Considering starting an online business in 2022? There are really only four main types of online businesses to choose from. In this episode, we discuss those four types.
- 03:06 – Four Types Of Online Business
- 04:05 – Online Business Type 1: eCommerce
- 07:35 – Online Business Type 2: Online Services
- 10:33 – Online Business Type 3: Software as a Service (SaaS)
- 14:29 – Online Business Type 4: Content Creation (Blogging, Podcasting, YouTube)
- 19:04 – What Kind Of Online Business Should I Start In 2022
- 20:51 – Online Business Types Brainstorming List
Let’s break online businesses into four distinct categories and go through a framework you can use to decide which kind of online business you would like to create.
Online Business Type 1: eCommerce
In eCommerce, we are typically talking about actual physical products that customers buy online. There are several viable options for you to start an eCommerce business in 2022, the first of which is drop shipping.
Drop shipping is taking an order for a product that you don’t actually have, placing that order at a cheaper price from a supplier that you’ve secured, and having that supplier ship the product directly to your customer. You keep the difference between the price your customer paid and the price that you had to pay to fulfill the order. This is probably the easiest kind of business to get started in 2022 because you’re not dealing with actual warehousing products and you’re not dealing with a lot of the complexities that come with eCommerce.
Other eCommerce options include selling directly on platforms like Amazon and eBay, or you can develop your own product and have it manufactured. You can then have that product shipped to you, put it in a warehouse and sell it online.
Online Business Type 2: Online Services
This is the idea that you have something that you can do, a service that you can provide. You put up a website and offer that service for sale on the internet. There are many examples of this: accounting, graphics design, writing, editing, voiceover, coaching. These can be done either in person or virtually online so your customers can come from anywhere in the world 24 hours a day, seven days a week. The downside is that you’re also competing with a world full of providers.
Online Business Type 3: Software as a Service (SaaS)
This is where you write software to service a multitude of customers. Customers usually pay a recurring fee, in exchange, get a service that you can take advantage of as a business person.
What’s great with SaaS is that it scales infinitely with server capacity but it can also be very technically challenging. It doesn’t mean that you need to be a software guru in order to start this kind of business, what you need to be is a person who has a clear idea about a problem to solve and how to solve it. The actual software programming, support and maintenance of a system can be done by some other professional- – you can hire people to do the technical work.
In order to have a viable product, you need to have a viable idea with a unique selling proposition, something that you believe will work in the marketplace.
Online Business Type 4: Content Creation (Blogging, Podcasting, YouTube)
This is a huge space and so many of the things that we consider businesses in the content creation space are really just variations of it. Blogging, podcasting and being a YouTuber, for example, are really not a business, they are ways to deliver information to people.
The point of the business is to communicate ideas to create content, and that content has intrinsic value. You may monetize it with affiliate marketing, you may build products around that content, you may create courses and sell those courses, you may have live events, but fundamentally, you’re a content creation business.
What Kind of Online Business Should You Start In 2022?
The kind of business that you should start depends on exactly where your interests lie and what it is that you want to accomplish with the business. If your goal for creating an online business is simply to make money, that’s going to drive you to a different place than if your goal in creating an online business is to help people and it also has to do with your interests.
A very important thing that a lot of people miss, they immediately ask the question: what’s the best way for me to make money? The right question is: what is the best way for me to successfully deliver whatever it is that I want to deliver, whatever I’m interested in accomplishing? If you do that, the money will follow.
Online Business Types Brainstorming List
- Spend 10 minutes writing down all your ideas for starting an online business.
- For each one of those ideas, rank them from one to three. If the idea is of no interest to you at all, give it a one. If the idea is super interesting to you, give it a three.
- Score the items depending on how qualified you feel you are to do this idea, with 3 as most qualified.
- Score the items on how likely you think you could find a way to make money with it, with 3 as the highest score.
- Add up the scores.
- Sort the ideas with the highest scored items at the top – those are your best ideas for starting a new online business in 2022.
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