How to Start an Online Business: Why 2024 is The Best Year Ever to Start

Every article and video has the same message: This is the time to act, or it's too late!

Most of us ignore the false sense of urgency that marketers bombard us with. I'm tired of it, too.

I can say honestly that this page title is not clickbait. Starting a small business at this particular time in history is highly significant. The barrier to entry is lower than it ever has been.

Why “2024” is the Best Time to Start a Business

Let me paint the picture of why this point in human history has forever changed business ownership.

Where we are at:

• AI tools have simplified many complex business tasks, saving time and money.
• Starting a business is cheaper than ever. Many can be started for free.
• Remote work has made starting and running a business from anywhere easier than ever.
• Social media platforms provide a free and effective way to connect with your target audience.

I started my business in the dark ages

I can tell you from experience that starting a business or side hustle is ten times easier than a decade ago!

For context, I began freelancing graphic and web design services right out of college in 2001. It was primarily just a referral business that eventually grew so that I could sustain our growing family – check out my full story here.

When I would tell people I owned my own business and worked from home, they would say the same old things:

• Do you actually make money doing that?
• I can't do that; I need a steady paycheck.
• How do you get anything done at home? I could never stay focused!

10 to 15 years ago, being “self-employed” was code for “I have no job.”

It was an extremely uphill battle to make my business work starting when I did, but I stuck with it, and it was worth it!

In contrast, you here in 2024 have the greatest chance of succeeding with a small business than at any other point in history. A thriving online market and the ability to start small with remote work options make “now” a great time to launch your business idea.

The steps to start an online business

One thing I should clarify from the start is that when referring to a small business or online business, I am speaking to various types of small businesses you could operate. Here are some examples:

• A business that only operates online.
• A business where you provide a specialized service remotely or in person.
• a business that is local and may have a storefront.

If you operate almost any type of small business, you'll benefit by working through the following 7 steps.

1. Establish a Business Owner Mindset

Let me start by saying not everyone is meant to own a business.

Entrepreneurship isn't for everyone. Many fail because they ignore this truth. Not all thrive with remote work, self-imposed deadlines, and the demands of business ownership. It does come with a unique set of challenges.

It's okay to be an employee

Many need to hear that message.

The grass isn't always greener on the other side. Employment suits many people well, especially with a good employer, fair pay, and enjoyable work. That might be your ideal.

Often, people consider entrepreneurship because they're dissatisfied with their current job, not because they're suited for self-employment.

Begin by assessing yourself

Before you start your own business, I highly recommend assessing whether you have the right personality type to be a business owner. However, this is hard to assess honestly because of our confirmation bias.

So, what does it take to own and operate a small business?

It all begins with the right mindset to own and operate a business. All of the successful business owners I have known share the following characteristics:

Perseverance and persistence

There will be times when the path ahead seems impossible. Are you wired to push through challenges?

Be honest with yourself. Owning your own business requires some grit.

Perseverance and persistence are the main reasons business owners get through the “keep you up at night – stressful times.” Those who preserve will enjoy the rewards on the other side.

Flexibility and adaptability

In the business world, change is the only constant.

From evolving market trends to shifts in consumer behavior, you must adapt to stay relevant. Being flexible doesn't mean compromising your core values; no, you will lose yourself that way. Instead, it means understanding the landscape and pivoting your strategies to align with the current wave.

Take my industry, for instance; web design has changed significantly since I began in 2001. As long as I kept learning and adapting to new technologies, the same foundational principles of design and human nature applied.

Beyond technology and the medium, you must be flexible with clients' or customers' needs.

Owning a business will be a struggle if you only want to do things your way.

For example, a great business owner won't just run away from a difficult person; they will learn ways to adapt and connect with that personality type. Business owners don't flee challenging situations; they embrace them as growth opportunities.

Honesty and humility

Being brutally honest with yourself is critical to owning and operating a business. By this, I mean being realistic about your strengths and weaknesses. This should translate into humility and not pretending you have to know everything.

How do I accept criticism from others?

Seriously, try asking a few people who know you well: “How well do I hear and accept criticism?”. That's a fun activity for the dinner table 🙂

• We don't know everything – You must be open to being wrong. Most business ideas need refining, and we must be humble enough to accept that reality.
• Be willing to ask for help – Recognize when you need help and ask for it. Great leaders know this and thrive because of it.
• Get input on big decisions – Seek wisdom from others about when to persevere and when to pivot in your business.

