How to Start an Online Business

This article is your resource for starting and growing an online business.

We’ve developed this comprehensive guide based on the real success stories of ecommerce owners, freelancers, SaaS entrepreneurs, and full-time content creators. 

By the end of this guide, you’ll learn:

  • The first steps to starting a successful ecommerce, freelance, content creation, or SaaS business
  • The real pros and cons of starting an online business in 2022
  • Answers to some of the most common questions beginner entrepreneurs ask

Here’s the reality: starting a business can feel overwhelming at the beginning. But if you have a vision and you’re willing to put in the work, there’s never been a more exciting time to start.

The big secret about launching a successful business is that you don’t have to dream up the next world-changing idea. The best ingredient to starting any business is knowing the unique skills and knowledge you bring to the table—and then leveraging them to turn an ordinary idea into an extraordinary business.

Table of contents

How we define an online business
4 online business ideas you can start today
How to become a consultant, freelancer, or coach
How to start an ecommerce business
How to become a full-time content creator
How to launch a software (SaaS) product
Bonus tips for starting an online business
A case for starting an online business today
Quick Intro

How we define an online business

Every year, the difference between online and offline businesses blurs more and more. Even physical stores usually have online storefronts. Your local lawn care company probably has a website that collects reviews, sets up appointments, and markets the business.

For this article, we're defining online businesses as companies that deliver services or products online. That includes ecommerce stores, content creator brands, SaaS companies, and online course creators. It doesn’t include companies that merely have an online presence but only deliver their products and services in person or via a physical store.

Online business vs. physical business

Online business
Physical business

Online business

  • Low upfront and ongoing costs
  • Sell to anyone in the world
  • Flexible business hours—potential to be open 24/7
  • Many products are scalable (you can’t sell out of digital ebooks)
  • Tap into the viral power of the internet
  • Make your business appear as large or small as you like through intentional branding
  • Ship physical products directly to consumers (rather than having to store them in a physical location)
Online business
Physical business

Physical business

  • High upfront and ongoing costs to rent work space
  • Focus on local customers
  • Set business hours
  • Customers can handle products in person to determine what they like
  • Discoverability by foot traffic
  • Natural social proof (seeing customers in a store)

6 steps to starting an online business

This post will dive into the specifics of starting freelance, ecommerce, content creation, and SaaS businesses. But before we go too deep, let’s cover what starting a business takes from a high level.

  • Discover a business idea: Start by considering where your personal interests and strengths overlap. If you’re reading this guide, you likely already have a few ideas. Now it’s time to choose one and double down. Do you have a rare and valuable skill that you can sell as a service or use to get a specific type of company off the ground? Do you have a passion for teaching or writing deeply about a niche topic? These are all skills that you can leverage to build an online business. But you can’t move on to product creation, marketing, or scaling phases until you first determine your business idea.
  • Create an MVP: Don’t overcomplicate your business idea. If your product or service meets a real market need, then you can build out all the fun bells and whistles later. For now, you just need to prove the concept, which requires selling a version of your product or service that you can put together in a weekend. For software creators, this is pretty straightforward: Focus on the core features. For content creators, this might mean creating short-form content about a subject to gauge interest before you film a full course or write a book on the subject. Regardless, the idea is simple: Test before you invest.
  • Find your first customers: Try to find people outside of your family and closest friends. Sure, they can be your customers too, but during this early stage, you want to prove demand for your offerings. That means selling to people who have a real need or interest.
  • Finetune your offerings based on feedback: As you serve customers, you’ll inevitably hear feedback from people who love, hate, or simply don’t care about what you’re selling. All feedback should be considered with a grain of salt. However, customer feedback is one of the best ways to hone your product into something people truly get excited to buy.
  • Consider the legal structure and finances: You’ll need to decide a business structure. This determines how you report and pay taxes to the government. From there, create a financial plan to determine how much to save for taxes, what expenses are necessary to keep the business running, and how you’ll operate business as a side hustle or scale it into your full-time job.
  • Keep growing your business: Once the foundation is in place, you can begin improving every element of your business. Implement scalable marketing tactics like digital ads or SEO. Look into faster or more efficient ways to create or deliver your product. Every business has potential areas of growth, optimization, or improvement.

Now that we’ve given you a general overview about what it takes to start an online business, let’s get more granular. Here are four common online business models (and how to build them).

4 online business ideas you can start today (with examples)

1. Become a consultant, freelancer, or coach

One of the easiest online businesses to start is offering a professional service. Almost every business needs writers, designers, and developers—but not every business has the budget or workload to hire them full time. You can fill that need and earn a good living online through freelance or consulting services.

2. Start an ecommerce business

Ecommerce is one of the most popular forms of online business. From selling homemade jewelry on Etsy to dropshipping clothes and tools on Amazon, online shopping has exploded in popularity—and it’s not going away. If you have a physical product to sell online, you may be able to earn a good living through an ecommerce store.

3. Become a full-time content creator

One of the fastest growing types of online business is content creation. This includes YouTubers, bloggers, newsletter creators, social media influencers, and podcasters. Once seen as an unrealistic job reserved for only the lucky few, content creation is becoming more accessible every year. The key is to find a niche where you’re uniquely qualified to help or entertain a very specific audience.

