If you’re reading this, you’ve probably already been brainstorming online business ideas — and for good reason.
We’re living in a time of heightened financial fear, and I’m sure many of you are struggling with insecurities about employment, as the pandemic and automation are pushing people out of the workforce.
More so, we’re seeing inflation rates skyrocket and wages aren’t adjusting in proportion. These are scary times, indeed.
This is why it’s more important than ever for you to start developing methods to generate your own income. You can’t depend on a “steady job” anymore (there’s no such thing).
How to come up with online business ideas:
Ready to get to work?
One of the most common pitfalls for new content entrepreneurs is that they don’t know how to come up with online business ideas. It’s not enough to say you want to start a business, you must also have a plan.
In this article, I’m going to share seven online business ideas, and I’ll detail the pros and cons of each method to help you shape your plan. Let’s start with …
The two types of online businesses
Although specific methods and strategies can vary, there are only two core types of online businesses. They are:
- Selling a service
- Selling a product
Any online business idea will fall into one of these two categories. First, we’ll begin with freelance services.
Freelancing is one of the best online business ideas.
Offering a service doesn’t require you build a fancy website, invest money into marketing, or raise capital to build your product.
As a freelancer, your first and only priority is to get a client. At most, you need a laptop and a willingness to get started. Now, there are ways you can approach freelancing to maximize your chances of success. Let’s look at three critical steps.
Step #1: Decide on the exact services you provide
Everyone has skills, and you have plenty to offer the market.
Are you creating a writing business? Starting an accounting firm? Are you a killer photographer or a whiz at social media marketing?
Decide on the services you’ll offer, and create a plan for how you’ll present these services.
It’s tempting to want to create packages and productized services(and I highly recommend you do at some point), but in the beginning you want to take on all of the business you can to gain the most experience.
Over time, your reputation will build and your referral business will start generating bigger profits.
At this point, you can start to charge more for your creative work and be more selective about the clients you want to work with — as well as possibly say goodbye to a current client you might have outgrown.
Step #2: Build a brand for your online business idea
Once you have a few jobs under your belt, it’s critical that you begin marketing your services.
The biggest mistake freelancers make is that they sit back and wait for business to come to them. You have to actively get out there and market yourself to get new clients faster:
- Create a website
- Generate awareness through business blogging and social media
- Demonstrate how your services can benefit your target prospects
Step #3: Transition to building an agency
Freelancing is great, but it can only get you so far.
Eventually, you’ll have more business than you can effectively serve. The last thing you want is unhappy clients and it’s very common for freelancers to get in over their heads.
That’s why you want to be actively replacing yourself as you grow.
For some of you reviewing the different types of online business ideas, staying small and flexible is what you want.
You want to work with a few clients and do freelance work on the side. If that’s your goal, then great! I support you.
But for those of you who plan to transition from a freelancer to an agency owner (with employees, departments, payroll, etc.), I suggest you plan for this transition right from the beginning. To summarize, freelancing is the perfect online business idea to get you started, because it doesn’t require any upfront costs and it’s profitable as soon as you get your first client. But as is the case with any service business, it won’t have the same scalability as other online business ideas.
2. Paid newsletter
I love paid newsletters, and I think they’re one of the best options to get started.
Paid newsletters are great because they’re straightforward. They’re one of the only online business ideas that don’t have a separation between the content you create to market the product and the product itself.
In freelancing, or SaaS products, or even membership communities, the content you create is used to grow awareness to a product or service. But with newsletters, the content itself is the product.
This makes it much easier for you to stay focused on your writing. You can put your full focus on creating the best newsletter possible without having to get into the weeds with other management tasks.
One of the most exciting aspects of starting a paid newsletter is the monthly recurring revenue, or MRR.
Any online business idea that monetizes with MRR is worth considering because consistent cash flow will generate.
This is especially attractive because a paid newsletter can be highly profitable and engaging. There are plenty of examples of people making six figures or more without needing to hire a single employee.
Paid newsletter downsides as online business ideas
For most people, the biggest drawback of paid newsletters is the commitment.
If you sell monthly, or even yearly subscriptions to your newsletter, that means you’re on the hook to deliver that content to your customers … no matter what.
As writers, we all know how hard it can be to have fresh blog post ideas and new articles published on a regular basis, but if you decide to go the route of a paid newsletter, you’re going to have to push through it.
3. Membership communities
Membership communities can be extremely profitable and fun, and you have an opportunity to deliver amazing value to your community members.
A good example of a membership community is Copyblogger Academy. Our members pay a monthly fee, and as a result, they get access to premium courses, live masterclass sessions, events, and V.I.P newsletters.
Similarly to newsletters, membership communities have great scalability, because you can add more members to your community without having to increase your expenses.
In addition, you can typically charge much more money for access to a paid membership community than you can for access to a subscription.
Typically, paid newsletters can range anywhere from $5 to $15 a month. But membership communities can range anywhere from $15 a month all the way up to $500 a month (and sometimes even more).
Membership community downsides as online business ideas
One of the issues you’ll discover with a membership community is that it’s a grind. A membership site is an engine that never stops running, so you’ll be constantly creating new content, putting together new videos and materials for your members, and finding ways to add value.
4. Digital products
There’s a huge demand for digital products, especially information products that teach your customers new skills that they can use to advance their own lives.
Typically, one of these online business ideas comes in the form of a course or ebook.
What’s so great about these products is how easily this business model can be automated.
