How to start an online business? If this thought has crossed your mind you shouldn’t wait anymore. 2020 is already here and its the beginning of a new decade and I wish all my readers a very happy and prosperous new year 2020. If you are pondering over the idea to start an online business then you have come to the right place. In this post, I will walk you through different types of online businesses and what does it take to start one. So without further ado let’s jump right in.
What is an Online Business?
An online business can be run from anywhere in the world – all you need is a computer and working internet connection (high-speed preferred). There are several types of online businesses for you to consider:
- Ecommerce/Online selling – who doesn’t know or buy stuff amazon these days. It’s a perfect example of eCommerce but if you are passionate about some products and want to reach out to global customers eCommerce is the way to go. You can sell anything – clothing, shoes, perfumes, digital music, software, etc.
- Blogging – If you are passionate about certain topics you can create a blog about that topic and start sharing your experiences and thoughts. It is super easy to start a blog these days – All you need is WordPress, a great theme, a domain name, a basic hosting service and commitment to write good content on a regular basis.
- Video Blogging (Vlog) – Youtube has changed the world and in my opinion, it is one of the best platforms to share your video content. If you want to venture in that route just make sure your videos are entertaining and do tell a great story.
- Start teaching online – Similar thing here you can start teaching the stuff you are passionate about like – A software developer friend of mine started a youtube channel to teach Python (programming language) and Machine learning to other developers. He is doing really well now and is pretty profitable.
The list goes on practically most (but not all) of the businesses can be run online and you should find the stuff that you are passionate about and get started today.
7 Reasons to Run an Online Business
- Location Freedom – You can run your business practically from anywhere all you need is access to an internet-connected computer (laptop preferred) and preferably a smartphone. There are so many online business operators who travel all the time but still continue to run their businesses.
- Passive income stream/Long-term Financial Security – A successful online business not only helps you reach your FIRE goals but since it is independent of the location you can probably run it during your retirement, or hire someone to run it for you, or pass it on to your heirs.
- Low cost and barrier to entry – Most of the online businesses don’t require a large amount of capital to start. While this is good for you, it also is a challenge at barriers to entry for competition are significantly lower. So be prepared.
- Be your own boss – You are your own boss and you are only answerable to yourself. From personal experience, when I ran my own company I really loved the time. It was the best time of my career. I worked 15-16 hours/day, 7 days/week but always loved it. As I get older I hate answering my boss and I want to be my boss again.
- Manage your own time and schedule – We all have missed social events, kid soccer games, dance performance because of work commitments. Wouldn’t it be great if you can work when you want and take time off when needed? You are in control. I would absolutely love that.
- Higher Pre-tax Retirement Contribution limits – Since this is the FIRE blog we gotta talk about retirement savings and how online business can help you save more for your retirement. In 2020, as a business owner, you can contribute up to 25% of your gross salary or $57,000 in SEP-IRA or Solo 401K. This is significantly higher than the $19,500 limit for 401K as an employee.
- Potentially lower tax rates – When you run your business you can get much bigger deductions on your tax return which could result in dropping your tax rates compared to the tax rate as an employee.
Are you going to start an online business in 2020? I think it is a must-try for everyone even if you start as a side hustle while you are still an employee and want to test the waters, or you want to jump all-in.
Let me know your thoughts and feedback via comments.