Opening an online business can be a fantastic way to achieve your personal financial goals. It can come with less risk and cost than opening a physical business. But, it still takes a lot of dedication, time, and usually a financial investment to get your online business up and running.
Here are some questions you can ask yourself to gauge your readiness. See if you’re ready to launch or if there are other areas you can prepare as you plan to open a business.
What is a good business to start?
The best business to start is one that serves a specific need with sufficient demand. Beyond that, there is no one correct answer. There are thousands of different industries that support the global economy.
The next best business to start is one with a product you can easily sell. Some businesses will have high barriers to entry, like starting a new airline. Others will be easily replicable which can make it hard to stand out from the competition.
In general, knowledge commerce can be a great field to start a business in. Many people have unique knowledge and expertise that can be turned into online courses, coaching, or membership communities.
Plus, by selling digital products, you don’t need to invest in physical things like a storefront, manufacturing, or inventory. This can reduce the costs to get started. That’s why so many people decide to create and sell online courses as their ticket to opening a business.
When starting any business, make sure to do market research. Get a solid understanding of the size of the addressable market, the cost of substitutions, margins and profitability. These data points will help with your investment research to help you understand if it's worth jumping into the industry. Then, they will help you make the best decisions for your business.
What do I need to open an online business?
Opening an online business requires less materials and overhead than a physical business. But, you’ll still need to assemble, plan, or create some things to get off the ground. These could include:
- An online business idea: your product or service
- A marketing plan
- Business branding
- A competitive advantage
- A financial plan
- Software for your website, online store, payment processing, analytics and more
- A dedicated business phone number or office phone service
- Legal and accounting framework - check with lawyers and accountants to ensure you’re in compliance with your local laws about collecting taxes
The good news is that there are plenty of options to choose from to meet these needs. With Kajabi, you not only get an all-in-one knowledge commerce platform, but you also get access to beautifully designed website and email templates and product blueprints that can help speed up your time to launch.
What is my competitive advantage?
Your competitive advantage is what makes your product or service unique from other sellers or providers. This could be your niche, your personality, your branding or style, product quality, or more.
Don’t try to compete on price. It’s a race to the bottom. Someone else will almost always find a way to scale and undercut you, if there isn’t already a low-cost option available.
Many Kajabi Heroes sell courses on the same general topic. But, there are specific niches that make them unique. This helps someone resonate with a subset of customers with a specific need for that particular product.
For example, plenty of people sell online finance courses. But, there are Kajabi Heroes that sell personal finance courses for couples, finance courses for pet grooming business owners, or real estate investing courses. Dig deep to find your specific topic and use that as the jumping off point to determine your competitive advantage.
What is my risk tolerance?
Are you willing to give everything you have to make your dream a reality? Or are you more cautious and want to make sure you have backup plans?
No way is right or wrong. But, thinking about this before making large scale business decisions can help you stay on the track you see best for yourself.
Kajabi Hero Faye Ducut Calanigan of the She Is Power Club says, “If you commit anything less than 100% of yourself to a goal, you make it so much harder for yourself to achieve that goal. Make that decision right now to fully commit yourself to that goal and do whatever it takes to achieve it.”
How much time do I have to spend on my business?
Another important consideration that ties into risk tolerance is how much time you can dedicate to your business. Are you able to work on your business in your free time or are you going to have to sacrifice other potential income-generating opportunities to make time for it?
Think about your current schedule. Think about:
- How many hours a week can you realistically spend on your business?
- Are you currently employed, or is your time primarily spent in school or caretaking?
- Will you be able to consistently dedicate time to your online business?
- Are you going to adjust your other income-generating methods to make more time for your business?
Some people will have the time, resources, or risk tolerance to jump right in and put their whole attention to their online business. Others will slowly build it up in their free time.
Being intentional about which route you go. It will help you set your own expectations about when your efforts will pay off and how long it will take to achieve certain milestones.
