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The Complete Guide to Making a Living Online 

Whether you’re looking for passive income to supplement your full-time income or just seeking a full-time online job, this is the guide for you.

Whether you’re looking for passive income to supplement your full-time income or just seeking a full-time online job, this is the guide for you. Today you can make a living—even a generous living—as an online business owner. Whether you’re making money writing or dropshipping, the pandemic-fueled online shift and the explosive technological growth that followed are driving online business growth. Everyone knows someone adding income streams to bring in extra cash—and you could be next!

Buying goods online, formally known as e-commerce, is still rising. According to the Small Business Administration, e-commerce brought in more than $504 billion in revenue last year—and that’s only expected to increase. NPR also states, “Close to two-thirds of Americans now say they’ve bought something on Amazon, according to a new NPR/Marist poll. That is 92 percent of America’s online shoppers—which is to say, almost all of them.” 

Online business is also prospering due to the rise of remote workers. You can now run a company from your home office while your workers are located just about anywhere. New software and tools emerge daily to help you work harder, faster, and smarter.

Making a little extra money, setting up some passive income, or enjoying a fulfilling career has never been more accessible online.

Business Models For Making a Living Online 

 In general, there are four online business models you can choose from: 

Product sales

Essentially, this is making and/or selling goods on your website or through an e-commerce site such as Amazon. The pros of product sales are you can turn a hobby you love into a business. Are you a master builder? You can make something unique and unforgettable and sell it. That said, you’ll probably need a large garage or storage space to hold your merchandise.


With this model, you are the intermediary between the product manufacturer and the buyer. As far as pros go, you won’t need storage space, but one con is you will pay for the product and the drop-ship fee. On average, drop-ship fees range from $2 to $5, according to Shopify. 

Service sales

If you’re a consultant, accounting expert, freelance writer, or other professional, this model is for you. Simply create a website and then deliver your services online or in person, depending on your profession. One pro of this model is it’s easy to set up. Thanks to online website builders (Wix, Weebly, and WordPress), there’s no need to store any products. Your service is your expertise. The con here is the sheer amount of competition, not to mention the need to build a regular customer base. 

Content Marketing

If the idea of making money writing appeals to you—and you’re willing to put in a lot of upfront effort—this could be your strategy. The con is all the work that needs to be done up front: you need a large stable of content, and it needs to rank well in search engines. This is challenging. The pro is that once you have a large audience, content marketing can be very profitable with little effort (usually through advertising and affiliate links). If affiliate marketing doesn’t appeal to you, creating a premium email list is all the rage. 

Recent data suggests business brokering, language translation, data analysis, and digital marketing management are some of the best business ideas for 2020. Entrepreneur.com has compiled 55 of its best ideas for easy-to-start, home-based businesses If none of those professions fit your skills. According to the article, if you’re a numbers person, accounting could suit you. Love graphic design? You can make an online business out of that. If you have a passion, fascination, or specialized training, there’s an online business out there for you.

You just need to make it happen. 

Buying an Existing Business versus Starting from Scratch

 As you contemplate making a living online, keep in mind that you don’t have to start from scratch. You can purchase an existing online business to cut down on the time and energy needed to get started.

To do this, search online for platforms that will connect you to sellers, like Flippa.com, a site that connects you with sellers. If you find a business you like on Flippa, you can research it and even negotiate your price with that seller. Categories help organize types of businesses, from Software-as-a-Service (SaaS) to e-commerce and apps. 

Flippa.com CEO Blake Hutchinson has a few tips for buying an online business: first, buy in an industry you feel passionate about. Next, perform your due diligence. Finally, make sure you understand the business model you choose. 

On the other hand, if you choose to start your business from scratch, you’ll have more freedom of choice. That said, you may experience more ramp-up time.

Building Your Business Online and Offline

Hold on, partner—you can’t just saddle up and start selling. Here are the next steps for making a living online:

Choose a Business Structure

Once you’ve decided what you’re going to sell—and how you’re going to deliver it—you can figure out your business structure. Typical structures include Limited Liability Companies (LLC), Sole Proprietorships, and Partnerships. This is important because your costs as a sole proprietor may differ from those of an LLC, for example.

Name and Register Your Business

From there, you’ll need a business name. Licensing paperwork comes next. This includes registering your business to receive an Employer Identification Number (EIN). The government uses the EIN for tax purposes and determining if there are any other federal, state, or local agencies you need to register with. The Small Business Administration (SBA) has a surplus of resources on its website to ensure you don’t miss any steps while you’re setting up. You can also view Guidant’s Complete Guide to Becoming a Small Business Owner for more ideas.

Build Your Website

Next, of course, is a website! Remember, Wix.com, Weebly.com, and WordPress.com from above? This is the time to check out these sites, or others like them, to make a website. Since most of these sites offer free templates, you can set up a simple site in a short amount of time. Make sure you think about the primary goal of your website (Are you selling goods? Informing customers about your services? Using content to drive ad revenue?) and choose your content wisely. Don’t forget to utilize calls-to-action where needed.

