We’ve looked at the two main types of home-based businesses (product-based and service-based). We’ve also planted the seeds to get your hamster wheel turning about which business to choose for making money online.
Now that you’ve got an introduction to how other people make money from home, we can get to the juicy part.
It’s all about you now.
Making money online is easier – and more fun – when you choose the right idea for your business. There are a number of ways to make money online, but which kind of business suits you best?
I can’t stress enough how important it is to think hard about all of your ideas and whether they’re a good fit for you in the long run.
Of course, we can’t all be millionaires from our favorite hobby. But picking an online business is about balance: you have to balance what you’re good at with what you actually enjoy doing. Otherwise it’s just another recipe for a job you dread every morning when your alarm goes off.
So, let’s think about how your talents, skills and interests can help you earn money online with your new business.
Do you have a gorgeous garden? Maybe you can start a gardening blog or how-to YouTube channel.
Are you obsessed with making salt water taffy? Consider a home-based candy business.
Is creative writing one of your top pastimes? Try ghostwriting for book authors.
For some people, going after their hobby or passion will be the easiest way to earn money online. However, it’s not that easy for all of us.
And that’s okay.
In this chapter, we’ll go more in-depth into the different ways to make money online and what it might take for you to try them. We’ll also talk about how to find the perfect business idea that fits with your lifestyle and interests, as well as some strategies to market your new business (because marketing is essential to making money, both online and offline!)
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2.1. How to Make Money Online: The Basics
We’ve talked a bit about the two main types of home-based business: product-based and service-based. To find the easiest way to earn money online, you’ll need to choose which one is better for you.
It’s important that you focus on just one opportunity – at least for now. If you try to do too many things at once, it just gets harder. The easiest way to earn money online is to devote your time and resources to one idea, rather than spreading yourself thin.
First, you’ll need to meet the goals you’ve set for the first idea (which we’ll talk more about in this chapter). Then, once you see real success, you can think about expanding into other ways to make money online.
First things first: should you go with product-based or service-based?
Deciding Product-Based vs. Service-Based
For some people, this decision is obvious. For many, it isn’t.
Here are some basic considerations:
Now that you have an idea of what each will be like, let’s talk about setting the stage in terms of your attitude.
An Entrepreneur’s Mindset
I’m probably not the first to introduce this concept, but…
Starting a business is hard.
It’s easy to get sucked into the false promises of making thousands overnight. But the reality is that most new business owners make a lot of sacrifices as they face a lot of obstacles.
In one survey, business owners reported their top challenges as:
- Lack of capital/cash flow (67%)
- Marketing and advertising (28%)
- Time management (24%)
Constant challenges like these are why an entrepreneur’s mindset is – and must be – a lot different than a consumer’s mindset. In the consumer’s mind, money is traded for stuff. In the entrepreneur’s mind, money (as well as time and other resources) is traded for assets.
And assets are the gift that keep on giving.
These can come as nights spent lying in bed, stressing over your website unexpectedly crashing. Or having to miss your child’s soccer playoff or dance recital. Or asking yourself if the payoff later will really be worth all the work you’re putting in now.
The bottom line is that making money online is hard work. To create a sustainable online business, you must be ready to work your buns off.
You’ll also need to be resourceful. Network. Talk to people. Pick their brains. Scrounge the internet for resources for entrepreneurs. Read books and articles about your ideas. Listen to podcasts and interviews. Take notes from what you see other people doing right or wrong.
Take a look at our article on 13 habits of successful entrepreneurs for more insight.
Having a flexible, creative, and dedicated attitude helps with every aspect of the process. It even helps before you’ve chosen your niche.
Which brings me to my next point.
2.2. Which Products Should I Sell?
Maybe you’re leaning toward a product-based business where you sell items instead of services. If so, you’ll want to do your research to pick good products.
Ones that are popular while still making profit outside of your overhead and operation costs.
Ideally, you find the sweet spot, which is a mix between:
- Industry growth
- Product demand and opportunity
- Customer lifetime value
Let’s discuss some different product types and how you can choose a good idea as you explore what can earn money online.
Commoditized vs. Niche Products
The first question to ask: will you go for a commoditized or niche product?
Commoditized product: Common, everyday items that we all need or use. These include clothes, food, toys for kids, sports equipment for adults, etc.
Think of the kinds of bulk manufactured stuff you’d find in big retailers and online shops. They might be made by big brands like Nestle, Pfizer, Kraft Foods, and L’Oreal.
Niche product: Specialized, unique products that serve a special set of customers. Niche products include one-of-a-kind products, handmade items like jewelry or desserts, and other items that aren’t usually available in big stores.