Kajabi Hero Colin Sinclair McDermott of The Online Print Coach shares the story of starting his business then reaching his first $1,000 in earnings from his Kajabi site. He said, “10 weeks ago, all I had was an idea, now I've hit my first milestone.”
Do I have enough money saved to open a business?
Even an online business with minimal overhead needs some kind of funding. Starting an online business can come with a lower investment and provide higher margins. But, you’ll still want to save up some cash to cover payments for things like software, equipment, and covering your own personal financial needs until you have profits from your business.
Often this will come from personal savings. But how much do you need?
JP Morgan reported some interesting data about small business finance. They found that half of small businesses had less than one month of cash buffer. And, they found that the median small personal services business holds a cash balance of $5,300.
Many business experts cite the recommendation to have three to six months of operating expenses available in liquid assets. Many businesses do not, but those that do are better prepared by having some runway in case of a downturn in sales.
If the thought of saving that much money makes you fear you’ll never get your business off the ground, don't panic. Many knowledge entrepreneurs start laying the groundwork of their business while employed elsewhere. They only make the jump into working on their business full-time after they have the financial stability to do so.
Some other ways to get startup funding include small business grants. Or, some knowledge entrepreneurs will pre-sell access to their digital courses or membership sites before the content is totally complete to start capturing revenue.
When can I launch my business?
The next order of business is planning the timing of your business launch. If you set a timeline for a goal, you’re more likely to achieve it.
You’ve already thought through you have to dedicate to laying the business foundation, creating your product or service, building up your marketing. Then, consider how long it will take to arrange the finances necessary, and set a launch date.
It’s okay if this is months in the future. It’s better to be prepared for your launch than rush and stumble.
Some business owners will promote before they officially launch. For example, while Kajabi Hero Penny Clements of Penny in Your Pocket was building out the framework of the Kajabi Design Academy, she still used her website to describe the offer and build an interest list.
If you want to launch a business in 30 days, digital products are a great choice. It’s possible to lay the groundwork quickly with Kajabi. You can build a website, use the product generator to form the course foundation, capture leads, sell your first product, and launch email sequences to market and continue driving sales.
How should I market my business?
Marketing and advertising are critical to if a new business succeeds. It’s worth planning out how you will promote your business.
Regardless of the specific choices you make to market your business, one key marketing best practice is to diversify your marketing channels. You don’t need to use every possible social media channel to have a successful business. But, any business owner should spread the word about their products or services in multiple ways.
Here are some other elements to consider in your marketing strategy:
- Your connections who have strong networks that might refer traffic to you
- How many contacts you can gather to leverage email marketing
- How much you’ll dedicate to paid advertising
- Which channels your ideal customers are using to learn about new products and services, and where you’ll advertise
- Bartering access to your digital service to gain customer insights and initial fans
You may also want to consider hiring a marketing consultant who can help you get started, or at a future point when you have the financial resources.
Am I ready to open an online business?
As your launch date approaches, keep checking in with yourself about your readiness. Many business owners say that someone is never truly ready, but you’ll know you’re on the right track with a few key indicators:
- You have at least one product ready for sale
- You have a complete website
- You have marketing and branding assets
- You have funding either in savings, investments, or grants
- A plan to build awareness of your product or service with potential customers
Open your online business with Kajabi
Whether you are starting out with your online business as a side hustle or already a small business owner, Kajabi has the tools you need to build an online business. Kajabi provides you with the tools to sell knowledge products like online courses, membership sites, private podcast episodes, digital downloads, or coaching.
With Kajabi you do not have to worry about tech headaches like web development or broken integrations between multiple services.
You’ll get a website, templates, email marketing capabilities, contact management, analytics, and tons of support tools. Join our community of knowledge entrepreneurs who have earned $2.5 billion dollars in payment since 2010.
Start your 14 day free trial of Kajabi today. Still researching? Check out Kajabi’s free downloadable ebook guides on launching and growing a knowledge commerce online business!