Watch the video or scroll down to read this lesson instead.
In the previous lesson you learned that there are endless ways to earn a living online, but some are easier than others.
In this lesson we’re going to run through 9 different types of online business, and figure out which is best for you.
You might hear of people making a website, slapping some Google Ads on there, and hey presto, they’re making loads of money.
Well, the problem there is that you need a ton of traffic to make any significant income from advertising. You need a steady flow of people visiting your website, or your Instagram, or whatever it is, and it usually takes months if not years to build that up.
So, making money online through advertising: not quick, not easy.
This basically means recommending other people’s products or services, and getting paid a commission for every referral.
And the challenge here is much the same as Advertising.
You also need to build a significant audience to make money doing affiliate marketing, and not only that, but you also need to earn the trust of that audience so they take your recommendations seriously.
And again, that takes time.
So, making money online through affiliate marketing: not quick, not easy.
Blogging / Vlogging
Last year I had more than 500,000 page views on my website and more than 300,000 video views on YouTube.
Those numbers actually aren’t huge – they’re mediocre at best, but believe me it took a lot of time and effort just to achieve those numbers.
And even with that many people reading my blog and watching my videos, I’m not making anywhere near enough money as a blogger or a vlogger to support my lifestyle.
So, making money online through blogging or vlogging: not quick, not easy.
Creating And Selling Digital Products
I’ve also done quite a bit of this over the years, having created and sold numerous ebooks, online courses, that kind of thing.
My latest digital product was an online course, and while that did okay financially and helped hundreds of people, it also took A LOT of time and effort to build, market and maintain.
I actually would have made a lot more money if I’d invested the same amount of time and effort into another type of online business that I’ll tell you about in a minute.
So, making money online through creating and selling digital products: not quick, not easy.
Yeah, not that.
Actual dropshipping is increasingly popular nowadays and several friends of mine do it.
It basically involves selling physical goods to customers without stocking those goods yourself. So you make the sale, and then get a wholesaler or manufacturer to ship directly to the customer.
And yes, this can be very lucrative.
If you’re just starting out, it’s going to take significant time to get everything in place and start turning a profit, because there are a lot of moving pieces.
Also, competition here is tough. If you find a nice niche for yourself, it’s usually best to keep it a secret, because there are lot of powerful competitors out there with plenty of resources, and they can quickly drive you out of business.
So, making money online through dropshipping: not quick, not easy.
That stands for Software as a Service.
An example of a SaaS business would be accounting software you pay for each month, or mailing list software you pay for each month. Dropbox and Slack would be famous SaaS businesses.
SaaS might actually be the best online business model out there. It’s software, so it’s all digital, and your customers usually pay you repeatedly.
I’ve actually spent significant time trying to build a SaaS business myself and even spent $3600 on a course to learn how to do it. My efforts ultimately failed – or at least they haven’t succeeded yet; let’s stay positive here – because there was just so much hard work involved.
I’ll likely give it another try some day, but I’ll do so with the understanding that it’s not quick, and it’s not easy.
I gave an example of this in the previous lesson. It was a ukulele teacher who earns $6,000/month from 1600+ fans on a platform called Patreon.
One thing I didn’t mention about that guy before is that he has made more than 500 videos and has over one million subscribers on YouTube. And if you didn’t know, creating that many videos and building that kind of following takes some serious work.
Now, as I said, that guy has about 1,000 people paying him a little bit each month. A more common variation of the sponsorship model is to have one or two big sponsors for your work.
People do this on Instagram, on YouTube, on podcasts… but to get just one or two big sponsors, you would still need to put forth significant time and effort to build up that big audience first.
So while this is a great model, probably my favorite actually… it is certainly not a quick or an easy way to make money online.
Now, let’s pause here for a second…
So far we’ve gone through 7 of the 9 types of online business:
- Affiliate Marketing
- Blogging / Vlogging
- Creating and Selling Digital Products
Now I want to be clear that these are all viable online business models and you’ll find no shortage of success stories for each of them.
But if we think of online business as a video game, choosing one of those 7 to start off with is like beginning that video game on expert mode, with loads of extra baddies and obstacles in your way…
Which is fine if you’re experienced, or if you just love making things hard on yourself.
But, assuming your main goal here is to start making some good money online as quickly and as easily as possible, then I would recommend that you start playing that video game on easy mode.
And what does easy mode look like for us?
It looks like our last 2 types of online business.
The first of those is…
Freelancing simply means providing a service directly to a client, and getting paid directly for it.
Online you can be a freelance writer, a freelance web designer, a freelance social media manager… etc. etc.
