How To Start An on-line Business

Starting an on-line business has many advantages over a physical retail store. I’ll tell you more about one major advantage later on. But first, let’s help you understand what mindset it takes to start an on-line business.

It’s not the same as starting a brick and mortar outlet. If you want to start a physical retail shop in the heart of a city there is plenty of help available. But for starting a business that is solely on-line and getting good advice, it can be a nightmare.

To calm the nightmares and make your E-commerce dream come true, here are some simple but important rules.

Rule #1: It’s never passive income

Most people, when they start an on-line business are looking for a passive income source. They want a system in place that automatically imports products from a drop shipping account, sends out massive emails, self-advertises on social media, and does everything else for them.

But E-commerce is never passive.

You may have read about passive income ideas for your on-line store. Catch words like drop shippingaffiliate marketing, and click tunnels catch your attention. And the sales pitch is that once you are set up, that’s all you have to do.

It’s simply not true.

Any successful business takes real work on your part no matter how much you outsource to someone else.

The rules for what works for passive income are exactly the same as for non-passive income ideas. In other words, people that use click tunnels successfully are successful whether they use click tunnels or not. That’s because they offer real products or services they are passionate about.

They LOVE to work on their business and have a real product or service that offers helpful solutions and value to their customers. Tools like click tunnels help make the job easier. But success lies in the business owner and marketer, not the tools.

Real products and/or services start with a good idea.

Much research, analyzing, and seeking advice needs to be done to vet that idea.

Not only will you discover if your idea is a good one or not, you will also be able to help safeguard against leaving money on the table.

Don’t Leave Money on the Table

About three years ago I worked on a security project for an American bank. They wanted to offer a new service to their clients that would monitor the dark net for stolen credit card information.

The project was pretty straight forward …

Create an automatic search bot that would scan the hidden web for their clients’ credit card information and report any they found. That was the request from the bank. The bank used the service and were happy with it.

Their clients were also happy that the bank was looking out for them. But it turned out the bank missed an opportunity to increase their business. They found other credit card owners on the dark net, but did not send a report to those owners. Don’t you think those owners would have been thankful for that information? And perhaps switched over to their bank increasing the banks profits.

Tools don’t create success, people do. Using tools to the best advantage is something that is done by the business teams, whether in-house or outsourced. It takes hands-on involvement to run a profitable business.

Tools help, people succeed

Choosing a tool like the Internet over a brick and mortar retail outlet has its advantages when done right.

On-line businesses have …

  • Much lower startup costs
  • Lower overhead
  • Can be located anywhere
  • Can be operated even when traveling
  • Accesses a local or global market easily

If you choose a brick and mortar outlet your first consideration is, “location, location, location.” For on-line businesses your first consideration is not the location so much, but remembering there is still work involved. It’s not passive income. You have to show up for work as though you had to unlock a store every morning.

Therefore, it is of utmost importance to still vet your on-line business idea with as many advisors as you can. These advisers can be anyone. In fact it is best practice to get as many diverse opinions you can from as many different kinds of people as you can. Each will have a different viewpoint.

  • Some will be encouraging; ask them why?
  • Some will think your idea is not worth doing. Be sure to ask them why, too.
  • Both have value.

Whatever advice you get, it is vital to place them in one of two categories:

  1. Do you want them as a client?

One of the temptations when going into business is to try to please everyone. But you can’t. Some people are simply poor matches for what you are doing.

Your business should have a symbiotic relationship with your customers as one of its first goals …

  • Your customer has a problem
  • You have the solution.

When you get encouragement from someone you want as a customer, it feels great!

When you listen to a discouraging word from someone you want as a customer, it doesn’t feel so great. But ask them “Why?” and carefully consider their idea and bounce it off others. It may save you a lot of headaches if you listen.

At the same time, when a person is discouraging to your idea, but you would NOT want them as a customer, it probably means you are on the right track.

  1. Do they know what they are talking about?

It is one thing to get advice on your product idea from someone who would actually buy it. But often they may not understand what goes into it before they see it on a web page.

It is another thing to get advice on the practical end of things – such as the manufacturing of the product itself, delivery concerns, or customer support. But be sure to include practical advice from other business owners outside of your niche. Joining a peer group, or a business association is a good place to start. Being involved with people other than in business groups can be useful for getting a real world-view on business, like the classic golf club membership. And it helps to keep your life-work balance, well, er … balanced.

RULE #2: K.I.S.S. Keep It Simple for Success

As you develop your business you need to remember to, “Keep It Simple …” At this stage of the game you are at high risk to being your own worst advisor.

It’s worth repeating … you need to vet your ideas by getting other people to look at them. This should include …

  • Your business idea
  • Your target market
  • Those you think wouldn’t want your product or service (Your advisor might disagree)

There is an ancient, but true statement:
Where there is no counsel, plans fail.