The kinds of stuff you’d find at a Sunday farmer’s market or an Etsy store. You know, made with love instead of a manufacturing plant.
[highlight]If you make your own niche products and you want to earn money online by selling them, then this will be an easy decision for you. You can skip ahead to Chapter 3, where we’ll talk about how to sell your products from home.[/highlight]
But if you want to start a dropshipping business or some other kind of ecommerce store, you have more things to consider.
How do you choose products that are hot right now, but will still be strong in the long run?
How to Find Products to Sell
When looking for ways to earn money online via selling products, there are some steps to follow for thorough research.
[highlight]Pro tip: As you’re going through the steps, write your answers and ideas down in a notebook or spreadsheet file. Trust me – you’ll be glad you did.[/highlight]
1. Do Some Brainstorming
When deciding what to sell online, ask yourself brainstorming questions like:
- What hobbies do I have, and what products are needed to support that hobby?
- Am I buying for leisure or pleasure?
- Do I find myself buying utility-based products for a specific function?
- Which products do I think are cool, but I don’t have the lifestyle to justify supporting them?
- Do I want to sell items like these, that I’d want to buy myself? Or do I want to sell items that I know people will buy, regardless of my personal preferences?
At the end of the day, these are the most important questions (so the answers should be yes!):
- Is there a real demand for these products at my needed price point?
- Can I profit based on the demand?
- Will I be able to fulfill all these orders, and do marketing, at a reasonable cost?
2. Browse and Observe Online
Take a peek at what the internet has to say about your initial ideas and how they stack up against trending products. Go to other online stores and look closely at their best sellers, promotions, and daily deals.
- Amazon’s Best Sellers
- Lazada’s Top Sellers
- Ebay’s Daily Deals
- LightInTheBox’s Top Sellers List
- Oberlo’s List of What to Sell Online
When something piques your interest, add it to your list. And check back frequently, as most of these sites update hourly or daily.
These stores have massive amounts of data. Use it to your advantage.
In addition to other online stores, check out social media channels like:
3. Check Google Trends
Google Trends allows you to see how popular a search term is over a specific timeframe you want to look at. This can help you validate your idea.
When choosing products to sell based on trend, you can choose from:
Products that have steadily been on the rise, maybe over several years. This shows increasing demand, but might mean that you have a lot of competition from other entrepreneurs who want to make money off that item too.
Products that have seen a sharp, recent increase in demand. You can capitalize off these new hot trends by being among the first in the market. But be careful: these can go out of style just as fast. If you don’t have a flexible business model, this can mean disaster.
Products that have had a steady line of popularity for a while. These are ‘safer’ products as customer demand seems stable. This might equate to good sales for you. However, the market might already be saturated with sellers and extra competition.
Products that are declining in popularity. It might seem obvious that you shouldn’t try to sell anything that’s declining. But in some cases, you could benefit from being the last seller standing. In this scenario, buyers will turn to you because it’s so difficult to find the product elsewhere. So, capitalizing on a fading trend could ultimately help you earn more money online.
4. Note Products to Avoid
Some entrepreneurs might tell you to stay away from fad items. Some might tell you to stay away from items that are declining in popularity.
The real secret is that there’s no hard-and-fast rule.
It will take some consideration and careful attention to detail when deciding how to make money online with your business. Each option has its special set of pros and cons that must be weighed.
But in general, there are a few things you should really stay away from.
These include items that are:
- Highly regulated
- Blacklisted by your payment processor
Don’t Make a Rush Decision
You’re probably excited to start making money online.
But don’t rush it.
What’s popular today may not be popular tomorrow. You don’t want to set up a business that will just blow over in a few months.
This is what happens to business owners who start their business too soon after they ask the initial question, “How can I make money online?”
If you’re serious about making real money online, put a lot of thought and time into your business idea.Take the time to really explore what’s practical and realistic.
2.3. Which Service Should I Offer?
You could say that choosing a service niche is a bit more ‘personal’ than choosing a product niche.
In a product-based business, your brand and reputation is built on your storefront. But in a service-based business, your brand is often you. It’s your identity.
It’s also different because offering a service means that you’re not going to earn money online unless you’re actively performing that service.
So just a warning: if you don’t really enjoy what you’re offering (or you’re not at least comfortable with it), you might find yourself unhappy or frustrated down the road.
With that said, you should be looking for services based on a Venn diagram model of three intersecting traits:
- What people will pay for
- Things you enjoy doing
- Anything you’re good at
Ideally, you’ll be able to choose a unique service business idea that fits all three. But you should aim for two at the least.
Let’s look at how to slice and dice these elements.
