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3 Ways to Start an Online Business

I was sitting down to lunch with a long time friend of mine about 2 weeks ago.  This is a friend from high school that no longer lives in the same state as me, but I've seen maybe 3 or 4 times in the past 10 years.

He knows that I've been running online businesses now for several years, and he started to ask a few questions.  He does fine in his current full-time job as a sales rep, but the appeal of running his own online venture is something he loves to think about.

So, then he asked the question that I've been asked many times.  “I'd love to do what you are doing online.  How do I get started?”

We spent an hour at lunch discussing this question.  Today, I'd like to recap some of the answers I gave him in hopes that some of you will find it helpful as well.

In a nutshell, I think there are 3 ways that you should look at when considering to start an online business.

Option 1: Start From Scratch

Obviously, the most common way to start an online business is well, to start one from scratch.  This might be a niche site, an Amazon FBA business, a software product, or other service.

This is how I started.  I didn't realize there was any other way.

The basic premise here is that you come up with an idea for a website (or product or service) and you build it.  You start with no traffic, no customers, and no revenue.

Over a period of about 5 years I built several niche websites from scratch and was eventually able to quit my job in 2011 because the revenue from these sites had exceeded my day job income.  I earned a good portion of my income from adsense on these sites back during that time frame.

The pros of starting an online business from scratch The cons of starting an online business from scratch
  • Less expensive to get started because you built it yourself
  • Could end up being a waste of money if the business doesn't work out
  • You are forced to learn more, since you are doing almost everything yourself
  • You will make A LOT of mistakes along the way learning how to do things right
  • You can build exactly what you want.  Dream it up and built it.
  • You could invest a ton of time and all of that time is wasted

The bottom is line that the potential return on investment is the greatest when you build something on your own.  However, the downside is that you might build something that never actually makes any money.  

You have to decide if it's worth the risk to you.

Option 2: Buy an Online Business

The second option you have to jump into an online business is to buy one that is already making money.  This is a great option, and one that I just used when I bought a mom blog earlier this month.

The benefits are pretty clear; however, so are the downsides.  You can immediately have a business that is making money, but it also requires significant investment.

Pros of Buying an Online Business Cons of Buying an Online Business
  • Own something that is immediately earning money
  • Potentially a large investment required. 
  • Skip much of the learning curve.  Get handed a business that is already working.
  • Could lose a lot of money if the business goes down.
  • No guessing if you have a business model that works.  Focus on growth.
  •  If you aren't experienced, you might buy the wrong business.

I personally think buying a business can be the right fit for a lot of people.  In fact, if you buy the right website, you might be able to quit your job immediately.  Many online businesses making over $10,000 a month are sold all the time.

However, you should expect to pay anywhere between 20 to 36 times monthly earnings for an online business, so the initial investment can be significant.  And if you make the wrong investment, the revenue could potentially go away relatively quickly.

Online businesses are risky.  So, you really need to do your due diligence when you go down this path.  If you are interested in buying a business, I would start with these 3 brokerages: EmpireFlippers.com, QuietLightBrokerage.com, and FEInternational.com.

Option 3: Buy a Pre-Built Affiliate Site

The final option is somewhere in the middle of the 2 previous options.  A pre-built niche affiliate site is one that has already been built with all the research and content done.  However, the site is still relatively new, so it's not making money yet.

Brand Builders is the company I would recommend if you are interested in buying a pre-built niche site right here.

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Brand Builders is run by an experienced team.  They go out and find a niche that they know has the potential to make money.  Then they do all the keyword research, work with a team of authors to produce all the content, and then build the entire site.

If you are new, or just want to skip the process of building the site itself, you should check out the available sites on Brand Builders here.

The pros of buying a pre-made site The cons of buying a pre-made site
  • Low investment, with the same upside potential as building from scratch
  • Slightly less risk than building from scratch, because research has been done by an experienced team.
  • A little more expensive than just building something from scratch.
  • You can skip 4 to 6 months of work and start generating business right away.
  • There is still risk, and no guarantee that the site will make money

A Brand Builders site is good for someone that wants to skip a lot of the “learning curve”.  I know people that spend 6 months trying to build their site from scratch, and after all that time they only have a couple of articles up and are still trying to figure out the proper layout for their website.

