Is Starting an Online Business Worth It? What You Need to Know

Yes, the online business space might seem overcrowded, but starting an online business is still one of the best business models worth pursuing today. There is the technical element — certainly — but online businesses are one of the lowest risk business endeavors available due to their extremely low start-up costs.

For as little as $US11.95 you can purchase a month of web hosting, including a domain name, and have your website live within 24 hours. The low costs associated with starting an online business make it an affordable and low risk opportunity, and one that thousands of people begin every day.

Still, to decide if it’s really worth the effort, you need to know whether an online business is too technical for you, whether the market is too competitive or whether it will simply deliver too little in profits. Read on to learn the answers to these four important questions.

Is Starting an Online Business Worth It?

According to Statista, there are over 1.8 billion websites online and this figure continues to grow rapidly. Worldwide, there are more than 5 billion internet users. And in 2021, global retail ecommerce sales reached almost five trillion US dollars, with over seven trillion expected to be reached by 2025. This positive sales growth trajectory, coupled with low start-up costs, is why starting an online business today is definitely a worthwhile pursuit.

Is an Online Business Too Technical?

Along with purchasing web hosting and registering a domain name, there is the other technical necessity of creating a website for your online business. Although the idea of creating a website yourself might seem too daunting and technical, rest assured, it’s not difficult at all. Most web hosting providers today offer a type of one-click-install of WordPress. WordPress is an easy-to-use content management system that you can quickly create and maintain your website on.

Is Online Business Too Competitive Nowadays?

Just like in the offline world, there is competition in virtually every market you can think of in the online world. Some markets are more difficult to compete in than others due to tricky barriers to entry.  For instance, the finance market has many existing dominant competitors and there are regulatory requirements around certain elements such as providing financial advice.

Barriers to entry aren’t impossible to overcome but they can be time consuming and costly to resolve, which increases risk. Focusing on less competitive sub-niches in popular evergreen markets is an easier path to take. For example, consider the pet industry — a large and stable market. Using Google’s free trend analysis tool you can see that interest in the pet sub-category of dogs has been trending upwards over the past five years.

Choosing a sub-niche within the dog category is one way of breaking into this broad market. For example, Google trends shows the term ‘dog chains’ has had stable interest over time.  Analyzing this search phrase further using a keyword analysis tool, reveals many low competition opportunities. As shown in the image below, the phrase ‘gold dog chain’ is searched 6600 times on average per month in the US. Importantly, the difficulty level to rank high in Google’s search engine for a website targeting that search phrase is ‘good’, as represented by the green circle in the KD % (Keyword Difficulty %) column.

There are many related low-competition search phrases to target as well, with just a small sample of the available opportunities shown in the below image. By writing helpful content about dog chains, and more specifically about gold dog chains and collars, eventually your articles will have a chance of ranking highly in the Google search engine results pages (SERPs). This ‘content strategy’ is one method of driving free traffic to your online business. Content web businesses can be labor intensive at the outset, as writing quality content does take time. However, once your articles start ranking, the resultant free traffic your website receives will make all the effort and waiting worth it.

By digging deep below the surface of large growing or stable markets, you can carve out a slice of the market for your very own online business.

Is It Profitable?

For any business to be profitable its monthly revenue needs to exceed its monthly costs. A simple online business has very low ongoing costs and, as the business owner, by choosing to do most of the work yourself you can enjoy extremely high profit margins. For instance, if you write the content for your online business instead of paying a writer $40 per article, you will keep your costs down and margins high. As revenue increases you might choose to outsource some of the work to writers, virtual assistants and programmers to help the business grow faster.

There are several ways to generate revenue online, and deciding which methods to utilize comes down to personal preference and what best suits your chosen niche.

Three Popular Monetization Methods:

1. Advertising
2. Affiliate marketing
3. Ecommerce:
   1. Drop shipping
   2. Digital products
   3. Physical goods

To illustrate how affiliate marketing can be utilized to generate revenue, consider once again the dog chain niche. There are many pet and dog related products you can promote as an affiliate and earn commission from. For example, PawPack.com sends dog owners a box of all-natural doggie goodies when they purchase the monthly subscription membership. PawPack.com affiliates can earn up to $30 commission and the program is available via Share-A-Sale.

Exactly how much an online business will earn is impossible to predict as each niche and business owner is unique. However, if you focus on keeping costs down, driving free traffic to your site, promoting affiliate programs and employing other monetization methods, you will discover how lucrative an online business can be.