4. Launch a software (SaaS) product

SaaS stands for software as a service. Every company these days uses some kind of software. Whether it’s a payment processor to accept credit card payments or an email service provider for sending promotional newsletters, SaaS tools are everywhere. But this industry is still fairly new and there are endless opportunities for people to launch their own SaaS to sell online.

How to become a consultant, freelancer, or coach

At the beginning of 2016, I (hi, it’s me—the author of this article) resigned from my 9-to-5 job with no idea what I’d do next. A friend told me that I should learn about freelance copywriting. In his words: “Alex, you’re a good writer and you live in a tech city. These developers know how to build great products but don’t know how to tell anyone what they’ve made. Why don’t you just make a living writing for tech companies as a freelancer?” Long story short: I followed my friend’s advice. Six years later, I run a six-figure one-person writing business.

Here are several steps to launching a successful freelance business.

1. Master an in-demand skill

To launch a freelance business, you need to begin with a marketable skill. And no, you don’t have to be a world-class expert in that skill. You just need to be better at your skill than your clients.

Here are some of the most popular skills that people outsource to freelancers:

This is far from an exhaustive list. These are just a few of the most common skills that business owners look for.

2. Create a profile on Upwork, Fiverr, and Thumbtack

One of the easiest ways to launch a freelance business is to create a profile on freelance websites. Think of these as project aggregate platforms. Business owners from all over the world post projects they need accomplished by a freelancer. Then freelancers submit proposals to win the gig.

It’s usually very easy to get started on these websites. Most just require you to fill out a simple profile and then begin offering your services.

Consider the pros and cons of freelancer platforms vs. building a personal website.

  • Easy and (often) free to set up
  • Hundreds of projects to bid on
  • Built-in audience for bidding on projects
  • Financial protection measures to keep freelancers and businesses safe from fraud
  • Create a website that’s tailored to your ideal brand and design
  • Showcase your portfolio and services in your own corner of the web (far away from competition)
  • Appear more established by having a personal website
  • Many tools today make web development easier than ever
  • Bidding against a lot of competition for every project
  • Many freelance platforms charge significant fees on freelancer earnings (often 20%)
  • Limited design options for custom branding
  • Requires a lot of upfront work (and a learning curve) to get started
  • Many startup costs to host website, buy a domain, and potentially hire designers or developers
  • You’re fully responsible for driving traffic to the website

Remember: freelancer websites attract a lot of competition. Your goal should be to create a profile that stands out. Here are some things to try:

  • Talk about your specialties to stand out from generalists.
  • Get positive customer reviews as early as possible
  • Showcase your best work in the portfolio section (and update it regularly)
  • Use a good headshot that comes across as both approachable and professional
  • In your bio, describe the value that your work brings to clients. For example, instead of just saying that you write blogs, say that you help businesses with lead generation through high-quality blog writing. Even better, talk about specific results you’ve driven.

It’s not enough to just create a profile. With all three of these freelance platforms, you’ll also need to bid on projects. Here are the elements of an effective proposal:

  • Talk about the value your services will add to the client
  • Answer all questions that the client asked in their job listing
  • Proofread your proposal for typos or confusing language
  • Be clear about pricing, next steps, and deadlines
  • Respond in a timely manner—ideally within 24 hours of the post going live

3. Determine your rates

Here are three different ways to charge for your freelance services.

  • Hourly billing: This is the strategy most people already know. You bill projects based on the amount of time it takes you to complete them. This tactic is efficient because everyone understands trading time for money. However, for its simplicity, this approach also has a few problems for the freelancer. Most notably, when you bill by the hour, you’re penalized for efficiency. Think about it: When you complete a project quickly, you’re adding additional value to the client while being compensated less for your work. Other billing methods solve this issue.
  • Fixed fee: Fixed fee pricing means quoting an exact price for a specific deliverable. Instead of charging $50 per hour to design a website, you say that website designs cost $5,000. With fixed-fee pricing, freelancers often still bid based on their time, but never reveal that internal hourly fee to the client. It’s simply a way to standardize your fees based on the information you know: how much time it usually takes to design a website and how much you’d be happy earning during that time.
  • Value-based pricing: Value-based pricing is completely separate from hourly billing. Rather than billing based on the value of your time, you price based on the value of the project to your client. In fixed fee, you might charge $300 to write an email blast for a client. With value-based pricing, you’d take into consideration the value of the email you’re sending. Is this email projected to bring in $500,000 for the business? That’s an important email that needs careful attention. Charging $300 doesn’t quite capture the value you’re delivering. Maybe you charge $5,000 so it gets the full care it deserves. Value-based pricing is how designers have made a million dollars by designing a single logo. From the perspective of the business, paying top dollar is a hedge against bigger risks like having to redesign a logo that’s stamped across millions of products and marketing materials.
  • Retainer: A retainer pricing model is useful for ongoing contracts. It isn’t opposed to the other pricing models on this list but is instead a long-term version of each. Retainers are used to price for ongoing work. Usually, they are structured by a set number of hours or projects that the freelancer works on each month. As long as you’re under a retainer contract, the freelancer will invoice for the same amount every month or every other week, depending on their contract terms. For example, an SEO specialist may charge $2,500 per month for keyword research and blog writing. The SEO expert can choose to base their retainer on hours spent (e.g., “up to 25 hours per month”) or fixed-fee pricing (e.g., “three SEO blog posts per month, plus ongoing keyword research”).

