Online Business

All the information you need
to start up an online business

Over the last decade, online business models have disrupted industries and changed the way in which we do commerce. As such, many innovative online businesses have emerged which most remote startups have adopted. It has also given individuals a tremendous opportunity to break free of the day-to-day grind by allowing them to create their own income streams.

The internet has changed the lives of many! This article should serve as your starting point for exploring various ideas for starting your next online business.

What is an online business?

Simply put, if you have an offering (product or service), marketing and finances (revenue and costs) that work in a particular system, you have a business.

An extension of this is an online business model which has become more popular with the internet. Unlike a traditional brick and mortar business, an online business uses the internet and a website/app as its storefront.

For any online business model to work, you need to integrate ALL 3 components mentioned above through digital platforms/tools. For instance, if you have an eCommerce store that offers “Cash on Delivery” as a payment option, your finances will have to be managed physically which defies the definition of an online business model.

Why start an online business?

Online business models are designed to help you start with far less capital than you would with a physical business. The barrier to entry is also far less and if done right, the return on your investment can exponentially increase.

Besides, since it’s all based online, it means that you can work out of anywhere as long as you have a laptop/smartphone and a good internet connection.

Starting an online business is a great way to bring in freedom and flexibility in to your life in addition to diversifying your income.

Keep reading to learn about online businesses and how to choose which model is right for you.

Getting Started

Start an online business

Beginner's Guide to Start an Online Business

In this digital age and with most of us working remotely post-pandemic, there are many looking at the option of starting an online business. This article looks at how one could get started.
generate remote business ideas

Simple Ways to Generate Online Business Ideas

If you're looking for simple ways to come up with online business ideas, we introduce a framework to help you to do. We also provide examples to help give you some inspiration.

Different Types of Online Businesses

Affiliate Marketing

  • Maintaining Cost: Low
  • Time Investment: Low
  • Experience Level: Low
  • Startup Capital: $100+
  • Profitability: High
  • Passive Income: High (90%)

This online business model is a very simple and straightforward business model to follow. In essence, affiliate marketing is where you sell other people’s products/services online and get paid a commission on every sale you make. Basically, you’re the middleman in making the deal.

The great thing about this is that you don’t need any employees or warehouses, just a website and an email list should be great for a start.

You can do it with products you already love and see every day – and you’ll never have a visitor come to your website looking for the wrong product.

There are various affiliate marketplaces that you can use to find the products that you wish to promote. These can be physical or digital products, services or just about anything that is offered online. Some examples of these affiliate network sites include Commission Junction, ShareASale, PartnerStack and ClickBank.

Authority Site

  • Maintaining Cost: Low
  • Time Investment: 6+ months
  • Experience Level: Medium
  • Startup Capital: $400 – $600
  • Profitability: High
  • Passive Income: High (75%)

An authority business is a potentially lucrative online business model that involves producing original, high-quality content. A successful authority site is built in layers. First, you need to have quality content. This will give your site a solid base and help you to establish credibility. As such, if you are completely new, it can take quite a while for you to establish an audience.

Building an authority involves providing a complete online reference resource for visitors on one specific topic. It becomes the “go-to” online resource for information, products, or services relating to the niche that you specialise in.

As an authority, your objective should be to draw and hold attention online in a particular topic. You can thereafter monetise that attention in various ways (eg: through advertisements, offers, affiliate marketing etc.)

You can use multiple mediums and channels to establish authority such as Youtube, Email Newsletters, Social Media etc. Whichever channel that you use, the key is for you to build a relationship with your users and help them feel comfortable with you and what you are offering to them.

Some common examples of niches in which most content creators showcase authority include health & fitness, money & finances, beauty, etc.

Digital products

  • Maintaining Cost: Low
  • Time Investment: 1-2 months
  • Experience Level: High
  • Startup Capital: $500 – $1,000
  • Profitability: High
  • Passive Income: High (80%)

One of the best ways to make money online is by sharing your knowledge/skills through a digital product. You can profit off of this if you sell digital products like eBooks and courses. This is also called content production, and it’s a great online business model.

If you’ve got a special skill or talent for something then this is the business model for you as it allows you to showcase your passion and expertise to build trust and credibility in your chosen market.

There are 3 main components that you need to address for you to make money out of digital products:

If you are creating your first digital product, it’s important that you stick to a subject you understand well. The beauty of a digital product business model is that all the effort will go into creating the product only at the beginning. Thereafter, you can promote it and distribute it and little/no incremental cost.

Related Posts

How to Sell Digital Products With a Website

In this article, we’ll explore the options of setting up your website to sell digital products. By the end of it, you should have a better idea about which strategy will work best for your particular needs!

