The internet has been growing in leaps and bounds over the past few decades and as such many business opportunities have also cropped up on the net.
Opening a business is no small task and making it successful is a whole new ball game.
However, with the recent spurt of online business, people with a computer and internet connection are now taking to online business to earn some handy money from home or to supplement their income from elsewhere.
The internet is home to such a large variety of options that many questions come to mind before jumping in.
So to help you along we have put together a list of frequently asked questions on starting an online business.
- 1 1) How do I start?
- 2 2) Do I need to invest money to earn money?
- 3 3) How much can I make?
- 4 4) What business can I start?
- 5 5) What is a good name for my business?
- 6 6) I have an idea. How do I know it is not already taken?
- 7 7) How do I protect my idea?
- 8 8) Do I need any permits or licenses for my business?
- 9 9) How important is insuring my business?
- 10 10) How do I promote my online business?
- 11 11) What are the biggest challenges?
- 12 12) Can I share a business with a friend or family member?
- 13 13) How should I divide equity between co-founders?
- 14 14) How do I increase traffic to my website?
- 15 15) How do I get the domain name I want?
- 16 16) Do I need a specialist team to take care of my business?
- 17 17) What about financing?
- 18 18) Can I open multiple businesses?
- 19 19) Is there a risk of online fraud?
- 20 20) How will customers know if my website is safe?
- 21 21) How high should I price my products?
- 22 22) Are angel investors and venture capitalist the same?
- 23 23) How do I find a venture capitalist?
- 24 24) How long till I heap my rewards?
- 25 25) What type of accounts do I need?
- 26 26) Finally is online business more rewarding than offline business?
1) How do I start?
Well, first you have to figure out what it is that you are good at and what interests you.
Make a list of your skills and the fields that you are interested in.
Search the internet and research on each topic.
Try to understand the demand for the various topics and then shortlist a few with the highest demand which are likely to make you more money.
Figure out a way to start. Building a website, customized to your skills and services, is always a good place to start.
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Use the website to let people know about you and your services and all other relevant details.
Ensure you read this informative post about the top 10 online jobs without investment and see if you can start from there on.
2) Do I need to invest money to earn money?
No, not really. However, if you are serious about making money online then opening a website of your own doesn’t hurt you much and helps in the long run.
All you need to do is buy a domain for just $10 or so and pay hosting charges at nearly $100 a year.
As you can see it is just a minimal investment which will only help you earn more later on.
On top of that having your own website lends you more credibility and makes it easier for potential clients to know about you and reach you.
3) How much can I make?
Making money on the internet depends wholly on your skills, how much time and effort you are willing to put in and what kind of services you are offering.
Most of these jobs online are freelance and temporary. As such an article writing job will fetch you more than forum posting.
However, website brokers and service resellers can make way more than any article writer or forum poster.
If you have the time and skill you can even do more than one job at a time to increase your earnings manifold.
$100 a day is the least you can make from the internet even if you have very nominal skills.
4) What business can I start?
This totally depends on you. Try to aim for things you are good at and enjoy doing.
Maybe a hobby, or even a simple pastime can be turned into a business if you are good at what you do and it can be of some use to other peoples.
First make a list of what you are good at and what you like to do.
Try combining the two lists and come up with a few ideas that you both enjoy doing and do well.
Check out with friends, families and even social media on latest trends and demands.
Mold your skills as per the customer’s demands and liking and then come up with a solid plan to start.
Whatever you sell, whether product or service, make sure it is useful to a wide range of people and helps them in some way.
Finally, don’t get bogged down by failures and keep true to your plans.
5) What is a good name for my business?
Coming up with a good name for your business can be a bit tricky.
For some people naming their kid after directions or weather conditions and seasons comes easier.
First of all be sure what service you are trying to promote and what your business is all about.
Then come up with a list of easy but innovative names for your business. Try keeping them short, easy to spell yet witty.
This will pretty much narrow down your list to a handful of names.
Choose the one you think more appropriate and understandable from the client’s point of view. Now that you have a name, start promoting.
6) I have an idea. How do I know it is not already taken?
Try doing a Google search with the keywords of your idea. Check if there are any existing ideas on that tune.
You can also do an online search of the U.S. Patent and Trademark Office at www.uspto.gov.
