics can help you track conversion goal like number of people who complete orders.

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CRM Software – Software like HubSpot or Pipedrive help you manage your sales pipeline better.

Summary

Starting an online business is never easy these days. You will face competitions regardless of niches you choose because there are a lot of case studies of successful people who make a fortune on internet.

You will definitely have some bad days as things are’t going according to plan but don’t give up.

Rome isn’t built in one day.

It takes time for you to build a successful online business too.

I hope that this article gives you a clearer picture on how to start a digital business.

Please keep in mind that these 7 steps are just guidelines. You don’t necessary to follow through these steps because your status quo could be different than mine. It’s best to be like a lizard, be adaptable!

Also, even though Rome isn’t build in one day, but bricks are being laid every hour.

What you should do now is to stop reading my article and start asking yourself about your Ikigai.

There’s no better time to start an online business than now.

Just do it, now.

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