Many of the members of the FC community are now starting their own online businesses and figuring out the steps to creating an online business. So recently we were getting many requests to create more content for this group of our members.
We already covered in detail the steps to creating an online business in the space of freelance business consulting in our FC Insiders program “Replacing Income with Online Freelance Consulting.” We also provided some detailed guidance to a broader FC community in complimentary articles, “Freelance Consulting Online: a Beginner’s Guide” and “10 Powerful Insights to Help You Succeed as a Small Business Consultant.” And we plan to continue bringing new resources to help.
Some members are figuring out the steps to creating an online business because they lost their job or are about to lose their job. If you are in this boat please see links above for resources that can help. While others are doing so because they now see how unstable the world is and would like to have some additional financial security. And, of course, there are others who always wanted to be their own boss and COVID-19 pushed them over the edge to finally take action and start controlling their own destiny, even if some of them are doing so while temporarily keeping full-time employment, a wise plan in most cases.
FIRMSconsulting.com is over 10 years old. During that time we expanded to more advanced platforms including StrategyTraining.com, Strategy Training Roku, Apple TV, iOS and Android apps. We are also running two of the world’s largest podcast channels for critical thinking, problem-solving and strategy, Strategy Skills iTunes channel, and Case Interviews and Management Consulting iTunes channel. We also run a successful book publishing business (see links to our books at the bottom of the page).
Further, we ware working on other businesses as part of our private equity arm, including an electric car start-up, a cosmetics start-up, a luxury brand business, and a gold mining business. We also helped many clients build profitable online businesses or even departments within large companies. Some of these success stories are documented in detail on StrategyTraining.com. So we have a lot of experience of starting and running a business and therefore it makes sense for us to share this knowledge with our community.
If you own an online business it gives you the freedom to more or less work any time, anywhere, and make money while you are sleeping or spending time with your family and friends. Online businesses are also relatively easy and cheap to start, making it an ideal type of business to start in 2020 for many people. Below are 8 steps to creating an online business based on our experience of running FIRMSconsulting for over 10 years and building and running other online businesses as part of our private equity arm.
One of the other key steps of creating an online business is, of course, selecting a target market you want to serve. Whom you would like to help?
For example, at FIRMSconsulting our purpose is to help our well-meaning, hardworking clients to solve the hardest mankind’s problems. In other words, there is a group of people around the world who are a part of our community who have the intention to solve difficult problems and, in turn, make their company, their industry, their city, their country, the world better.
Because we know whom we are trying to help we can deliver that help in multiple ways (books, one on one guidance and start-up partnerships, our incredibly detailed and in-depth training programs focused on applying and advancing).
Figure out the niche market you want to serve and why you are passionate about serving that market? How does this align with your own life’s mission?
Notice that we are not interested in serving people whose only intention is to make money or career advancement. Some of them will use our products but those are not individuals we are putting our heart and soul to create resources for.
Quick Tip: If you are struggling with this step, the following process may help:
It is better to get started even if you don’t choose the perfect idea. A few months from now will be a few months into the process of building your business. At that point, you can pivot if required. By getting started sooner you will start making a lot more progress.\
When people going through steps of creating an online business they often skip this next step, but it is crucial. You don’t need to spend much time here. But it will be valuable to speak to some target customers to understand their biggest pain points and problems they are facing and how you could help them. This is especially helpful if you are starting a business because of the product idea you came up with. Speaking with potential users helps you to see the level of enthusiasm people will have for the product you want to offer.
How to find people from your target audience? Reach out to potential customers. Think about who within your network is a part of your target audience and start there. Thereafter, you can reach out to people from LinkedIn. Generally, if you are polite and respect their time people will be willing to at least send you a few lines to help you out.