If you have a genuine idea then you need to hire a patent lawyer and get a patent done in your name.
7) How do I protect my idea?
Protecting your ideas is of utmost importance.
More than the idea itself, it is the practical implementation of the idea which is important.
Now getting a copyright may help you but copyrights can be sold. So the best way for you to protect your idea is to get a patent for it.
A patent validates that the working idea belongs to the patent holder.
8) Do I need any permits or licenses for my business?
Of course you do! If you have a regulated business (like the alcohol or aviation business) then you must have a permit.
Apart from that you will also require a sales tax license, a city or county business license and a Federal and State tax ID.
You will also need zoning and sellers permit. Health department permits are also required if you are planning on a restaurant or even a food joint.
If you want to run it from your home, then a home based business permit is also required.
After you have all the required permits and licenses you are ready to start.
To know more about permits and licenses check out the laws in your state or city or contact with a legal business expert.
9) How important is insuring my business?
Insuring your business is as important as getting a valid license.
There are various types of insurances that you can get for your business. You insure your business for the same reasons you insure your home or car.
Here are a few insurances you should consider depending on what you will be dealing in.
- Product Liability
- General Liability
- Property insurance
- Cyber security or data insurance is a must these days.
- Health insurance for employees.
- Commercial insurance etc.
There are many insurance plans available depending on your business.
You can Google about the various insurance policies available and find out which ones might be useful for you.
10) How do I promote my online business?
Now that you have set up your business it for you to advertise it. You need to advertise so that more people get to know about your business.
Promoting a business nowadays is a piece of cake.
Various social media networks have made it easier for you to place ads or let people know about your business.
You should start by spreading the word amongst your friends and family.
Then visit advertising websites and place your ads there. Your website should be attractive yet simple and informative.
Social media platforms become useful at such times due to the huge public traffic throughout the day on their sites.
Promoting your business on such sites will give you more exposure and help you gain ground.
11) What are the biggest challenges?
There are a lot of challenges and risk involved in any business. Some of the important challenges you may face are:
- Having a good capital and cash flow.
- Coming up with a good business plan and sticking to it.
- Producing quality products or services.
- Managing your time as well as your employees.
- Know how to hire good employees and when to fire bad ones.
- Getting rejected.
Online business like any other is full of these challenges.
You will have to take any rejection in your stride as it takes a good time for any business to grow and develop.
Challenges help you to grow which in turns helps build your business.
You can also consult professionals who give you tips on starting your own business.
Yes, you can.
In fact, there are certain businesses where the idea was the brain child of two or more people.
In such cases they are said to have co-founded the business.
There are a lot of food joints which are jointly owned by siblings or maybe a father and his son.
In other cases, however the person who came up with the idea may not have sufficient fund and can turn to someone who has and is willing to fund the business.
Thus they are said to have co-founded a business.
Major Law firms are great examples of co-founders operating a business.
13) How should I divide equity between co-founders?
Well the division of equity is subjective.
If the venture was mutually agreed upon by two people, then it is only logical that the equity is divided equally.
However, in certain instances the person who came up with the idea may demand a greater equity, say 75%, than the person funding the venture.
Share of equity in a joint venture always depends on the people involved in the venture.
There are no specific rules as to the share of equity as it is something mutually agreed upon.
If there are more than two founders, then the overall contribution of each founder is taken into account when considering the division of equity.
The period of time for which each founder may stay is also taken under consideration if the deal was a temporary one.
14) How do I increase traffic to my website?
First and foremost, your website should not be complex.
A simple and understandable yet attractive website is what you should be aiming for.
The website should properly show the service or product you are offering and also list your contacts and credentials.
The website is very important as this is how your clients or customers will get to know more about your services or products and also if you have proper permits.
One good way to increase traffic is to go to Google AdWords, a pay-per-click ad site where you can place ads and pay them small revenue for which they will direct traffic to your website.
Every time a keyword related to your business is searched, it will place your ad on the result list.
The higher you are on this list the more traffic you will get on your site.
Take advantage of the various social media platforms available nowadays.
Advertise your website on such platforms so that more people get to know about it. This will divert traffic to your website.
15) How do I get the domain name I want?
It has happened to all of us. The username you come up with is already taken.
Same goes for domain names. All the good ones seem to be taken.
Search to check if your domain name is already taken by someone.