Your Business Model

So, how are you going to generate revenue and profit? This is what your business model will tell you.

One way to examine your business model to see if it is a good one is to compare it to others like a brick and mortar, a mobile business like a food truck, an on-line subscription, franchise, etc.

Compare …

  • What overhead costs would incur
  • What products and services you are going to offer
  • How you will offer it to the public
  • Who is your target audience
  • How your product and/or service will be sold
  • How to acquire income

By using other business models you can see if your idea is best suited to the on-line world or not.

And you just may find a way to make your on-line business MORE simple.

Your Business Plan

Once you are secure in knowing what model you wish to use, make sure to create your business plan.

Your business plan is the starting point to get feedback. It helps to refine your idea. It’s a sales presentation to others that may be interested in investing in your business, or for you to acquire an investment loan.

Outline your business objectives at the start. Keep it simple. A list of purpose items that you want your business to provide. Included in your business plan is your business mission. This describes the reason for your existence.

What do you want your customers to remember about your business, products and services? It doesn’t have to be long winded. Your business is literally an extension of you. Your business mission should be your key part in the plan.

Plan out and state your start up expenses

Cover how you will have funds for the first two years of the budget. Review and update it often. No matter how well you plan the budget out, you most likely will need to adjust it. But it is needed so that you can better predict the future of your business and how well you are staying on track or slipping off.

Keep a ledger of revenue that comes in, and expenses that goes out. This will allow you to see your progress and shortcomings.

It will teach you where you are going wrong before it becomes a disaster. Everyone makes mistakes. Success comes from learning those mistakes and correcting.

The ledger is the most important business tool you can do on a daily basis. It’s simple, straight forward, and helps avoid a lot of headaches. If the only thing you do in your business besides work on your passion, is to keep a ledger, you’re already ahead of the curve compared to a lot of other businesses.

Your Marketing Strategy

Outline a basic overview of your marketing strategy. Focus on your S.M.A.R.T. goals. These are …

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Timed

See examples here.

Identify your target audience and customer

This is easier if you can create a fictional, but accurate description of your customer. This Persona should be who you are thinking about as you create your website content, marketing campaigns, nurturing emails and other promotional materials.

It becomes much easier because you know who your reader is going to be.

Some things to include in your Persona Profile

  • A head and shoulders shot to make them come to “life”
  • Descriptive name for your Persona.
  • location
  • work title
  • age
  • what motivates them
  • what their biggest headache is
  • goals

This helps you to have a natural conversation that flows into your content. Giving your Persona a name helps you to keep that focus, like Marketing Mary, or Cross-Trainer Bill

But remember, from time to time, you also will have to deal with people you do NOT want to be your customer.

Some reasons you may not want a customer might be …

  • Too advanced for your services
  • A student that is only looking for educational information
  • Just looking for free stuff
  • Propensity to churn

At the very least, you should provide enough information to help an expert you hire to know where to start.

You can find more information about your Persona by checking out social media. Use those questions they ask in social media comments as a topic for your blog posts. When they do a search in Google, there you are answering them in your blog post!

Google Trends can also provide more insight in the drop-down menus containing other keywords your targeted customer may be searching for. You can check out government census sites, real estate marketing information, and competitor websites for more ideas.

Just remember to stay focused on your goals and target audience and your business will grow.

RULE #3: PASSION is the key to success

Ever had a job you hated? Could you imagine working that same job for half the pay and twice the hours? If you are not working on your passion today, find your passion in the on-line world. That’s your future in your on-line business. You want to want to work on it. And as necessary as it is to work within your business model, you do not have to do everything. Just what works for you. But you will have to do what is necessary. So be passionate about it. Just recognize when you can do it and when you need to hire a professional.

For example, anyone can run any kind of an on-line business as long as they are passionate about it. If you create custom jewelry and want to sell it on-line make the jewelry, but hire a web developer and content writer to build your website. Hire a marketer to write your advertisements. Hire a salesperson to do the cold calling, an accountant to do the bookkeeping.

Stick to the key of your success, creating your jewelry – your passion.

RULE #4: Keep up-to-date with rates

One of the most common causes of business failure is the lack of understanding to price it right.

A common practice for companies when they are searching for new products or services to offer is to know how the competition is pricing. Too high and the risk is not to be purchased. Too low and the risk could be a lack of trust in the quality or customer support.

Knowing your competitors rates allows you to set your prices somewhere in the middle where it usually feels just right for the buyer.

Another method is based on cost of materials.

I successfully ran a painting company using this model …

  • It was easy to figure out our costs of supplies based on the square footage of the space to be painted.
  • The total time spent on a house was also taken into account by the amount of the paint that was needed for the project. It was a constant.
  • Allowing for the markup you will know how much time and other costs it will take you to produce the final offering


Materials for any product you create would also be a constant. Take into account your time, markup and shipping. etc. and you will have a good ball park fee to work from.