Work backwards to set your freelance rates

This is one of the most common questions freelancers have in the early days. The easiest way to set rates is to consider:

Your income goals

The time it takes you to finish a project

How many clients you can realistically handle (or convert)

Start with the income goals. Let’s pretend that you’re a content writer who wants to earn $100,000 this year. That’s $8,333 per month. Since the average month has 20–23 working days, that comes out to about $362–$416 per day. 

For easy math, let’s say you can finish one blog post in a day. To reach your income goal of $100,000, you’ll need to charge about $400 per blog post and write 21 blog posts per month. 

All three of these variables—desired income, time per project, and client quantity—can be adjusted to change the outcome. But there’s a fourth factor that is equally important: what happens when you test these fees in real life by bidding on projects?

Calculating rates in your head doesn’t mean anything until you start bidding on projects. This is the ultimate feedback loop. If everyone hires you, you may be charging too little. If no one hires you, either your fees are too high or you should adjust something about the way you pitch your services.

One good resource to find comparable rates to your experience is looking at other bios. Find someone on Fiverr or Upwork with similar experience in your industry to get an idea of what you should charge. Here are a few more ideas:

  • Contact someone else who is already doing the same work in your same industry
  • Find online calculators (like this one for copywriters) or rate breakdowns (like this one for designers)
  • Browse freelance sites like Upwork to see what other people in your industry are charging

(Setting freelance rates is a huge topic. If you’d like to learn more, see Freelancing and Consulting as a Side Hustle.)

Levels of value

Freelancers charge highly variable rates depending on the level of value that they offer with their services.

(Setting freelance rates is a huge topic. If you’d like to learn more, see Freelancing and Consulting as a Side Hustle.)

The surface-level value is time. Many freelancers get their earliest projects by simply having the time to create, edit, or design that others don’t. If a busy entrepreneur wants to create a YouTube channel, they may be a good video editor. But if they don’t have time to edit, they will need to outsource the work to someone else. 

Saving someone time is a high value, but it’s the foundational value for your freelance business. The more benefits your skills offer, the higher you can raise your rates. 

For example, a writer can save a business owner time by drafting blog posts. If that same blogger learns about search engine optimization, the value of their blog writing goes up significantly! Suddenly, the business owner isn’t just paying you to save them time—they’re paying you to boost their website’s discoverability. 

4. Design an online portfolio

You don’t need your own website on day one. In fact, freelancers can go years without creating a portfolio, as long as they have other ways to find clients (such as through Upwork).

However, there are clear benefits to having your personal website. This section will help get yours off the ground.

Your portfolio should be easy to navigate, with clear headings and concise descriptions of your work. For almost all freelance services, it’s also helpful for your portfolio to be visually appealing. You want to make sure you showcase your best work in the best way. 

Here are five tips on how:

  • Focus on your strengths: Choose the work you’re most proud of. And if your work helped a client achieve something important (like improving sales, driving new traffic, going viral etc.), then talk about that success in a description next to the portfolio piece.
  • Keep it updated: You don’t want to look like a one-hit-wonder to clients. If all your portfolio pieces were made in 2018, clients might wonder about the quality of your latest work. Update your portfolio every few months to demonstrate that you’re a freelancer who’s actively delivering value for customers.
  • Use a professional domain: Appearances matter. It’s worth paying a little more money to have [businessname].com instead of [businessname].squarespace.com.
  • Use a portfolio builder (instead of just a freelance profile on Upwork): Wix and Squarespace are drag-and-drop website builders. You can begin with a template to easily get your website up and running in as little as a few hours.
  • Make it clear how clients should contact you: Include a form, email address, or other contact information to make it easy for customers to inquire about your services.

5. Market your services and close your first client

Fortunately, most freelancers don’t need a lot of clients to make their business sustainable. You just need a few good clients. Here are a few tactics for finding them:

  • Your network: The best place to start is with your personal network. Reach out to people who work in a field that requires your services. For example, designers, writers, and designers are all key roles in marketing. If you know a small business owner, marketing manager, or person at a creative agency, send them a message to let them know you’re available on a freelance basis.
  • Social media: Post online that you’re available for work. List your services, talk about your past work, and let your network know that you’re here when they need someone to take tasks off their plate. You can also use social media to look for existing freelance job postings. Places like LinkedIn, for example, are great for finding clients looking to hire. Facebook groups make it easy to connect and interact with people in a specific industry.
  • Networking: Attend local events in your city. Make it your goal to collect business cards (rather than just handing them out). By collecting business cards, you gain the power to follow up with everyone you meet. The day after the conference, email everyone whose business card you received: “Great meeting you this weekend. If you ever need a freelance video editor, I’m here to help.” It’s also helpful to attend paid networking events. This way, you’re networking with people who are willing to invest financially in their businesses.
  • Cold pitching: The internet has made it easy to connect with just about anyone. If you know your target customer, you can send direct messages to them on social media or send a cold email. Just remember: cold pitching is a numbers game. Very few people respond, which means you’ll need to cast a wide net by sending emails to many prospects in order to win a client.

Bonus: Tools to get started as consultants and freelancers

Need courses, software, and guides to take your ecommerce business to the next level? Consider some of these tools.

How to start an ecommerce business

During a crossroads in her career, Shana Rehwald quit her social media job a month before Covid hit and launched her journal, Me-est Me, in March 2021. Since then, the journal has appeared in many prestigious publications including Cosmopolitan and the LA Times Holiday 2021 Gift Guide.