How to Choose Your Service Niche
Here are some steps you can follow when you’re learning how to choose a service niche to earn money online.
[highlight]Pro tip: As with any brainstorming, research, and critical thinking activity, make sure you’re writing these down so you have a physical list. Make a literal Venn diagram to see where your ideas intersect![/highlight]
1. Brainstorm Your Interests and Talents
To identify your interests, hobbies, and passions, ask yourself questions like:
- What do I like to do in my free time?
- Which books, magazines, newsletters, websites, TV shows, podcasts, etc. do I prefer? What’s their typical subject matter?
- What do I look forward to most during my current work day?
- Are there any work projects where I go above and beyond, just because I want to?
- How do I express my creativity at home? At work?
- What has always seemed fun and interesting, but I never had the time or resources to learn more about it?
- Do my hobbies align with common hobbies that make money online?
To identify your talents, ask questions like:
- Which work tasks are easiest to me, which others might struggle with?
- What skills have I learned quickly without needing to put in too much time or effort?
- Which skills am I often complimented on?
- What do people come to me for help with?
- Going back to my academic days, which subjects was I always good at? Which classes did I enjoy most?
- Do I have any of the common skills that earn money online?
Now, you can use these as more ammo to answer the question, “How can I make money online?”
2. Look for a Specific Problem to Solve
The best way to catch potential customers’ attention is to tell them exactly how you can help them.
In many cases, clients aren’t necessarily looking for ‘a digital marketer’. Instead, they’re asking, “Who can manage my company’s social media pages?”
Take your skills and interests and apply them to specific, actionable services that clients need. This way, you’re in a much better position to beat your competition and start earning some money online.
Look for problems by doing things like:
- Having interviews and conversations with people who are in your target market. Do you have a friend or colleague who needs graphic design work done? Learn why and what they’re looking for. (Keep these contacts in your back pocket. Maybe they’ll be some of your first clients!)
- Searching online forums like Quora for discussions related to your ideas. What questions are people asking and what are the top answers?
- Searching freelance job post websites like Upwork and Fiverr for related listings.
3. Use the Google AdWords Keyword Planner
The Google AdWords Keyword Planner can help you see two main things:
- Search volume: How popular a certain search is (which basically means how many potential clients you might have)
- Competition: How many other service providers are trying to snatch up those clients
Ideally, your service idea will have at least 1,000 monthly searches and low competition. And once you input a keyword idea, Google will also recommend some similar ones for more ideas.
Say you love surfing and want to start an instructional YouTube channel or blog for beginners.
You can see that keywords for learning how to surf fit snugly into this range. So this keyword has passed the keyword test for a viable service!
4. Scope out the Existing Niche
See what other service providers are doing in this realm. This will help you get an idea of what it will take if you decide to earn online by providing a service in this niche.
One of the best ways to do this is a good ol’ Google search.
Type in your search term and see what the top-ranking websites are saying.
Take a look at the videos and articles that are coming up, as well as how many search results you see.
To build off the surfing example, we can see videos discussing things like:
- 5 things to know when you start surfing
- Natural surf techniques
- 6 mistakes every beginner surfer makes
- The best places to learn to surf around the world
- 10 easy steps to learn how to surf
This will give you more ideas of what you’d be up against if you tried to join this niche.
Training and Certifications
Say you have a more technical interest or hobby, but you’re not confident that your ability will help you earn any money online. Don’t fret – there are loads of online courses and programs that you can take to build up your skills.
Here are some awesome educational resources to help you improve your skills and earn from them:
The cost of these resources depend on what you’re looking for. Some of them are free, and prices go up depending on the website and how in-depth you want to learn.
Some websites allow you to buy individual courses, while some have an all-access membership where you can pay a monthly fee to access all courses.
Earning on the internet with your services is easier when you’ve had some kind of skills training, so take advantage of what’s on offer.
2.4. The Importance of Marketing
In today’s competitive economy, the average store owner or freelancer can’t afford the luxury of sponsored advertising, let alone stand out from established companies that can.
But, in order to earn money online, you need to prioritize marketing. Without a marketing strategy of some kind, it will be incredibly difficult.
The good news is that you have several low-cost marketing techniques available at your disposal. (And you don’t need to hire an agency to start out.)
Post in Relevant Forums & Social Media Groups
You’re probably present in at least one forum and social media group (perhaps a Facebook group), right?
Consider using these channels for marketing a product or service.
Most forums and social media groups are free to join and have a simple process for profile registration.
Of course, you’d want to participate in forums/groups relevant to your business. Here’s how to find them.
Use Social Media Search
From the thousands of groups out there, only a handful are useful to each business owner, so it’s critical to select wisely.