Several years back when I quit my office job I spent a whole year determined NOT to do freelancing, because let’s face it: it’s not glamorous, and it’s not sexy.
I saw freelancing as too basic and I didn’t want to trade time for money.
No, I wanted to become a real deal online entrepreneur, earning money in my sleep!
Unfortunately, what ended up happening was this: I spent my first year working for myself trying to be a real deal entrepreneur, trying to earn money in my sleep… and I didn’t earn much money at all :-/
It was only when I got serious about doing freelance web design that I started earning a consistent living online, which enabled me to travel all around the world, non-stop, for almost four years.
Since then I’ve met and corresponded with thousands of other online web workers, and without a doubt, the most common way I see them making a living online is through freelancing.
Even if you have no existing skills, you can literally start making money online as a freelancer within a week.
Now that’s something that CAN’T be said about all these other types of online business we’ve talked about already. Because with all the aforementioned, you usually have to put in several weeks, months or even years of work up front, before you start earning any significant income.
Not so with freelancing.
Freelancing is a much quicker and easier way to start earning money online. If I could go back in time, I’d have started doing it much earlier myself. I wouldn’t have wasted that whole first year.
All that said, freelancing is not perfect by any means:
- It can be tough to find clients
- You might have to start out with a low rate
- Your income can be up one month and down the next
And those things can be very difficult to adjust to if you’re coming from a 9-to-5 job with a steady paycheck.
Which brings us to the final type of online business.
This is a bit different from the rest because you don’t really run your own business here.
Instead, you become a remote employee of someone else’s business.
This is increasingly popular nowadays: more and more companies are hiring and working with people 100% remote.
And this can be the best of both worlds for you.
A friend of mine named Tom actually started out working online this way. He found a remote copywriting job and was paid a salary of $3000 per month. The company that hired him was based in the United States. Tom was based in Berlin. He only needed to work about 20 hours per week to keep that employer happy and earn his $3000/month. He was able to do his work from home, from a trendy cafe in Berlin, or from anywhere else in the world really.
Pretty good, right?
Of course, remote work isn’t perfect either.
- It can be hard to find a really good remote job (though these sites can help)
- They’re usually looking for a longer term commitment
- You might have to work set hours (which can be difficult if you’re eager to travel)
In other words, remote work is usually more steady and predictable than freelancing, but you won’t have quite the same level of freedom and autonomy.
Freelancing Or Remote Work?
Which you should choose depends on your own preferences.
But either way, as a freelancer or remote worker, you’ll likely be earning money online much quicker and easier compared to these other 7 types of online business we spoke about earlier:
- Affiliate Marketing
- Blogging / Vlogging
- Creating and Selling Digital Products
As I said, starting with any of those 7 is like beginning the video game on expert mode.
Whereas with freelancing or remote work, you’re beginning the game on easy mode, and thereby giving yourself a much better chance of success.
The Most Reliable Path To Build A Successful Online Business
Let me wrap up this lesson by clearly mapping out the most reliable path for you to build a successful online business.
This comes not only from my own experience, but also from the experience of 1000’s of people I’ve worked or corresponded with over the years.
This is the path of least resistance, the path I’ve seen work best for most people, so it’s likely to work well for you.
Get your online income flowing consistently as a remote worker or freelancer. Those are the quickest and easiest ways to do it, and you can even do a bit of both at the same time.
As you gain experience, increase your rate and reduce your hours.
You want to get to the point where you only have to work 15-20 hours per week, at most, and earn enough in that time to cover all your expenses and have some money left over.
Once you get to that point, you’re free.
Now you’re earning a comfortable living working part-time hours, and you can spend all your free time off traveling the world and having loads of mad adventures.
Or… you can spend your free time building one of those first 7 types of online business we talked about.
Because those ARE businesses worth building.
Yes, they are more challenging, and yes, they take more time to get off the ground – which is why I don’t recommend trying any of them right out of the gate – but, if you’re anything like me, you won’t want to play that video game on easy mode forever.
So think of remote work and freelancing as stepping stones – albeit very important stepping stones, but stepping stones nonetheless – to bigger and better online business models.
You start small, make things easy on yourself, get some money flowing, free up your time, gain some experience, and then move on to the big leagues.
Yeah, sorry about that.
And it’s about to hurt even more because I have a quick question for you.
And that is:
What is your #1 takeaway from this lesson?
Was there anything in here that particularly surprised you or stuck with you?
Please go ahead and leave your answer in the comments below. This is for your benefit, because when you take the time to reflect and put down in writing what you’ve learned, you deepen that learning.
So take two minutes now and share your #1 takeaway in the comments.