7 REASONS FOR PURSUING AN ONLINE BUSINESS
What are the top reasons I should pursue an online business?
First of all, you need to figure out why you want to start a business, online or offline. Why is that important? It is crucial because starting a business is full of unknowns and that requires strong commitment and perseverance. Figuring out your WHY upfront would help you overcome the inherent trials and tribulations and help you think long-term as opposed to get-rich-quick attitude. At the end of the day, who you become matters more than anything else, so it does matter why you want to do something and how you get there.
Online businesses offer tremendous advantages over their offline counterparts.
Let me summarize a few.
- Beyond the initial grind, you can run online business from pretty much anywhere. Location independence brings tremendous freedom which you can use to pursue other passion such as traveling the world.
- Profit margins of over 90% are very much possible with online all-digital businesses. Obviously, all-physical or a business with mix of digital and physical products, will not have profit margins in that range. Just as a benchmark, with Amazon FBA, in a very best case scenario, you can expect to have profit margin in the neighborhood of 30-35%.
- Online businesses use internet properties such as a website or a product listing on a platform such as Amazon or Udemy, which means setting them up is fairly easy and there is plenty of help available in the form of freelancing platforms such as Upwork or Fiverr.
- Online businesses are built on web software & platforms and tooling ecosystem which are mostly available for free and would allow you to bring set and forget operations to bear. Example of online business software include WordPress, Woocommerce, Shopify etc.
- Online businesses make best form of passive income streams since they are by definition more automated than their offline counterparts. Unless you plan to work until you die, passive income is the way to go!
- Online businesses are easier to sell. There are plenty of outlets where you can put your online business for sale. It is much easier to estimate the overall business ROI and ownership exchange since businesses are mostly built together with a support system that can work without owner’s active involvement. For a stable business, you can expect to get paid anywhere from 30 to 40 times your avg. monthly net profit over the past 12 months. Let’s you your business has been turning over $10K in net monthly profit over the past 12 months, in that case, you can expect to get paid about about $300K or so, not bad! If your business has continuity products, i.e. subscriptions, you can get paid even more.
- If planned well, online businesses can allow you to quit your day job because of the inherent passive nature of nature of operations beyond the initial hustle. Obviously running a business requires running day to day operations, but you can easily build a team of overseas freelancers that carry out those tasks for you since everything is online.
Last but not least, subject matter discussed in this post, as well as others, is covered thoroughly in various online courses offered by Private Label Mastery.
Please feel free to share your questions or comments, I will be answering them over the next few days.