Skip to content

How to Start an Online Business From Home in 2021

Article by Thomas J Law

Starting an online business isn't easy. There are so many important decisions to make. What should you sell? Who should you sell to? How will you get customers?

If that's not enough, every other week there seems to be a new business trend online. There's chatbots, cryptocurrencies, Facebook ads, Instagram influencers, and many more. What should you pay attention to? What actually matters?

If you want to know how to start an online business from home in 2021, we've got you covered. In this quick and simple article, we'll take you through how to start a small business online, step-by-step.

#1: Don't Start Building Yet

When looking to start a small online business, it can be tempting to jump into action.

So, if you're feeling the urge to build a website, choose a business name, or create a logo, hold off for now.

If you want to start a successful online business, first, you need a strategy. And steps two, three and four of this article will show you how to create your online business strategy.

#2: Choose a Business Model

When learning how to start an online business from home, it helps to know about some tried-and-tested online business models.

Here are six types of online businesses to consider:

  1. Affiliate Marketing: Promote other business's products and services online, and receive a commission for each sale you make with this passive income idea.
  2. Freelancing: Provide a service to other individuals and businesses using a skill that you have, such as advertising, writing, designing, or programming.
  3. Coaching and Consulting: Become a coach or a consultant and sell your expertise, advice, and guidance.
  4. Information Products: Package and sell your expertise in ebooks, worksheets, templates, and online courses.
  5. Software as a Service (SaaS): Create a piece of software or application, and charge users a recurring subscription fee.
  6. Ecommerce: Use a service like Shopify to set up a website and sell physical products online.

Want more online business ideas to help inspire you? Check out our guide, "Business Ideas That Make Money".

#3: Identify Your Target Market

Next, you need to get clear on your target market. In other words, who are you going to serve?

This step is absolutely vital.

As the marketer Philip Kotler once said, "There is only one winning strategy. It is to carefully define the target market and direct a superior offering to that target market."

Here's the trick: Make sure you are part of your target audience.

Think about it. If you've been camping your entire life, you'll understand the problems, desires, and language of other campers. As a result, it'd be much easier to sell camping products online. 

Plus, your marketing will be more successful because you'll have a better understanding of how to communicate with other campers.

On the other hand, if you've never been camping in your life, you'd probably struggle – a lot – to sell camping products online.

So, when choosing a target audience, ask yourself:

  • What are my hobbies and interests?
  • Is there anything that I know a lot about?
  • What do I spend most of my time thinking, talking, and reading about?

As the business consultant Peter F. Drucker said, "The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself."

#4: Find a Problem to Solve

When learning how to start an online business, it's important to note one key thing: all businesses solve a problem.

Plumbers fix leaking pipes. Hollywood movies fulfill people's boredom, curiosity, interest, and the need to escape and relax. Clothing brands help people express themselves and feel attractive.

Here's the golden rule: The bigger the problem you can solve – and the better you solve it – the more money people are willing to pay.

For example, take healthcare services. They solve a big problem, which is why almost everyone is willing to spend a lot of money on it. 

On the other hand, not many people will pay you to stop their table from wobbling. It's not a big problem, and they don't need help solving it.

Bottom line: If you want to identify how to start an online business, you need to find a good problem to solve.

Here are three examples:

  • Target market: Fashion-conscious teenage boys
  • Problem: The fashion-conscious want to stand out from the crowd without spending too much money.
  • Solution: Create a clothing line that's flamboyant and budget-friendly.
  • Target market: Marketing managers at multinational software companies.
  • Problem: Businesses need to drive traffic to their websites.
  • Solution: Write articles that rank on the first page of Google to drive traffic.
  • Target market: Working Moms with young children.
  • Problem: Many moms want to work out regularly, but they don't have much time.
  • Solution: Create a time-saving fitness program and schedule.

How can you find a problem to solve?

  • Join Facebook groups and online forums and ask people what they need help with.
  • Use Google Keyword Planner to find out what people are searching for.
  • Find successful online businesses and identify the problem they solve, then look for ways to do it better.

#5: Build Your Sales Platform

Once you've identified your target audience and the issue you're going to help them solve, it's time to build your platform.


Well, if you plan to start an ecommerce business, build a website with Shopify and then find products to sell with Oberlo.

If you plan to start freelancing, coaching, or consulting, Shopify has the option of plugging in many popular tools like Digital Downloads to sell digital products online, ReCharge to sell subscriptions online, and SendOwl to sell videos online. 

Keep things simple.

At this point, your business is still in the realm of theory. So try not to invest too much money, time, or energy into building a perfect website.

Instead, test your business idea and make sure it works before you invest.

Eric Ries, the author of The Lean Startup, said, "We must learn what customers really want, not what they say they want or what we think they should want."

#6: Choose a Marketing Method

When you’re ready to start promoting your online business, you need to choose a marketing method.

There are many different online marketing methods out there. However, when it comes to learning how to start an online business, some are better than others.

Here are four online marketing methods that you can use to land sales relatively quickly:

  1. Social Media Marketing: Use social media to create and share content, engage with your target audience, and drive traffic to your website to land sales.
  2. Direct Outreach: Reach out to individuals at companies to pitch your services.
  3. Paid Advertising: Advertise on platforms like Facebook, Instagram, Google, and YouTube to increase brand awareness and drive sales.
  4. Influencer marketing: Team up with influencers to promote your products directly to their existing followings.

Summary: How to Start an Online Business?

Wondering how to start an online business from home in 2021? Here are six steps to starting an online business:

  1. Create a good business strategy before you start building things.
  2. Choose an online business model that suits your skills, interests, and preferences.
  3. Identify your target market – and make sure that you are part of it.
  4. Identify a problem that your target audience has, and find a way to help solve it.
  5. Build a basic sales platform to test your business idea.
  6. Choose a marketing method and start promoting your business.

Finally, it can take a while to learn how to start an online business successfully.  So don’t worry if your first online business doesn’t take off immediately. Many of the most successful entrepreneurs failed multiple times before achieving success.

As the co-founder of Apple, Steve Jobs, once said, “I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.”

Want to Learn More?