If your on-line business is a service with no physical product, the same type of thinking can be applied. Your time, plus, overhead costs, plus markup, etc.

Basing your prices on items that you cannot control, like materials you purchase or overhead costs like computer, phone, etc., means that you will never undercut yourself as the costs increase.

Often in brick and mortar stores as opposed to the on-line world, retailers will mark up their prices on products based on the area clientèle. A store can increase the price of a jacket in a high society area. But it’s franchise in the low income area will tend to sell either the same jacket or lower-quality version of it for a fraction of the price.

This strategy doesn’t work as well on the World Wide Web since every customer is just one click away of looking for a better deal. Being honest in your prices is the best way to keep and retain the customers you want.

RULE #5: Keep the good clients

However, there are also customers that you may not want to have. Another reason new startup businesses may fail is that they try to keep everyone happy all the time. Every on-line business has had at least one client that has cost them too much resulting in no profit. And there are those lovely customers that are very profitable. Knowing the difference between a cost client and a valued client is an important skill to develop in the on-line world.

How to nurture your valued clients

Keeping the clients you want is the trick that will make or break you. The first step falls on the shoulders of your sales staff. Even after the sale has been made they have to keep in contact with the customers on a regular basis. This is easier to do for brick and mortar type businesses that customers pass on their way to work in the morning (think donut shop), but not as easy for on-line stores.

Between email filters, competitors’ advertisements, and many on-line distractions, keeping a customer becomes an all important task to stay on top of. Sometimes, the best way to do this is just to pick up the phone and call them. Reply to emails as soon as you can, and provide awesome customer support.

Another approach to getting and keeping good clients is to give things away for free. If the free stuff has real value your clients, they will come back for more.

Your free giveaways can just be information to educate your customer on your services and products. This can be done in formats like PDF downloads, info-graphics, slide decks, videos, and more.

But remember to keep focused on your passion. You’re an expert in that area and your passion will be contagious. Whatever you learn about in your passionate industry, will make it much easier for you to communicate and attract the attention of your customer, just because you are so passionate about it.

Your customer will sense your passion and want your product or service because of it. They want to feel as good as you do about your business.

RULE #6: Branding versus Trademark

People love brand names. Even when they hate a particular brand.

And that’s the point. Brand names create authority and trust in customers. When that trust and authority breakdown, people will dislike your brand.

That’s why customer service is a top priority when it comes to your on-line business. The more satisfied your customer is with your product, your guarantee, and your support, the happier he or she is … and the more profitable you will be.

When you trust a brand and purchase its product or service aren’t you more likely to become interested in any new product they offer?

Think of Apple. Not the fruit, of course. But the company that dominated the consumer world with innovative products of user-friendly, reliable phones, computers, and tablets … well, er … iPads. Anytime a new product is advertised hundreds of people line up outside Apple Stores on release day to be the first to purchase.

Branding isn’t the same thing as a trade mark.

Apple is unique in that it merged the definition of brand and trademark into one. Is the apple with a bite out of it the brand or the trademark?

It’s the logo, you say.

That’s simply another example of how unique Apple is. Mentally, people merge the logo into the other two and remember, Apple, no matter what it is. That’s branding!

Just as a rancher can take a hot iron and brand a steer, Apple has branded many of their products so successfully that they are familiar to the average person on the street.

Think of the “tablet” mentioned above. Doesn’t iPad come so much more naturally to your mind when it comes to an Apple tablet?

And when people do think simply of a “tablet” they know immediately it is not an Apple product. Wow! Don’t you wish you could do that? (If you want to take a look at this list of Apple’s trademarks have fun.)

So, what is the difference between a trademark and a brand?

Your brand is two-fold. First, it represents who you are in the public eye. Can your reputation and business be trusted?

Second, your brand is a visual reminder that your company is in business. It could simply be your name and/or a logo design that is stamped on every product you make. That doesn’t take much time to set up at all.

Your trademark is the legal protection of your branded items granted by the Trademark and Patent Office. It takes three months to a year to get this done.

Stamping your brand on your products and protecting them legally take relatively short times. But “building your brand” of goodwill and reputation can take years.

Keep in mind the lessons learned about branding

As you go about building your on-line business, be aware of who is out there to offer you your needed materials and services.

For example …

Big corporations often have hidden sub-industries attached to their business. GoDaddy, a well-known domain and website host provider is owned by GoDaddy Group Inc.

However, there are many brands that operate from larger corporations, like Endurance International Group. Here are three under EIG.