Shana says, “I’m still working all the time, but this time I get to make the choice to do that—instead of feeling like I have a boss to report to.”

The essence of ecommerce

There are tons of ways to build an ecommerce business. The essence of this style of company is that you sell goods and services online. While these goods can be physical or digital, we’ll focus on good ol’ tangible, physical products in this section.

Starting an ecommerce business comes down to five basic steps:

  • Determine what to sell
  • Find a way to source products
  • Figure out where to sell your products (marketplace vs. website)
  • Learn to find customers
  • Create a system for fulfilling orders

Let’s dive into each of those topics.

1. Research and determine winning products

You can sell almost anything online these days. The best path to success is to focus on your strengths or unique advantages. Here are just a few ways to find good ecommerce product opportunities:

  • Bring an existing product to a new market: In the early days of Nike, founder Phil Knight didn’t invent a new running shoe. He simply started sourcing quality shoes from Japan that weren’t yet available in the U.S. By bringing an established product to a new market, Knight was able to eventually birth one of the largest athletic clothing brands in the world. This concept of selling an existing product in a new market still works today. In fact, the internet makes it even easier to source and ship those products to customers.
  • Create and sell custom products: Another popular form of ecommerce—and the hardest to replicate—is to create and sell custom products online. This form of ecommerce can be as large as major direct-to-consumer brands like FourSigmatic. Or it can be a small one-person operation on Etsy. The point is, when you create a product people love, you can develop an online store selling that product to customers.
  • Find arbitrage opportunities: Do you have access to affordable products that you can sell for a higher price online? Compare the cost of products you can purchase from a lesser-known or exclusive supplier to the cost of products selling on Amazon (or other online marketplaces)—the difference is where the profit lies.
  • Flip goods on the internet: This is technically another form of arbitrage. But because of its popularity, flipping deserves its own category in our list. Flipping is when you develop a skill for sourcing undervalued used items and then selling those items for a higher price to a different person. People flip everything from clothes to houses. Sometimes all flippers need to do is source the item and then resell it. Other times, flippers will add value to the item through some form of restoration. For online business owners, it’s best to start small. You may be able to find free items on Craigslist which you can sell on Facebook Marketplace.

Brett Schmechel flips retail items like furniture and clothes online. Over the years, Brett has earned a skill for spotting deals. He frequents thrift stores, estate and garage sales, and online sites like Facebook marketplace. Brett refurbishes and promotes these items to sell at a profit.

''I love the flexibility that flipping provides. But even more, I am motivated by the environmental impact recycling items has. While I realize I am just one person, I strive to reduce demand for new production wherever I can. Flipping is one of the ways I do that.''

2. Find an affordable way to source products

Next, determine how you’ll source the product. If you’re creating the product from scratch, you’ll need to find an affordable way to gather the material needed to create each one. 

Flippers like Brett often rely on garage sales, Facebook Marketplace, and thrift stores to source their latest products. Meanwhile, dropshippers might find products on one website (like Alibaba) and sell them at a higher price on Amazon.

Many factors impact the price of an item. Often the higher the quantity you buy and the more you shop directly (i.e., without middlemen), the better your margin is for selling. If you can go right to the source and shop in bulk for the products you need, you may be able to sell your products for a higher profit.

3. Choose an ecommerce platform and set up your store

There are three primary places to sell your products online:

  • Personal website
  • Marketplaces (like Amazon, Facebook Marketplace, AppSumo, and Etsy)
  • Social media

Each of these places has pros and cons. Established businesses often do a combination of all three. But as a new business owner, it’s best to start with just one. You can always expand later after getting some traction and mitigate some of the cons of each platform individually.

  • Full control over design and branding
  • Collect important metrics about your site visitors
  • Collect customer contact information for retargeting ads and email list signups
  • Many tools today make web development easier than ever
  • Requires a lot of upfront work (and a learning curve) to get started
  • Many startup costs to host website, buy a domain, and potentially hire designers or developers
  • You’re fully responsible for driving traffic to the website
  • Easy and (often) free to set up
  • Discoverability: Customers can find your product through often high-traffic platforms
  • Depending on the platform, there may be dozens of tools built into the platform to help with shipping, returns, customer service, etc.

P.S. it’s easy to list and sell your digital product on AppSumo!

  • Your products are often displayed next to competition
  • Receive less data about your customers for making marketing decisions
  • Limited design options for custom branding
  • Easy and free to set up
  • Your store is already on the platforms where customers spend time
  • Makes content marketing for your store simple, since your store and its marketing happen in one place
  • Your store exists on the whims of an ever-changing algorithm
  • Receive less data about your customers for making marketing decisions
  • Limited design options for custom branding

4. Set up a reliable fulfillment process

There are two primary ways to fulfill ecommerce orders:

  • Self-fulfillment
  • Third-party fulfillment

Self-fulfillment is a great place for young ecommerce businesses to start. It involves the owner—you!—packaging and shipping every new order to each customer.

Since you’re just getting started, fulfilling your own orders will be the fastest and most cost-effective way to kickstart your company. If you’re a flipper like Brett, you can deliver furniture in person to customers for a fee.

The downside is the manual labor and inventory management. Many starting ecommerce businesses fill spare bedrooms, closets, and garage space with their inventory until it’s ordered.

Once your sales begin to outpace your ability to fulfill them on your own, you might consider using a third-party fulfillment service.

