How much time does it really take to start a profitable online business?
Well, starting a business isn’t like cooking Maggi – 2 minutes and you got hot mouth-watering noodles!
It takes time.
How much time?
15 minutes? 15 days? 15 weeks? Or heck, 15 months?
Well, it’s definitely not 15 months! That’s perhaps for brick-n-mortar businesses.
15 weeks?
C’mon. You got to be kidding!
Look, here’s all it takes to start an online business. Okay, a profitable online business:
5 Rules To Start a Profitable Online Business
Let’s get the profitability sorted first. I know that’s making you more curious than starting the business itself. Or maybe it’s just how I’m feeling.
What the heck is profitability? How can you start a profitable online business? Isn’t profit something that comes after you start a business?
Excellent questions. Let’s begin right there.
Rule #1: Profit
You’re right. All those questions make so much sense. We’ve been taught from basic math that:
Sales – Expenses = Profit
You make sales.
Sales generate revenue.
Minus the costs and expenses. Lo and behold, you have PROFIT!!
Right?
Sorry to disappoint you. That’s WRONG!
Here’s your new definition of Profit:
Sales – Profit = Expenses.
C’mon. You’re juggling with words!
No, it’s not. Because it precisely tells you the first rule:
Always Put Profit First
Oftentimes, profit is an afterthought for business owners. This applies to freelancers and entrepreneurs alike.
You’re so focused on generating revenue. So much that you put back every $ into generating more revenue. And you take whatever remains as profit. That’s like tips!
Profitable businesses always count profit first.
Try grabbing this book by Mike Michalowicz called Profit First. In that, he nails this idea into your head really hard.
And now that we got profit sorted (kinda’), let’s look at the other 4 rules of starting a profitable online business.
Rule #2: Customer
Let me not mince words. If you don’t know exactly who your customers are, your business is dead.
Now let me tell you something in private:
(If you don’t know exactly who your customer is, AND if your business is successful, your business is by FLUKE or LUCK.)
(And yes, you’re probably running a “one product” business. Try launching more products, and you’ll see what I mean.)
Let’s get out of the brackets and talk more openly.
Because knowing exactly who your customers are, is magical. Quite literally.
If you don’t believe it, do this exercise for me, will ya?
Take a piece of paper (or open a TXT file, whatever) and write down the following:
- What is one big problem that your ideal customer is battling with?
- What other products (physical or digital) do your customers buy? Why?
- Where do your ideal customers spend the most time online? What do they do there?
- What is one belief they subscribe to?
If you’ve been able to answer these questions, you have a darn good idea of who your customers are!
And now that you understand exactly who your customers are, ASSEMBLE THEM!
Rule #3: Traffic
Speaking of assembling your customers, I realized it was time to talk about traffic. Because that’s the third rule to starting a profitable business.
Most businesses don’t turn profitable with one sale. And that’s 99% of them.
(the 1% is out-of-syllabus for this post)
And how do you generate more sales?
More people. That’s more traffic.
Imagine your business like the assembly line in a Tesla factory.
As an empty frame passes through different stations, they become more valuable. So much value that when they come out of the final assembly station, they get sold for over $100,000! (let’s say it’s a Model X)
Your business needs more traffic, so you can generate more sales.
But traffic for your business is people, not metal frames.
And people will not do business with you unless _____.
Fill in the blank👆.
Rule #4: Offer
That was so evil for me to leave you with a blank.
Sorry, I just like to do that. That’s just me. Anyway, let’s get back to where we left.
Why do people do business with you?
No c’mon, not because your business has a nice logo!
Yes, you’re right. Because you have an irresistible offer.
Now let’s try this quick test:
Open your Amazon app (or whatever you use to buy stuff online). Go to your order history. Look for an expensive product you ordered. Something that doesn’t fall into the category of grocery or essential goods. Maybe something in electronics or cosmetics?
Why did you buy them?
Chances are, that you bought them because Amazon had a special offer. It was perhaps topped by limited time. Or maybe Amazon had a special offer on a credit card that you happen to use.
It’s perhaps a product that was on your Amazon Wishlist, and you just could not resist Amazon’s offer. Plus that tempting Prime one-day delivery!
It’s irresistible offers that turn people (read traffic) into customers.
That’s rule #4 – create irresistible offers.
And that leaves us with one last rule to start profitable businesses.
Rule #5: Order Value
Businesses never make profit selling just one product or one service.
Even if they are, chances are, that they will soon run out of business. No, not because their products or services are bad. But because customers who bought their products are also looking for other stuff.
And that brings us to our final rule – order value.
What is order value?
In simple terms, order value is the amount of money a business receives from a customer in a single transaction. Depending on the nature of your online business, you can call it order value, transaction value, or something else.
And the goal of a profitable online business should be to see a higher average order value or AOV.
Businesses do this in a number of ways online. Order bumps, upsells, cross-sells, are just some popular ways of doing this.
How can you increase the AOV for your business?
If you’re running a coffee shop, think what else would your customers want when they buy coffee? An almond biscotti? Or maybe a sandwich?
In simple terms, think: what else will my customer be interested in? Something related, or perhaps something they would do or need after they use your product?
So, How Long Does It Take to Start a Profitable Online Business?
That’s the question we started with. It’s a shame we never answered that.
Perhaps, it’s never meant to be answered?
I guess so.
Because what really matters is STARTING a business, and now how fast you can do it. This ain’t a Formula-1 race!
But I do hope this post gave you enough to get started with starting your online business. Oops, I meant a profitable online business. Never miss the profit!
So put profit first and get started with your profitable online business with these five rules. And if you have decided to start a profitable business online, you’re probably thinking of a domain name and a website. In my previous post I write in detail about how to create a profitable landing page for your online business. Check it out.
If you have a question or just a thought, leave your comments below. And….don’t forget to share this post with your friends!