Once you create your product, you don’t have to continuously spend time improving it in the same way you would for a membership community.
Once you create your course, you can focus all of your efforts and resources on selling the course.
If your product provides exceptional value, in many cases your customers will promote it for you by giving shout- outs on Twitter or even mentioning your product on their blogs. When this happens, your product can take off and you’ll see fantastic sales results.
Downsides of digital products as online business ideas
The biggest downside to creating a stand-alone digital product is the huge commitment needed to create the product in the first place. Designing and creating courses can be arduous.
For example, it took me months to plan, outline, build, record, and eventually publish Agency Clarity — but now I get to reap the rewards of social proof and automation. Let’s look at an example.
The benefits of automation
The reason why digital products are so scalable is because once you build the product, you can sell it an infinite amount of times.
You don’t need to create another product to sell another product, like you would for a physical product like a t-shirt. This simple, yet important distinction is what makes digital products so profitable and easily automated.
5. eCommerce online business ideas
Selling physical products used to require an unreasonable amount of resources.
As recent as 10 years ago, having an online ecommerce business meant that you needed to have:
- A custom-built website
- Third-party merchants to process payments
- Special banking access
- Warehousing and storage
- Custom-built tracking
- Inventory management
- Designers, photographers, and writers
It’s now easier than ever to build your own ecommerce business, and platforms like Shopify make it simple to get your business off the ground.
Also, there are lots of applications that make it easy to create products, store them, and ship them without ever needing to process the product orders yourself.
For example, if you’re starting a t-shirt business, Printful provides a solution that allows you to design an entire clothing line that’s stored and shipped for you.
A great example of this is a clothing line I started years ago called New Lyfe Clothing.
The company sells a few shirts every day, but Printful manages the entire product line. I never touch the clothing. I can focus fully on building the brand and creating great designs.
Other examples are the merchant resources Shopify and Etsy provide. If you’re able to build awareness around your brand, you can easily sell other people’s products as well.
SaaS is an acronym. It stands for “Software as a Service.”
Most of the online products we use today can be thought of as SaaS companies. For example, FreshBooksis an invoicing software that is considered a SaaS.
At one point, invoice management would have been a service that you had to either hire an employee for or hire a contractor to manage for you. Now, the software can facilitate the service for you.
SaaS businesses usually bill customers on a monthly basis.
Just like membership communities, SaaS businesses have a great deal of scalability because once you build the product, more members don’t require you to spend more money.
However, building a successful SaaS company is very difficult because the resources needed to design, code, and engineer a high-level software product is extensive.
SaaS downsides as online business ideas
Most of the time, SaaS businesses require investment capital.
Let’s use FreshBooks as an example again: The development costs alone to build a demo of invoicing software are very high.
With so many hurdles in the way, why would anyone want to create a SaaS company?
The reason is that they’re highly profitable online business ideas and generate huge valuations.
It’s not uncommon for SaaS businesses to lose money for the first few years and then hit a tipping point that allows them to generate huge profits.
In the cases of successful SaaS founders, it’s not uncommon for a payout of the hundreds of millions or even billions of dollars.
Many SaaS companies fail, but the ones that make it usually win big.
7. Affiliate marketing
What I love most about affiliate marketing is how simple it is.
But many people fail at affiliate marketing because they fail to understand strategy. Most affiliate marketers promote whatever products they can think of, in hopes of making some quick bucks.
Conversely, the way to achieve success in affiliate marketing is by finding a topic that has a passionate community, and then building a brand or an online business around that community.
In many cases, smaller communities provide the most opportunities, because small but passionate communities generally share product ideas with each other.
Here’s another affiliate marketing example
In 2020, Jonny Nastor approached with me an opportunity. He found an opening in the market for test prep.
Specifically, he discovered that people pay a lot of money on courses to help them prepare to take the LSAT. The LSAT is a very difficult course that aspiring attorneys must pass in order to practice law in the United States.
So, we bought a domain, developed relationships with companies that sell test prep products, and then started creating content.
Our content generates targeted traffic and those visitors read the reviews and guides we put together for the different test prep products.
This business is already cash flowing and, in time, we’ll probably sell it and make 10X what we put into it.
It’s a straightforward and simple strategy, and the best part about affiliate businesses is that you don’t need to create any products yourself, which allows you to focus your attention on writing the best content possible.
Use your online business ideas to future-proof your income
If you’re using content marketing and copywriting to build your online business, you’ve probably already realized an unpleasant truth:
We live in a day and age when there is plenty of outstanding content to consume.
Your ideal customers and clients literally have multiple lifetimes worth of content to consume, right at their fingertips.
So it begs the question:
Why should an audience choose your great content over the competition?
That’s where having a broad understanding of digital marketing comes into play. So you know how to command attention and differentiate yourself enough that your audience chooses you.
The good news is that we’ve narrowed down this range of competence to three core areas we teach each and every week inside.
It’s what I call the trifecta of core skills
Writers with a good understanding of these three skills end up with better, higher-quality clients who are happy to pay a premium. These clients are also more likely to give you ongoing work.
As a result, you’ll boost your income substantially.
Without working more hours. Without scrambling to find new clients all of the time. And without stressing about where the money to pay next month’s bills will come from.
Business owners who implement these three core skills find that their businesses tend to grow more effortlessly. They attract bigger, higher-quality audiences who buy.
This makes growing and scaling your online business ideas far easier. Interested in mastering these three core skills?