Third-party fulfillment services handle as little or as much as you want them to. They can track orders, ship and process returns, and provide fancy software for managing sales and inventory.

It’s worth noting that Amazon allows sellers to opt in to letting the company handle order fulfillment. In this case, Amazon charges a slightly higher fee to pick, pack, and ship customer orders on your behalf.

5. Create a marketing plan and start selling

Now it’s time to think about sales and marketing. How will people discover your great products?

  • Digital ads: Learn the best practices of digital advertising. When you have a strong ad on Facebook, Google, or other digital platforms, you can sell products even while you sleep. The key is to test and invest. Don’t throw all your money behind an ad that hasn’t proven itself. First, start with a small budget. If the ad generates a profitable result, you can spend a little more, and so on.
  • Content marketing: Create content on a regular basis and publish to platforms where your ideal customers spend their time and attention. This may be Facebook, Instagram, LinkedIn, TikTok—you name it! The more you know where your customers spend time and what they love seeing, the easier it will be to create content that resonates. Check out this guide to creating your content strategy.
  • Search engine optimization: Most people think of SEO only in relation to Google’s search engine. But search engine optimization goes far beyond Google. Many ecommerce store owners find customers by optimizing product images and graphics for search on Pinterest.
  • Use a marketplace: Marketplaces often provide an extra element of discoverability. For example, when you list a product on AppSumo, customers can discover you in multiple ways: specific product categories, organic search, and through potential highlights on our social media channels.

Learn more about all these marketing methods by downloading AppSumo’s Essential Marketing Start Guide for free.

Bonus: Tools to get started as an ecommerce business

Need courses, software, and guides to take your ecommerce business to the next level? Consider some of these tools.

How to become a full-time content creator

Kat Harris has been blogging for 10 years. Her site, The Refined Woman, began as a fashion blog. Kat says, “From the beginning, I wanted it to be monetized. I didn’t just want to have a side hobby.”

It took Kat five or six years to realize the right direction for her blog. A big turning point came when she began asking her Instagram followers: Why do you follow me? What do you want to learn from me? “Instagram stories have been the best R&D,” says Kat.

Today, Kat continues to create content for her growing audience in the form of her blog and Instagram posts, a podcast, and other digital resources.

1. Determine your specialty

One of the big decisions you’ll face as a beginning content creator is choosing your niche. Some of the most successful content creators build their influence by appealing to a highly specific audience. As a general rule, the finer your niche, the more likely you are to achieve success.

So, how do you choose your topic? It’s time for some soul searching. Ask yourself these questions:

  • What subjects am I most curious to learn about?
  • What topics can I geek out about for hours and hours?
  • What skills have I learned that other people may find interesting or valuable?
  • What are some challenges I’m constantly helping friends and family solve?

If you still can’t think of anything, try sending those exact questions to your closest friends. Your expertise and interests might be obvious to everyone around you.

2. Become an authority on your topic

You don’t have to be an expert in your subject matter to create a powerful and helpful information brand. Many top content creators didn’t begin as experts in their core subject at all. They just went above and beyond to learn and research their topics before creating content to ensure their videos, articles, and podcasts truly added value. 

As you select your topic, remember that you can approach it as an expert or a journalist. Experts share from what they already know and have experienced. Journalists teach from dedicated research.

3. Build a loyal following

You don’t need a million followers to build a successful content business. In fact, the barrier to entry is much, much lower. In his classic article “1,000 True Fans,” editor and publisher Kevin Kelly writes that to earn a good living, all you need is 1,000 people who believe in you enough to spend $100 per year on your courses, products, or services. That comes out to $100,000 per year.

How to grow an online following

The most successful content creators play the long game. They also have goals beyond merely growing their audience to a particular size. People follow them because of their shared interest.

As author Cal Newport once described, the most successful content creators become “avatars'' of a specific idea online. As you publish more and more content, anyone who shares your belief or connects with your message may become a new follower.

People can tell the difference between someone trying to hack their way to a larger audience and someone who holds a genuine interest in their subject matter. But you can’t build an audience purely on enthusiasm—you must also be pragmatic and get the right system and tools.

The most successful content creators tend to be people who understand the fundamentals of audience growth while also maintaining a true interest in their subject matter.
Here are some practical steps for building an online audience:

  • Create high-quality content about a niche subject
  • Publish that content consistently across your preferred platforms (like Facebook, YouTube, Twitter, newsletter, etc.)
  • Think outside the box to distinguish your content from similar things on the web
  • Use a variety of content types, such as video, audio, and text
  • Offer a clear way for people to follow your content (an email newsletter is still one of the best ways to do this)
  • Partner with other creators to get your content in front of a larger audience  (by appearing as a guest on podcasts, writing guest posts for other blogs, etc.)

4. Choose your foundational platform (and your distribution channels)

Top content creators may have profiles on many channels. But if you look a little closer, they always prioritize one or two channels above everything else. 

How do you choose which channels to prioritize versus which ones to simply manage?

Think of this as two separate operations. The first is your core platform. Every other channel is your distribution engine. The core channel is usually the most easy to monetize.

As you create content on your core platform, you will share and repurpose that content on your distribution channels to get the word out. For example, you can splice clips from your YouTube video to create multiple TikTok videos.