If that sounds like you at all, these could be a good fit.

They other typical buyer of a pre-built niche sites is again, someone that wants to skip right to the promotion of their site.  They might have plenty of experience, but the low investment cost is worth the time they will save to just get the site done from day one.

Go ahead and weigh the pros and cons, and then check out the sites available on Brand Builders to see if they are a good fit.

What Direction is Right for You?

When I spoke to my friend at lunch the other day, I was able to discuss with him his individual situation and decide what is right for him.  I'm not able to speak with you individually, but I've laid out the arguments for and against some of the options for starting an online business.

At the end of the day, you have to decide whether building something from scratch, buying an existing business, or buying a pre-built site is the right option for you.

Whatever the choice, it's up to you to put in the effort and time required to get started.


Niche Business Ideas

By Spencer Haws
6 Comments

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Vince

Hey Spencer.
I have some past experience, and mixed success, with nichesites in the past.
I would really like to buy a ready site. Are we talking about the usual 9-12 months before the premade sites get’s traction in the organic search?

Cheers.

Anil Agarwal

3 fantastic options to start an online business to make money in the long run.

Personally I would go with starting from scratch if I really want to build a profitable online business, I will find ways to make it profitable from the beginning so that I can learn what is happening in my industry to get ahead.

Also it depends on your budget and your time if you have enough budget you can buy a pre built affiliate website which is already making decent money so you can put extra efforts into turning it profitable by hiring someone to create content for you and also managing SEO things for you.

The pros of buying an already well-built site is that you don’t have to worry too much about making it profitable. You just need to take things to the next level with your content marketing and SEO strategies.

Great post as always!

Dickson Sarpong

Great content as always. However in my opinion its high time people learn how to fish for themselves rather than someone doing the fishing for you.

NP, is a great place to get actionable contents for starting a profitable online business.

With their NSP 1 to 3,every details is in there for you to get started.

I have all those articles in a PDF file that l read whenever l lack any information.

Also the videos are also downloaded on my PC.

Hope you don’t mine Spencer.

I’m a new fish in this old sea but thanks to Spancer, Glen Allsopp, Brain Dean and Neil Patel
now l have my own site http://odicki.com

Its hasn’t made me a dime yet (1 month old) but l have learn a lot about content creation,SEO…

So if you have the time to do the learning then be smart from scratch.

Without implementing actionable steps to grow the pre made site your investments will go down the drain.

Put in the efforts to creat evergreen long form contents and your ROI will triple aiding you to quit your day job.

Linda

Thanks for these great tips to start an online business, Spencer!
Yesterday, I felt confident enough about my website, but after reading this article, I am worried again. Maybe I need to think about the best ways for content and how to monetize it.
Thank you again! Sometimes we need reminders to remember what we should do. 🙂

Anil Agarwal

Great post Spencer,
There are really many ways of starting an online business, but I think the 3 ways you shared here are the most basic.

I must say that building an online business, just like every other type of business is not easy at all as there are lots of moving parts that if not properly handled, things will go wrong. In fact, It can be quite frustrating.

Most of us started with the first method “starting from scratch” and while that is often the most pocket friendly method of creating an online business, the risks is really much like you said. I remembered starting about 3 different blogs back then of which none of them became successful. It took me years before I was able to create a successful blog.

However, if you ask me, I’ll say that purchasing an already established website is always the best way to start, but the problem is that most people starting newly are usually not with that kind of capital.

Similarly, buying a pre-built affiliate website is another great way to start if you know you will be fully dedicated to it and make it successful.

But overall, if I’m to start all over again, I’ll look for money and buy an already successful site.

Jenny

I am new in the online industry and this post encourages me to work harder to establish my existence. Thank you just made my day.

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