From your home page on Facebook or LinkedIn, type keywords related to your profession or industry into the Search bar. Once the search window opens, be sure to choose the ‘Groups’ tab to filter the results.
For example, you’d get the following results if you search for ‘freelance writing’.
Look for mid-sized to large groups – at least a few thousand people – so that you can introduce your business to a sizable audience.
This is easy. Write the name of your niche/industry in Google followed by one of the following keywords:
The search engine will present you with a list of forums and social media groups specific to the nature of your business. In addition, you might come across curated lists compiled by influencers or authoritative blogs.
For example, if you’re in the business of selling drones, you can search for ‘best drone forums’ or ‘top drone forums’.
See the activity on the forum or group you wish to join, register a profile using your business name, and start promoting your services and products.
Which Groups & Forums Should I Join?
Ideally, you should take part in:
Market Yourself in Forums & Groups to Earn Money Online
Once you’ve joined the ideal forums and groups, follow these tips to market your business:
- Check the rules. Make sure you know what is and isn’t kosher.
- Focus on helping others. Answer questions. Leave links to helpful resources. Do something for free to earn meaningful connections.
- Be approachable. Tell people they can send you a private message if they’d like to know more. That’s your sweet spot for marketing a product or service to earn money online.
Build a Portfolio or Online Store
This might seem pretty obvious, but an online portfolio or ecommerce site is essential if you want to earn good money on the Internet.
To create an online store, consider using Shopify. It’s packed with a host of features that allow entrepreneurs of all backgrounds to sell products online from home.
Here are some key elements of a strong website:
- Easy-to-read content
- Beautiful images
- Clean design
- Excellent usability
- Highlights your best work
- Makes it easy for prospects to contact you directly
Understand SEO Basics
SEO, or search engine optimization, is a time-tested technique that improves your website’s rank in searches that people make on Google. The aim is to drive organic traffic to your website, i.e. visitors that you get without running paid advertising.
SEO can be categorized into two key elements: on-site SEO and off-site SEO.
On-site SEO includes tasks like internal linking, adding keywords to your title, updating your meta description, using visuals like videos and images, and updating your content for freshness.
Off-site SEO includes activities like link building, social optimization and outreach. A website owner reaches out to other sites of (ideally) a higher authority to link to his/her site.
[highlight] If you’re new to SEO, I recommend giving this chapter from Oberlo’s ‘Dropshipping 101’ ebook a read. It has an individual section on SEO, dedicated to beginners. [/highlight]
If you can get these factors to work together, you can obviously improve your website’s rank in Google. Better rankings mean more people will come across your service or product as they browse the internet. That’s one of the most cost-friendly ways to earn money online.
While SEO is important, remember: it’s not a cure-all, but rather another awesome tool for your toolbox.
Send Cold Emails
As a store owner or freelancer, you can spend some of your free time sending cold emails. To send them, all you need are the email addresses of:
Potential clients: Those interested in hiring freelancers.
Influencers: Authoritative figures or experts with a large number of followers.
But, how do you find those email addresses?
1. Use Google
These days, email addresses of influencers and potential employers can be found on the internet. All you have to do is write an influencer’s or recruiter’s name on Google, followed by one of the following key phrases:
- ‘contact information’
- ‘email address’
Test it yourself. Let’s assume you’re a freelance writer and you want a shout out from Carol Tice, who is a pretty big name in the freelance writing industry.
You can search for her email by writing ‘Carol Tice contact information’ or ‘Carol Tice email address’ in Google.
2. Use LinkedIn
Even with the free version of LinkedIn, you can often message prospects without being their connection. If you want to know their email, check out their LinkedIn profile. Most of the time, their profile description will include their email ID.
3. Use Clearbit Connect
Out of all email discovery tools, I recommend using Clearbit Connect to find an individual’s email address. Having tested it a number of times, I find it quite useful.
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Chapter 2 Takeaways
- First things first: choose the kind of business you want to start based on your lifestyle, resources, capabilities, skills, and interests. Make sure your head is on straight and that you’re mentally prepared for all the hard work that comes with earning online.
- To start a product-based business, search online to see what types of products are making sales these days and whether those align with any of your personal preferences or interests. Don’t jump the gun and choose a niche before you’re sure you can make a profit.
- To start a service-based business, try to get the magical center spot of the Venn diagram by balancing what you love to do, what you’re good at going, and what people will pay for. Then do your research to see what it takes and what you’re up against.
- When it comes to making money with your online business, marketing simply can’t be overlooked. Try getting creative with social media, Google searches, web forums, SEO basics, and reaching out to individuals who might be interested in your offerings.