A great example is James Clear. Clear has accumulated well over 1 million email subscribers to his newsletter. To market the newsletter, Clear publishes standalone snippets from the newsletter to Twitter, Instagram, and probably a few other social media channels.

5. Monetize your content business

There are many ways to monetize a digital audience. Here are just some of our favorites:

  • Build an online course: Content creators are often skilled teachers. If you’re the go-to person for learning a certain subject, then it might be a good idea to sell a premium version of the information you offer. You can create a digital course that covers some of your most popular topics. The key is to provide actionable steps for people to achieve their goals. Here are a few platforms for hosting your course content:        
  • Sell ebooks or templates: A much simpler process than developing a full course is creating and selling ebooks and templates. You might sell the same information that you would include in a course. Except you don’t have to get on camera or host video content. All you need is to draft useful written resources that you can sell as PDFs.
  • Create a premium online community: Followers may be willing to pay for expanded access to you or your other followers. By creating an online premium community (through Patreon or similar tools), followers pay you on a monthly or annual basis for exclusive access to a private group communication channel. You can do this through a Facebook group or Slack channel. Or you can use a dedicated community tool like WishList Member.
  • Sell ad space: One of the easiest ways to make money from your following is to sell ads. You can do this passively through Google AdSense on your website or YouTube channel. Or you can find alternative ad networks that fit your particular niche.
  • Become a product affiliate: Many companies pay a reward to content creators who help them sell their products. Once you become an approved affiliate seller, companies will provide you a unique link to their product. Any time you write about the product or include it on your website, you can use the dedicated link. When someone follows that link to make a purchase, you receive a percentage of that sale from the company.
  • Offer coaching, consulting, or freelance services: Creating content around a specific topic helps you to foster a reputation as an expert in that subject. Many people and businesses will gladly pay you for direct access to your expertise. They may hire you to consult, coach, or provide freelance services to solve their problems. See the freelance chapter of this post for information about setting rates.

Bonus: Tools to get started as a content creator

Need courses, software, and guides to take your content creator business to the next level?  Consider some of these tools.

How to launch a software (SaaS) product

Leo Bassam freelanced for several years and realized the difficulty of juggling multiple projects. He was tired of jumping between apps and managing multiple subscriptions just to do his job.

So he created Plutio, a project management software for freelancers. He designed the first version of the tool and hired a programmer to begin development. Since then, Plutio has grown quickly, including having multiple popular launches on AppSumo.

1. Determine the problem you want to solve

The most successful businesses don’t try to reinvent the wheel. The founders start by finding a clear problem that people want to solve. They create a product or service that meets that need.

Building a successful SaaS product requires more upfront work than most online business ideas on this list. You must design and develop the tool, which can require weeks or months of work.

That’s why it’s highly recommended to begin with a very clear and focused problem that you’d like to solve. Like Leo from Plutio, one of the best ways to find a problem is through self-reflection. What problems do you face at your current job that could be solved through software?

Here are a few other ways to find problems to tackle:

  • Ask friends about their most frustrating or tedious tasks at work
  • Browse negative reviews of info products (ebooks, courses, etc.), software, and businesses to find out what problems aren’t being solved
  • If you have special expertise, what challenges do you see a lot of people struggling with in your industry?
  • If you’re a freelancer or teacher, what problems do you regularly solve for clients that could be solved through a software solution instead?

2. Create an MVP to validate your idea

One of the most common mistakes SaaS founders make is feature bloat. They begin developing a tool to solve one problem. Then, they come up with additional ideas. Those new ideas turn into additional weeks of development. Eventually, you have a feature-packed tool that no one has used except the developer. A better approach is to begin with what’s called an MVP (minimum viable product). This is the lean version of your tool. You create this by first asking yourself: what is the bare minimum I need to see if there’s truly demand for solving this problem? When developing your MVP, style, structure, and features matter less than simplicity: does the tool solve what you say it will, no matter how clunky?

Here are a few ideas for developing an MVP:

Build out your functions and automations using existing tools like Notion, Google Sheets, or Zapier

Perform all the services manually

Test your assumptions on similar existing products

Once you have this first version of the tool, it’s time to begin testing it. Begin with a small market. For example, Uber was tested in New York City and San Francisco. New users literally had to email the founders just to access the tool.

Once you prove the concept through gaining initial users, you can begin fleshing out a better version of the tool.

3. Build a user-friendly software

Once you’ve proven the initial concept for your SaaS, it’s time to move beyond MVP. How do you begin creating a user-friendly SaaS? Start with feedback from your current users.

You can begin receiving feedback by creating a survey or by simply emailing customers to hear about their experience
. Customers won’t necessarily be able to tell you the exact features they’re looking for. But they will be able to communicate challenges they’re facing. They will also be able to tell you about glitches or confusing parts of your tool.

A big part of user experience is thinking about what you enjoy about your favorite websites and apps. Here are some examples:

  • Fast load speeds
  • Simple navigation (so you can find what you’re looking for)
  • Beautiful graphics and imagery
  • Clear copy that’s easy to read
  • An app that looks just as good on your phone as it does on your computer

Think of it this way: No one wants to use software that makes their life more difficult. The better your user experience, the more likely users are to return to your app.This information should fuel you to turn your MVP into a full-blown software like the one you envisioned in the beginning.

4. Market and find customers

Dilyar Buzan, founder of AISEO, says that one of the hardest parts of launching any SaaS business is finding the first 10 clients. But because it’s a unique challenge, it’s also one of the most memorable phases for starting entrepreneurs.

