There are a lot of varying ways you can invest in an online business. You can start something from scratch, like a blog, affiliate site, or eCommerce site.
There are viable opportunities to get a good return on your investment. Things like social media video ads can fuel sales and revenue, and an online business can offer you diversification in your revenue streams. If you build the business and scale it, you might have financial freedom from your day job.
The following are some of the more compelling benefits and things to know about investing in an online business.
Creating Passive Income
In some cases, and depending on the business model, you may be able to use an online business as a passive income stream. That means that maybe you have a blog, and you’re earning money from ad revenue. As your audience grows, your revenue goes up, even though you’re not actively selling anything.
Active income is the juxtaposition to this where you’re doing work, and that work is then producing income for you.
Passive income is a goal for most people because it gives you freedom in how you spend your time.
With an online business and especially one producing passive income, you don’t necessarily have the high levels of stress that a traditional business owner might have, especially someone with a brick-and-mortar business.
While passive income isn’t easy or guaranteed money, if you do manage it properly, it can reduce your financial stress in many areas.
Probably behind passive income, as the top reason people invest in online businesses is scalability.
If you have a brick-and-mortar or a more traditional business, scaling it up requires a lot of investment capital.
For example, if you have a traditional retail store and you’d like to scale it, you’d have to perhaps open up a new location, meaning you’d have to sign a new lease, pay people and get your inventory, or you’d have to expand your current business. Both require money, and sometimes quite a bit.
Online businesses are inherently scalable. If you want to offer new products or reach new customers, you can do so relatively easily.
Online businesses without a physical product have the easiest time with scalability.
You can use ads and have those scale as your business grows too. Initially, you might not have a lot to invest in social media and PPC ads. Then, as your business grows, you can put more of your money back into your ads
Start With Very Little Upfront Investment
Over time, you might create a business where you’re investing more and more into it because it’s doing well. You can reinvest your revenue, but at first, most online business models don’t require a huge investment.
For example, some of the most popular models like dropshipping don’t require that you maintain a big inventory, nor do you need to deal with anything like getting your products delivered to your customers.
You reduce a lot of the financial risks of, let’s say, buying products and paying for warehouse space.
You simply focus on marketing and advertising. Your only goal in a dropshipping business is connecting with customers and making sales. Once you make the sale, everything else is handled by other people.
Affiliate marketing is similarly low-risk in that it requires very little upfront investment. If you pick a profitable niche and create compelling content, paired perhaps with some paid advertising, you can build a scalable business. You don’t have to maintain inventory or ship anything to your customers. You’re just getting a commission each time they click one of your links and end up making a purchase.
Blogging can also be low-risk and has low barriers to entry.
You can create a site and get hosting for minimal money, and then start developing your content. If you have high-quality, original content, then it’s going to drive traffic to your site.
You can monetize blogs through advertising. You can have pay-per-click ads like those served by Google AdSense show up on your site. Every time someone clicks on an ad, you’ll earn revenue.
You can do affiliate marketing or blog through a video format too. YouTube lets you monetize videos that you make on subjects. You create a YouTube account, upload videos, and then you can monetize your videos and channels through your settings.
A really big market right now that can end up earning you a lot of money is the creation of digital information products. Digital information products can include courses, videos, or something like an eBook. You create the content initially, and then you market and advertise it to earn passive income on the sales.
You have to invest your time and potentially some money upfront, but once you have a product that your audience feels brings value to their lives in some way, you can set it and forget as far as your overall sales strategy.
What About Buying a Business?
Another option if you want to invest in an online business is to buy one that already exists.
You can go through a platform like Flippa to do this, or if you have an online business in mind, you might contact the owner and see if they’d be willing to sell it to you.
You can buy online businesses for prices ranging from less than a hundred dollars up to millions of dollars.
Empire Flippers is another choice where you can go to search for online businesses that are for sale. Empire Flippers is good about curating their lists of available businesses, so you’re not going to run into low-quality sites, or at least you shouldn’t.
You’ll usually have the option to either buy the site right away or you can make a deal with some sellers who are willing to negotiate.
The decision to invest in an online business can mean you put up very little money but perhaps quite a bit of work initially, or if you have the capital, maybe you invest financially in a business that’s ready to go.
Either way, you should plan on continuing to advertise and market the business to keep it as a recurring, passive income stream. Read more…