  • Hostgator
  • Bluehost
  • Sitebuilder

If your business website were hosted on one of the above three hosting companies and you had a bad experience that could be resolved that easily, you probably would want to move to another hosting company. What if you were to move to one of the other two?

It would not affect EIG at all. They are safe from being the owner of the bad brands and end up not losing their customer at all.

If GoDaddy were to offer poor service (which they don’t … they have a good reputation) and they lost a customer, they lose. If they suffer bad publicity over the issue, their single brand would be harmed.

However, which one would the customer rather choose? EIG or GoDaddy? EIG has vested interest in multiple brands that offer a variety of services. But GoDaddy is dedicated to to a single brand of website services. Their reputation is at stake and that makes them a much more transparent and trusted company to deal with.

Keep this in mind when you search for your own materials, services and suppliers as you build your on-line business.

RULE #7: Go where your treated best

As mentioned, at the beginning of this article an on-line business has a huge advantage over brick and mortar models for a business. The major advantage is being able to go (virtually) to where you are treated best.

An on-line business can setup anywhere but take advantage of tax laws in a jurisdiction that treats you better than where your residence is.

You can also physically move your family from city to city, or beach front to mountain side, but your on-line business remains stable.

Say, for example, you want to register your business in California to take advantage of the high population, or Delaware for low business taxes, where you live will not effect the location on your on-line business.

Meanwhile, your on-line presence can continue to grow as you create your website content from anywhere, boosting search engine results through proper optimization and targeting your identified audience no matter where they are geographically.

You also have the added advantage of using banks in your chosen state that might not be available to you otherwise.

But it’s not just your business you need to think about. What about your other services that you need?

  • Would you get better bookings from New York?
  • Do you have an manager located in Texas?
  • Team members spread across the country?

Going where you’re treated best includes taking advantage of multiple different locations for the various needs of your business. Without a central hub like Mozart Services, it can become complicated and more time-consuming and expensive to fit all the pieces together smoothly.

RULE #8: Knock on the door

It’s been said that people make decisions with their hearts and justify them with their heads. You need to make a connection between your business and your clients. That connection can be anything, literally, but it has to be there.

I know of a guy that was out of work for an extended period of time. He had placed resume after resume at various places that he was qualified for, search the classifieds, going to various agencies and done all the things that your suppose to do to get work. He just didn’t luck out. Eventually, he was at the end of his rope, and decided that the regular route just wasn’t working for him, so he changed tactics. He joined a gym. His career had nothing to do with the health industry, he just liked working out. It was his passion. It didn’t take to long after that, that he landed a dream job. He had made connections at the gym, and they paid off.

Your passion is your in. All you need to do is let people know it, and make a connection to your clients. That’s where not only marketing comes in, but all also picking up the phone and calling people, knocking on doors, and delivering fliers… what ever works in your niche. Don’t let yourself get discouraged by the nay sayers, but learn, just as you did while making the business plan, what it is that works, and what doesn’t.

RULE #9: The success trap — learn how to fail

There is one fatal trap that most consultants for new businesses fail to mention, success. Success is never permanent, it has to be remodeled and re-assessed from time to time. If you were a manufacture of toys in the 80’s and happened to land a contract for “The Little People”, you wouldn’t know it but you’d be living the dream when the name changed to the “Cabbage Patch Kids”. But just having a major success doesn’t mean your business is a success, Coleco1 was that company that landed the contract in 1982, made millions, and than filed for bankruptcy in 1988.

Would you fire an employee for making a mistake that cost your business landing a million dollar contract? Most people would say yes, but ask yourself if you think that same employee would ever make that mistake again, compared to a new employee that didn’t know what the mistake was. This is why failure is so important in being successful. Failures create a learning experience that you just can’t buy, and if learned from prevent those same mistakes from happening again. Learn how to fail by letting yourself fail.

RULE #10: Know what you’re good at — outsource the rest

Have you a mindset for business?

New businesses today need to look at what is successful in today’s market and follow their lead. It might be that you have an awesome business idea, but has it been tried before?

Do not make the same mistakes others make. Skip the heartache. Do what successful companies are doing now … following their passion. They work really hard at what they want to work hard at and pass the rest that needs to get done onto others that actually like doing the things that they don’t. (Yes, there are people who like dealing with taxes! Or websites. Or whatever you dread.) Don’t spend your energy and sweat doing things you don’t want to do. It doesn’t do you or your customers any good.

Let’s make this simple. Your business right now has a problem that needs fixing, otherwise you wouldn’t be reading this article. Even if you haven’t started your business yet, your having a problem trying to figure out where to start, so to make things simple…. Open a help ticket on this site, tells us what it is that you need help with, and we will see what we can do for you. We are your major advantage, because we don’t just host your business site, we solve the challenge of your online business so you can work on just your passion.

– Dan Wolfe