Set Up the E-Commerce Logistics

If you are selling products on your site, make sure you research the different types of e-commerce sites. There are significant differences between hosted platforms like Big Commerce and Shopify to marketplace sites like Etsy and Amazon. 

Different sites offer different options, but only you can decide what’s best for your business.

The Necessary Equipment for Your Online Business

For many online businesses, as with copywriting or sales, you don’t need a ton of equipment. For other types of businesses, you’ll need a large storage area such as a basement or garage to hold your wares. If you require temperature-regulated storage or something complex, you can rent. If you are crafting, woodworking, or building something by hand, your building supplies and a workspace will be a part of your equipment setup.

In short: the type of business you run will determine the equipment you need. You’ll probably need internet, though!

Financing Your Online Business

Unless your bank account is overfilled or your business offerings don’t require much upfront capital, you may need small business financing. For example, if you need equipment to make or ship your products, a small business loan will help. The good news is financing small offline businesses isn’t much different from financing small online businesses.

Many online business owners use Small Business Administration loans. Others use Rollovers for Small Business Startups (ROBS), known as 401(k) business financing. You can even combine the two! In doing so, you get the low-interest rates of an SBA loan and a debt-free ROBS arrangement as a down payment. Other small business financing options include unsecured loans and portfolio loans. 

 You can compare and contrast the different financing options to see which one may work best for you and your online business.

Digital Marketing: Getting People To Come to Your Site 

Now that you’ve set up your new business, it’s the time to market and advertise. To make digital marketing less overwhelming, let’s break it down into categories.

Social Media

First, social media is a must. You’ll need a solid online presence with a Facebook page, Instagram account, Twitter account, and LinkedIn company site. If video applies to what you do, you’ll need a YouTube. The key here is taking it one at a time—don’t add another channel until you’ve got the first one running smoothly.

Website Content

When it comes to your website, keep your customer in mind. Optimize both the design and web copy to make sure the site is easy to use. Host a blog and update that content regularly. Make sure you are using keywords that drive results to your website. For more information, check out this excellent search engine optimization and content starter guide by SemRush. 

Email Marketing

Targeted emails are another way to keep in contact with customers (and potential customers). You can use MailChimp and Constant Contact to keep your leads straight and your emails looking sharp. If you’re not familiar with writing email, use free tools like DripScripts to get started! 

Online Review Sites

Finally, business listing sites like Google Local and Google My Business ensure your business shows up correctly in your geographic location. You can also use online forums like Nextdoor or Yelp to guarantee you are top of mind for your consumers in a positive way. 

For more ideas, Entrepreneur.com lists 21 ways to effectively market your business online, from creating a branded email signature to using Facebook ads.

Confronting the Challenges of Online Businesses 

Even though the opportunities for online businesses are numerous, it doesn’t mean you won’t encounter challenges in your quest to start a company. It’s best to know about the pitfalls ahead of time so you can tackle them in stride. Here are a few common challenges when starting an online business: 

Competition may be fierce

You won’t be the only e-commerce or web design business out there. In fact, when you started a business online because you elected to compete with businesses not just on your home turf but all over the country.

Make your offerings stand out through uniqueness, execution, and impeccable customer service. Find your niche. Finding this value proposition can mean the difference between making it and—well, not making it.

Technology can be overwhelming

Website optimization and search engine optimization are just a couple of the digital tasks you’ll need to either master or hire for. You’ll also want to brush up on social media to learn which sites and tools work best for your business. If you’re not a social superstar, you can always reach out to a trusted colleague or hire someone with social media expertise.

Financials require you to be fastidious

Ensure you’re paying your taxes in the state you live in and in the states consumers purchase your items from, if applicable. In general, if your business has a physical presence in a state, you must collect sales taxes from online customers within that state. However, suppose you don’t have any kind of physical presence or “nexus” in the state. In that case, you generally won’t collect sales tax for online sales. 

That said, you should always double-check things with a tax professional. They can help you with this and anything else tax-related, so line one up early. 

Always Be Resourceful 

 Before the guide wraps up, here’s a list of helpful resources for new and aspiring online business owners. We’ve separated it into categories such as financing or marketing, so you can use this at-a-glance list for future reference! 

Online Opportunity Awaits 

The world of online business is ripe with opportunity, and all that it’s missing is you! Whether you’re seeking complete financial freedom, a career with flexibility, or just trying to get a bit of extra spending money through affiliate programs, the time to strike is now.

How you make a living online is entirely up to you: you can start from scratch or buy an existing online business. You can make money through affiliate marketing or selling products. You can market your business how you see fit—just make sure your online presence is a priority.

Financing is available if you need it, and the process may already be familiar if you’ve funded an offline business or franchise. With a variety of choices, from 401(k) business financing to SBA loans, you should be able to find a solution that fits your needs. 

Are you ready to give your online business a go? Pre-qualify for financing today with Guidant Financial—and start living your dream by making your living online!

Want to Use ROBS to Start a Business?

Our step-by-step Guide to Rollovers for Business Startups is a complete handbook of everything you need to know about using ROBS to start or buy a small business or franchise.

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