Want to launch with a bang?

Here are six elements of a successful product launch strategy.

  • Hone in on content marketing: According to the Content Marketing Institute, B2B companies with blogs produced 67% more leads than those without. So create a blog and become a thought leader in your space. This will help with two things. The first is long-term SEO benefit—the more popular your blog is, the more likely it is you’ll show up in future searches. These blogging platform tools can help you get started. Second, there’s the immediate benefit: You’re gaining content that’s easy to share on social media, allowing you to drive traffic to your website from other platform
  • Build an email list: An email list is one of the most effective ways to build a following online. It allows you to maintain direct communication with your customers and prospects. Here’s a resource for building your email list.
  • Use organic outreach: Search engine optimization (SEO) allows you to gain leads passively through Google search. SEO is a huge topic. But here’s the TL;DR: your ideal customers use Google every day to solve their problems. When you optimize your blog or website for search, you’re making it easier for your ideal customers to find your website when they need your solution. 
  • Use paid marketing: Advertising is another effective (and potentially fast) way to acquire new customers. You can sponsor relevant newsletters, pay for sponsored posts by influencers, or run targeted ad campaigns on Facebook and Google. The key is to test with a small budget and slowly scale that budget higher as you see a return on investment.
  • Try direct sales: Direct sales is one of the most common forms of SaaS growth. Since most SaaS companies have a highly targeted customer base, you can go to places like LinkedIn and message your ideal customers directly. If your product is designed for recruiters at hospitality brands, for example, you can make a list of the top 100 hospitality companies and use LinkedIn to directly message the top recruiters at each company. A cold pitch, and the sales process that follows, is a great way to acquire new customers.
  • An app that looks just as good on your phone as it does on your computer

5. Create a monetization structure

There are several ways to monetize a SaaS business. Here are just a few ideas:

  • One-time payment: Users make a one-time payment for unlimited access to your product.
  • Subscription: Users pay on a monthly or annual basis for continued access to your software.
  • Freemium: A freemium monetization model means that you give away certain features of the product in a lite version of your product. This is one of the most popular monetization models. Think of companies like Canva, Google, and Mailchimp. These are all huge software companies that offer free versions of their software. As people use the platform, some will desire additional features, which they can unlock through subscription or one-time payment.
  • Pay as you grow: This model plays on the success of your customers and allows people to pay based on a specific growth number. A newsletter tool might charge more depending on how many subscribers you have. Another tool might charge based on your number of customers, team members, income, and so on. As your business scales, so does the pricing.
  • Lifetime deal: This is a combination of the one-time payment and subscription models. This is essentially when you take a subscription-based product and provide a limited time opportunity for people to get indefinite access for one payment. AppSumo has helped many startups use this model to generate early users, test certain features, or simply get a boost of fast startup cash to fund future growth.

Bonus: Tools to get started as a SaaS founder

Need courses, software, and guides to take your SaaS business to the next level?  Consider some of these tools.

List it on AppSumo to potentially drive more sales

Bonus tips for starting an online business

Don’t settle for one online business model

Many online business owners don’t settle for just one business model.

Consider Jane Friedman. Jane is an author and blogger covering the publishing industry. So, how does she make a living? From multiple sources!

Jane is a freelance writer, book author, online teacher, and conference speaker, plus she sells a premium newsletter. Looking at her 2020 income breakdown, Jane had eight sources of revenue, with no stream accounting for more than 48% of her income.

It’s worth mentioning that Jane didn’t accumulate these income streams at the same time overnight. When you’re starting a business, it’s best to focus on delivering just one service or offering. As you see success with that part of your business, you can choose to expand into additional income streams. Here’s another example of online business owners creating multiple income streams.

Here’s another example of online business owners creating multiple income streams.

Income breakdown

Simplify online business by building a personal brand

The web has made it possible for people to leverage their personal name, ideas, and story to gain a following. We call this building a personal brand.

As we covered in the previous section, personal brands often offer more than just one way for the owner of the business to make money. Some customers want to learn from them. Some people want to hire them. Some people just want to buy their products. Each one of these paths is a different business model—and potential income stream.

There are many ways to define a personal brand. But we don’t have to complicate anything. Just ask yourself: Are you creating content and products that people are excited to consume every time? Here are some action steps for developing a personal brand:

  • Decide the topics you want to talk or write about
  • Choose one or more platforms (like YouTube, Twitter, podcast, etc.) where you’ll regularly publish your content
  • Establish a regular publishing schedule and stick with it
  • Steadily build an audience around your stories, information, and ideas

Here’s a resource on creating a personal brand to get you started.

Don’t let tax season sneak up on you

According to accountants, one of the biggest things new business owners overlook their first year in business is taxes. When you’re used to an employer withholding tax on your behalf, it’s easy to forget to set them aside for yourself when you become self-employed.

At the end of a successful first year in business, the government will want to share in your success—by handing you a tax bill.

But don’t fret. The key here is preparation. Speak with a tax professional in your country to learn the best practices for staying ahead of the tax season. A short consultation can go a long way.

Learn how to register or incorporate your business (and whether it’s right for you)

(This section is written based on the U.S. standards and should not be taken as legal advice.)

The government wants to know about your latest business. In the United States, when you begin making sales before registering your business, you are considered an unincorporated sole proprietor.