If you do not like any of the available ones or they are inappropriate for your business, then you can often get the one you want if you are willing to pay the right sum.
Most domain names already taken are generally up for grabs.
You can find the owner of a particular domain name by doing a ‘WHOIS search’ at www.networksolutions.com.
It depends on how much you are willing to pay.
If it is a good name, with a high Google rating and you really want it then don’t be cheap.
Offer the owner of the domain name a reasonable value that he can’t resist.
16) Do I need a specialist team to take care of my business?
This depends on your skills and qualifications.
If you have learned business management or if you have good business skills and a good mind there is no reason you can handle the business all by yourself.
However, as your business grows with time you will need employees to handle the growing business.
As skilled as you may be, the different sectors of a growing business will be too much for one man to handle.
And if you are not a skilled business then you should have trustworthy team of capable minds to look after the workings of the business you founded.
Even if you are skilled a big business always needs a core team of competent people to take the big decisions.
Anyways a legal business expert is necessary and recommendable for any business.
You would require the services of a business expert stay on the safe side of the law.
17) What about financing?
If you have the means then put your own money into your company.
If self-financing is not an option then you can always ask friends and family to chip in, if they believe in you and your business idea.
The bank is a good place to start looking for help with financing.
Various banks offer wide range of loans for young entrepreneurs and business startups.
You will get all the help you need from the bank. In case you are not willing to deal with the bank then you should look for angel investors.
Angel investors are people who are willing to fund a new business if they see potential in it.
Investors are also looking for good business ideas on which they can invest and gain from.
You will have to pay the angel investor a share of equity in return for his investment.
18) Can I open multiple businesses?
You can do anything as long as it abides by the law.
Apart from that opening more than one business even if you have different ideas is not a recommendable move.
Multiple companies can spread your resources thin.
Instead of trying to gain from multiple businesses you should concentrate your time and skills one project so that it can grow properly.
At first you should start with one idea and move ahead slowly and steadily.
As mentioned earlier there are a lot of pitfalls when it comes to online business, so make sure to watch your step.
After your main business have grown sufficiently and is running smoothly you can look into other prospects.
With the solid backing from the mother company, you can either branch out or incorporate other ideas into your existing business to expand it.
There are so many ways to go that you will be spoilt for choice.
So the trick is to be patient and establish a steady business. It is always a good idea to have a backup plan.
19) Is there a risk of online fraud?
Online fraud and fishing activities have increased manifold in recent years.
So to protect your sensitive data and personal information you should be very careful while dealing online.
- First of all do not visit any fishy website.
- Check if the website is secure and also get a good antivirus for your computer if you don’t already have one.
- Don’t click on any links that looks too good to be true.
- Don’t give away important business details to random people on the internet.
- Check your website at least twice a week for anything fishy or inappropriate.
- Use your antivirus to scan and if you find something unwanted be prompt and remove it.
- If, however, sensitive data from your computer or website is hacked then immediately contact with your local authorities as soon as possible.
20) How will customers know if my website is safe?
With all the identity and credit card fraud taking place these days, customers have become wary of submitting their card details on any website and rightfully so.
Many e-commerce websites have to deal with low traffic due to an abrupt increase in cyber crimes.
People have become more apprehensive of buying and selling things online.
Online business owners should take stringent anti fraud measures to ensure their own security as well their client’s or customer’s security.
First a little knowledge of cyber laws will help you tremendously.
Next you should try and understand how phishing or malwares work and how they get into your system.
Once you understand the basic layout, you will be better equipped to handle cyber threats.
Cyber criminals are also raising their game and coming up with new ways to compromise your system. Get a malware and virus tracker tool for your website.
Regularly scan and fix your website as well as your personal computer to keep it safe.
Also keep track of the devices accessing your site and if you find a rogue device be sure to take appropriate action immediately.
Apart from these safety measures, your website should look clean and easy to use.
A comprehensive yet simple website also instills a sense of confidence among your potential customers.
A secure server is a must if you are planning on selling online.
Customers willing to buy should be provided adequate security so that they can confidently complete the transaction.
21) How high should I price my products?
When it comes to online business, competition is huge. The internet is teeming with various e-commerce sites and businesses.
To stand out among them you need a solid business plan to backup a brilliant idea.
The prices you offer is one of the most important aspects of your business plan.