Let’s take a look at one of my favorite examples. This one is for a physical product but very well illustrates the value of speaking to potential users. Let’s say it is a world 20 years ago and you are interested in bringing to market a personal digital assistant. You know you can create this device but technological limitations will require you to make it as big and as heavy as a brick. Let’s say that you also will need to mortgage your house and your parents’ house to be able to do the first batch of devices. After speaking to a number of business people who agree that they will be very interested in personal digital assistant you may be able to discover that, in fact, the crucial criteria for them using your device is if they can put it in a pocket. Otherwise, it is a cool toy but they will not carry it with them and, hence will not use it.
One of the key steps in creating an online business is to limit your personal liability. So the first step is to ensure you register your business as an entity, separate from you. You need to decide if you will operate as a limited liability company or corporation.
What if you want to wait and see if your business makes money before you invest in creating a company? Theoretically, you can operate as a sole proprietorship. Many people operate as a sole proprietorship for much longer than they should and expose themselves and their families to significant financial risks. As a sole proprietor, you have no protection from liability for your business debts and obligations.
The type of business entity you select depends in large part on where you are located and what is advantageous from a tax perspective.
An LLC generally involves less reporting and record-keeping than a corporation. And as the owner of LLC, you are typically not personally liable for the business’s obligations.
We personally like to operate our companies as a limited liability company, LLC.
You also need to select a business location. For example, if you are based in the USA you can select the state where you want your business to be located. Some locations, like Nevada, are advantageous for tax purposes. So you will have more resources to invest back in the business. However, for most people, the selection is simple. You just use your current physical location. E.g. if you are located in Toronto, Ontario you register your business there.
Once you select your entity type and location, pick a name (e.g. Media House LLC) and register your business. There are many affordable services online to help you register your business. Type in Google or a search engine of your choice your location and business registration and see which services come up.
Or course, we can’t list steps to creating an online business without a step of buying a domain and building a website.
Once you are certain that the market you want to serve does need help / has problems they need help with and you have at least some level of understanding of what those problems are, you can select your domain and build a website.
To select the domain go to https://www.godaddy.com. Your domain name should not be longer than 2 words and ideally, should have a keyword included. It should also be easy to pronounce and memorable. The domain can also be a combination of 2 words that generally do not go together, like upwork.com. Or it can be an unusual word like Canva or Google. However, if you will have a keyword in the domain name it will help you with search engine optimization which is a crucial point for online businesses.
Building the website in 2020 is very fast and simple. You can go the easiest route like WIX.com or SQUARESPACE.com. I personally would go with WordPress. It requires more work but it also gives you more flexibility.
If you go with WordPress and if your site is relatively simple you may be able to get a theme that includes everything you need and be able to handle the entire process yourself, without hiring a developer. You will also need to select hosting. Godaddy.com or WordPress.com are both good options.
On of other critical steps to creating an online business is, of course,setting up online payments. You can’t run an online business if your customers can’t pay you.
As an online business, it is critical that you have a convenient for customer way to accept their payments. Two of the most popular options are Paypal and Stripe. We prefer Stripe.
Again, we can’t talk about steps to creating an online business without dedicating sufficent and urgent attention to building and strenghening your email list.
Before you start building traffic to your site make sure you set up an email collecting system so people interested in your services or in your free content can share their email address with you. Here generally it is best to offer a free gift to give an extra reason for someone to join your email list. This can be a discount for your service or product, a free download, or a video.
Services you can use are GetResponse, Infusionsoft, Ontraport, Mailchimp, and others. Infusionsoft is, in my opinion, way too expensive unless you use all their features which is not something a start-up generally needs. GetResponse, Ontraport, and Mailchimp are simpler to use.
Make sure your use useful information to your list on a regular basis to keep your list alive. The goal of an email list to turn potential customers into actual customers. Try to email your list about 1-2 times per week and try to always add value.
And could we talka bout steps to creating an online business without figuring out how to build traffic to your webiste? Of course not!
It goes without saying, next you need to start building traffic to your website.
Here you have 2 options.