How To Sell Digital Products on Etsy

If you are just getting started with selling digital products online, there are multiple sales channels you could use to distribute them to your audience. Etsy is one of them. This articles explores it in more detail.

How to Create Digital Products

If you want to create digital products, there are many ways you can go about it depending on its type. Let’s explore how you can go about it.


  • Maintaining Cost: High
  • Time Investment: 4+ months
  • Experience Level: High
  • Startup Capital: $5,000+
  • Profitability: High
  • Passive Income: Low/Medium

A drop shipping business is one that you can run from home without ever having to keep any inventory on hand. Instead, when a customer purchases a product, it is shipped directly to them by your manufacturer or wholesaler, and then you deduct the wholesale cost from the selling price, leaving you with your profit

Though I must admit, it can take quite a bit of time to learn the dynamics of this business model if you are new. However, once you get the hang of it, the sky is the limit.

One of the main benefits of drop shipping is that it’s an easy low-risk and low-cost way to start a business, and you don’t need to be an expert in e-commerce to get up and running.

Lead Generation

  • Maintaining Cost: Medium/High
  • Time Investment: Low
  • Experience Level: High
  • Startup Capital: $1,000+
  • Profitability: High
  • Passive Income: Medium/High

Basically, your job in this business is to find your client business qualified leads that they can turn into customers. The lead generation business model is one that has very high earning potential depending on the niche that you are in. It involves providing a service whereby you get paid when targeted visitors complete a form, sign up for a service, order a trial run of a product, or even just when they express interest in something.

For this model to be successful, you need to work with businesses that has an offer with a higher transactional value. For example, the average order value per “lead” a.k.a. customer is going to be less for a restaurant as opposed to a real estate agency. So ideally, you would want to offer lead generation services to the real estate agency or similar businesses such as construction contractors, personal trainers, tradesmen, dentists, accountants etc.

There are different ways to generate leads for these businesses including SEO, Social Media Marketing, Email Marketing etc. The idea is to specialise in any one of these ways, prove to potential customers that you can generate certain number of leads per month for the business and in return improve their revenue.

Subscription Sites

  • Maintaining Cost: Medium/High
  • Time Investment: Low
  • Experience Level: Low
  • Startup Capital: $500+
  • Profitability: High
  • Passive Income: Medium/High

Also known as membership sites, these are websites/applications in which you offer your audience exclusive/premium content in return for payment at regular intervals for access. If done correctly, it will allow you to create long term relationships with your customers as well as optimise the way your business is run.

Over this long-term association, you can enhance the products and services to match customers’ needs and grow with them.

One of the biggest benefits, and arguably why this model has become so popular – is that it provides predictability in revenue compared to conventional business models. They are a really convenient way to monetize your niche audience as you now have loyal members that are happy to pay you on a recurring basis.

Some popular examples that adopt this model include Netflix, Birchbox, Appsumo, Fizzle etc.

Productized Services

  • Maintaining Cost: Low in the long-term
  • Time Investment: High initially, then low
  • Experience Level: Medium/High
  • Startup Capital: $1,000+
  • Profitability: High
  • Passive Income: Medium

If you have been working as a freelancer for many years and are looking to convert it into an online business, chances are that you might consider this model.

Productized service refers a systematic way of delivering a service that continues to produce and grow with or without your direct involvement. This model works great if you are able to address a common problem faced by a common group of people.

This model is different to freelancing or agencies – in that all work is delivered according to a predefined scope. When you engage with a client as a freelancer, you’re basically engaged on a project-to-project basis. You make money from your client based on the hours and products or deliverables that you create for them.

However, with productized services, the processes are streamlined. Allowing your team to deliver the same high level of service with regularity. This makes your clients’ experience consistent so they can count on you no matter what needs to be done. 

The key component to a succeed with this model is achieve predictability. The great thing about this model is if it’s initially done right, the rest of the business operations will be very profitable.

Software-as-a-Service (SaaS)

  • Maintaining Cost: Medium/High
  • Time Investment: High
  • Experience Level: High
  • Startup Capital: $5,000 – $10,000+
  • Profitability: High
  • Passive Income: Medium

SaaS is a relatively new business model that generates revenue through recurring membership fees. These fees allow customers access to the product. The SaaS business model is often used by tech companies that provide online solutions for entities of all sizes.

As a result, savvy entrepreneurs have been taking advantage of the SaaS model in recent years, creating a highly successful revenue stream for their businesses.

However, this is one of the hardest online business models to develop. Unless of course, you have a good team of developers at your disposal.

Some popular examples of SaaS businesses include Shopify, QuickBooks, Adobe, Canva etc.

Lately, we’ve seen new startups adopting “micro-SaaS model” which is more popular among small business owners and individuals that require less development work.