"A sole proprietorship is the simplest and most common structure chosen to start a business. It is an unincorporated business owned and run by one individual with no distinction between the business and the owner. You are entitled to all profits and are responsible for all your business’s debts, losses and liabilities.

No formal action is required to form a sole proprietorship. If you are the only owner, this status automatically comes from your business activities. In fact, you may already own one without knowing it. If you are a freelance graphic designer, for example, you are a sole proprietor."

In other words, you don’t have to wait in long lines at a government building just to start selling your ebook or freelance services. Selling items related to agriculture and firearms require special government licenses. But most online businesses do not require any pre-registration before you launch.

However, as your business grows, there may be certain advantages to registering or incorporating your business. There are multiple types of business entities. Some of these entities offer better legal protection, a more advantageous tax structure, or the ability to divide business ownership amongst multiple people.

If you’re wondering what’s best for your business, it’s best to speak with a tax advisor.  

Resources for starting a business in Europe.

Prove the concept before you quit your day job

You don’t need to have every detail of your business figured out before you launch. In fact, we highly recommend launching a minimum viable product just to make sure your product or service has real demand before you invest.

With that said, you do want to figure out some core things about your side hustle before you go full time into the business. Don’t quit your day job until you’ve done one of the following:

  • Make your job financially irrelevant: Set a rule for yourself. When your side hustle consistently generates a certain amount of money multiple months in a row, you can consider taking the leap. For example, you might determine that you’re ready to go full time into the business once your business income matches your full-time income for six months.
  • Save for a startup runway: Build up a financial cushion that allows you to quit your day job and pursue your business full time. The larger your savings, the longer your runway for achieving success in the business.

When you’re ready to jump into being a full-time creator, we’ll be here.

Expect to wear all the hats (and enjoy the learning experience)

Starting an online business comes with many learning curves. You’ll need to become a jack of all subjects, including marketing, sales, accounting, project management, and more.

This sounds scarier than it is in practice. Some things you’ll learn will feel intimidating at first. But the good news is that you don’t have to know everything from day one.

As you meet other creators and founders, learn through practice, YouTube, and books, and simply experiment in your business, you’ll move forward. One day, you’ll look back and realize the dozens of skills you’ve gained.

As your business grows, you can find tools or build a team around areas of the business that you no longer want to do on your own.

Find a supportive entrepreneurial community

Starting an online business can be a lonely and intimidating journey. Fortunately, there are hundreds of welcoming small business communities all over the web that you can take advantage of.

There are many benefits to finding a supportive business community. For example, more experienced entrepreneurs can refer to your work or provide recommendations based on their network and experience. A community also gives you a chance to read the success stories and mistakes of other entrepreneurs, so that you can learn by example. Plus, it’s just inspiring to see what other people in your city or industry are building.

Here are just a few places to connect with fellow entrepreneurs:

You can also subscribe to entrepreneur-focused newsletters, like:

A case for starting an online business today

  • Benefits of starting an online business
    There are hundreds of reasons why people start businesses. Let’s talk about some of the most common ones.

    Uncapped financial upside: Working for an employer, your salary is determined based on the market rate for that position. The company may want to pay you a great salary, but there’s always a cap to how much they can pay you while still making a profit. On the other hand, when you start a business, your income is determined by pure supply and demand. If you can keep selling more products, raising your rates, or taking on new clients, in theory, there’s almost no cap on your earnings. With risk comes reward.
  • Be your own boss: As we like to say, work doesn’t have to suck. One of the biggest benefits of entrepreneurship is the ability to design a business that fits your ideal lifestyle. Want to work from 4 a.m. to 2 p.m.? How about from a beach in Thailand? Well, who’s going to stop you? When you own the business, you’re the boss, boss.
  • Pursue your passion: Not everyone knows what they’re passionate about. For those who do, running a small business can be a great path toward making that passion a reality. Some of the most successful artists in the world are just entrepreneurs who learned how to effectively sell their creations.
  • Design your dream job: Some people know exactly what they want but they don’t see any jobs out there with that description. Through entrepreneurship, you get to design your dream job.

Ignore the imposter syndrome

When you’re in the early days of learning how to start an online business, you might start to doubt yourself. Do you really have what it takes to be an entrepreneur? What will friends and family think? What will your dog think?

You don’t need anyone’s permission to start a business. (And your dog has always believed in you, we promise.)

There’s a term for feeling unqualified to start something: imposter syndrome.

The good news is that everyone—from your favorite artist to the most successful business owner—experiences imposter syndrome sometimes. Here’s what Maya Angelou says about it.

"I have written 11 books, but each time I think, ‘uh oh, they’re going to find out now. I’ve run a game on everybody, and they’re going to find me out."

In other words, every artist and business owner faces personal doubts and imposter syndrome. But we’re here to say: you’ve got this.

Ready to launch your business?

Entrepreneurship isn’t easy. But it’s more accessible than many people think. Whether you’re selling skills as a freelancer, information as a content creator, physical products as an ecommerce store owner, or a SaaS product as a founder, the journey is often worth the challenges.

We created this guide to make your path to starting an online business a little easier with stories, tips, resources, and products for turning your idea into a real business.

Now it’s time to move the needle on your idea. Doing the research is important to the entrepreneurial journey. But the most valuable step is getting started.

You’ve got what it takes to be an incredible creator. And when you need tools to run your business, AppSumo is here to help.

Additional resources