Organic traffic: You can focus on getting organic traffic from search engines, podcasts, youtube, other social media platforms, or books.
Paid traffic: You can also place ads online and offline to drive traffic to your site. An easy way to start with ads is something like Facebook ads. You will be able to select a target market you want. For example, if you are providing an accounting solution to business owners you can select influencers who have business owners as part of their community and target those audiences.
If your budget is low focus on content marketing/organic traffic option. Content marketing means providing helpful free content for your target audience. Some of those people will be interested in learning more and purchasing your paid, more advanced, and in-depth products.
To help you build organic traffic:
Focus on just a few methods at the beginning to maximize your results.
And we conclude our steps to creating an online business with determining products/services and delivery.
At this point you need to figure out which products you want to start with. Depending on which products you decide to offer your delivery methods will differ. For many online business owners, the easiest product to start is often one-on-one consultations. For example, if you are an expert on how to build a social media presence you can offer one-on-one help to start generating some revenue while you are building traffic to your site and growing your email list.
You can also package some of the tools you developed for your personal use and sell those. For example, if you developed an excel model to help you track monthly expenses and keep personal finances in check you can sell that excel document on your website.
For downloadable products, you can use electronic fulfillment companies like Clickbank.com or E-junkie.com.
You can also start promoting digital and other products as an affiliate. For example, you can become an Amazon Associate to earn a small commission from each purchase made by someone going to Amazon from your website. In such case, the person using the link will not pay anything extra. You can see examples of such links at the bottom of this page.
Of course, there are other potential steps to creating an online business like diving deeper into marketing, establishing an expert reputation, tracking growth, writing a business plan, figuring out shipping and returns if you would like to offer a physical product. But the key steps to creating an online business are listed above so I recommend starting there.
Be prepared for a lot of hard work. There are tones of people out there. And there was never a time when it was easier to start an online business. So we are all competing for the same potential customers, the same attention.
Competition is coming. They want to take your customers, they want to take from you what you have. The more successful you are the more they will want to copy you. You constantly need to be thinking and innovating. You can’t get complacent. You can’t afford to be lazy.
We all have the opportunity to start an online business. It does not mean everyone will be successful. Most people will not be willing to put in the work. Running your own business is NOT easier than working for someone else. But, in many cases, it offers better financial security, better financial rewards, and better opportunity to fulfill your life’s mission.
Take care, Kris
When people think about the business strategy we often think about the field of strategy consulting/management consulting and firms like McKinsey, BCG, et al. If you are interested in learning how to conduct a management consulting engagement, you will likely enjoy this book. Succeeding as a Management Consultant is a book set in the Brazilian interior. This book follows an engagement team as they assist Goldy, a large Brazilian gold miner, in diagnosing and fixing deep and persistent organizational issues. This book follows an engagement team over an 8-week assignment and explains how they successfully navigate a challenging client environment, develop hypotheses, build the analyses, and provide the final recommendations. It is written so the reader may understand, follow, and replicate the process. It is the only book laying out a consulting assignment step-by-step.
Bill Matassoni’s (Ex-McKinsey and Ex-BCG Senior Partner) Marketing Saves The World is a truly unique book. Never before has a McKinsey partner published his memoir publicly. This book is a rare opportunity – a true exclusive – to see what shapes the thought process of a partner and learn about marketing and strategy. The memoir essentially lays out McKinsey’s competitive advantage and explains how it can be neutralized.
Turquoise Eyes started off the groundbreaking new genre developed by FIRMSconsulting that combines compelling narrative while teaching problem solving and critical thinking skills. Set after a bank begins implementing a new retail banking strategy, we follow Teresa García Ramírez de Arroyo, a director-general in the Mexican government, who has received some disturbing news. A whistleblower has emailed Teresa with troubling news about a mistake in the loan default calculations and reserve ratios. The numbers do not add up. The book loosely uses the logic and financial analyses in A Typical McKinsey Engagement, >270 videos.
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