Pricing whatever it is you are selling just right may seem a gargantuan task at first.
However, once you know what you are selling and what other competing businesses are selling the same for, you will get a clearer idea.
If you are selling a service, then your price should be based on how much time and effort is required and the complexity of the task at hand.
Pricing of product is much easier though.
You need to have an overall idea of the current market prices of the product you are selling and also the demand for the product.
You can adjust your price as required.
You may also offer incentives like free shipping above a certain amount of purchase to encourage customers to buy more or come back.
22) Are angel investors and venture capitalist the same?
No, they are not.
Angel investors are generally well to do businessman or individuals who invest their own personal funds in a potentially rewarding business opportunity.
These individuals are great if you are need of short quick funds but they will not invest a massive amount of fund on your business.
Venture capitalists on the other hand are firms dedicated to invest in promising start-up businesses and also expanding businesses.
They use other people’s money to invest in a business from which they may profit later on.
While a group of angel investors may go as high as $50,000 or even $1 million but a single venture capitalist will give you a minimum of $50,000 or even $1 million depending on your business and the firm you want help from.
If in need of funds to kick start your online business then it is commendable to seek help from venture capitalists rather than one or two angel investors.
If however, a short fund will suffice your needs for the time being then an angel investor will do.
23) How do I find a venture capitalist?
The easiest way is to ask people who may know anything regarding a business.
Successful entrepreneurs, corporate attorneys or any business person you may know can give you valuable information regarding venture capitalist.
Talk to them and make a list of the reliable firms that they suggest.
Next head out to these firms one by one and check out of they are genuine and have proper licenses or permits.
Once you are satisfied with a firm pitch them your business idea.
Your presentation should be informative and not long drawn out. If they find potential in your plans they will offer to invest.
What amount they will invest depends on a lot of factors but it all comes down to your bargaining skills.
Another easy to find a venture capitalist is to search on the internet. Be wary of frauds though as the internet is teeming with fraud sites and peoples.
Social media platforms are good place to start your search.
You can also run a simple Google search which will offer a list of sites or even blogs.
If and when you find a suitable match contact them through the numbers given on their site or blog.
Having said all that, it is not that difficult to find a venture capitalist on today’s times.
However, it is difficult choosing the right one.
So before you jump in it is advisable to do some research on firms you have selected.
Carefully note their exit strategy as most investors will want to cash out at some point.
Also research what type of startups the firm generally invests in, how much they generally offer and for what equity.
Once you have the complete picture, compare different firms to find the most suitable for you and your online business.
24) How long till I heap my rewards?
Any business takes time to fully grow and reward you with the fruits of your labor.
Being patient and calm minded is a must if you want your business to be successful.
You will have to take any failures or rejections in your stride. You should keep this in mind before you decide to open a business.
No matter how much you invest there is no quick and easy way o get your money back.
With time the business will grow and you will get back much more than what you put in but it takes patience.
Like every good things becoming a successful business person also takes time.
25) What type of accounts do I need?
We all have working bank account or at least most of us.
However, when dealing online you need to also have an online account where your clients or customers can pay you after the transaction is complete.
The payment is received almost immediately without any hassle. You should consider opening a PayPal account, an online money transaction program.
Keeping an online account these days is very useful as most transactions are done digitally now.
Although there are certain risks involved in online transactions, in this age of speed it is the fastest way to go.
Be sure to not divulge any sensitive information to anyone over the phone or internet and don’t click on ads or any suspicious links.
Keep your account secure by regularly checking for anything fishy or changing your password from time to time.
26) Finally is online business more rewarding than offline business?
This is hard to say definitely.
Major offline businesses tend to do well than online businesses, however the recent trend of going online has forced such businesses to also take the online route.
As for online business, there are certain obvious advantages like you can completely work from home or an office near your home.
As more people are going online these days, the internet is the best place to get public attention now.
The rewards you reap will solely depend on what you sow and your efforts thereafter.
You probably already know that the internet is a place full of opportunities and you only need to be looking at the right places in order to avail them.
Keeping in mind all of the above, if you have a ground-breaking idea then there is no better time to start than now.
If you’re are not satisfied with the answers here, please do not hesitate to contact me.
Note: I’ll be updating this FAQ list from time to time. So make sure you check back soon.