If you don't honestly assess yourself, you'll quickly discover the truth about your character while operating a small business. Humble yourself before starting a business, or you likely will be forced to later.

If these qualities sound similar to you, then move on to the next step!

Learn more about the Business Owner Mindset.

2. Choosing The Right Business Niche

When exploring the idea of starting a business, most people fall into one of two categories:

1. You have skills or specialized knowledge – Your expertise or a unique product idea propels you toward entrepreneurship.
2. You have entrepreneurial desires – You aspire to start a business but are unsure about the niche, service, or product.

Most people I interact with are in the latter of those two positions.

Over the years, I have had similar conversations with many aspiring entrepreneurs. It usually starts like this: “I'm thinking about starting my own business, but I don't know what it should be.” This is actually an excellent place to be!

This is because you are still open-minded about how your skills could be applied to meet people's needs. You are in a better position to thoughtfully select an in-demand business niche.

Avoid business niche pitfalls

Beware of get-rich-quick schemes – Don't choose your business niche by following one of these YouTube abominations ↓

I created that banner with AI and Photoshop in less than 3 minutes, and if posted online, it could have sent people down the wrong path. These results are not typical for 99% of people!

Chasing the latest trends in saturated markets can be a recipe for disaster. Established businesses with larger budgets dominate these battlegrounds, and newcomers will rarely get noticed. I've attempted this many times, but let me tell you – you're not getting in that door!

Merge your knowledge and passion

The sweet spot for choosing a business niche lies where your knowledge and passion intersect. Think about it – you wouldn't try building a race car without knowing the difference between a carburetor and a spark plug, right? The same applies to your business niche. It would be best if you had knowledge and enjoyment in that area; otherwise, no one will buy what you're selling.

Strategies for finding your perfect niche

The good news is that you don't have to be an expert in your field. You'll learn tons as you go, and your existing knowledge base could be your goldmine.

1. Mine your experience – Identify your strengths and expertise. What skills have you honed over the years? These could be the foundation for your online business.
2. Research extensively – Dive deep into potential niches using tools like Google Trends and SEMrush. Look for rising trends and communities with unmet needs.
3. Feel the customer pulse – Customer reviews are invaluable sources of insight. Identify recurring problems in your chosen field and explore how you can provide solutions.
4. Test the waters – Start small by creating a mini-product or service to test the market. Experimentation allows you to refine your niche as you go.

Even if you start with a specific business niche, it might change as you learn and grow. Embrace adaptation and stay attuned to market demands.

People will always need something – figure out what that is and provide it for them.

By leveraging your skills, testing ideas, and remaining flexible, you'll discover the perfect niche to launch your online business.

Learn more about Choosing A Small Business Niche.

3. Creating A Small Business Plan

While urgency might sell products, statistics tell a different story. Small businesses with a plan are 30% more likely to succeed. Those are pretty good odds, wouldn't you say?

Write a business plan to increase your odds of success

What goes into a small business plan? Here are the key ingredients:

• Your mission, vision, and financial forecast – Think of these as your business's guiding star, its ultimate goal, and a realistic roadmap of how you'll get there financially.
• Determine why customers should care – This is your elevator pitch. In a nutshell, what problem do you solve others, and why are you the best solution?
• This is a living document – Don't think of your business plan as set in stone. The business world is dynamic and always changing. Review your plan yearly and adapt it as your business grows and evolves.

Remember, failing to plan is truly planning to fail. Taking the time to write a business plan is an investment in your success. It increases your odds, clarifies your vision, and keeps you on track.

Unless you are seeking investors, I strongly recommend not taking too long to create the business plan. Some people waste time on this step rather than making progress on the business.

Learn more about Creating A Small Business Plan.

4. Small Business Laws & Taxes

Before you breeze past this section thinking it's all boring red tape, consider that many new business failures can be attributed to permit and licensing issues.

Avoiding the legal pitfalls from the start is key to a smooth launch.

I'm not offering any legal advice – This is only a list of things to consider as you start your business. I had to go through this same process. You must do the research and initial setup yourself or hire a professional to guide you.

Check local business laws

Before starting a business, ensure the laws around that particular type of business don't limit what you hope to achieve.

This doesn't take long to do some initial research. While every city, county, and state has its own small business regulations. Doing some online research or even a quick call with the following organizations will give you 90% of what you need to know:

• Local chamber of commerce
• Local small business association
• Your city, county, or state website

When I started my business, I spent a good half-day reviewing these websites. It was absolutely worth the time!

Establish your small business entity

Now, you must determine what business entity you will operate under. Choosing the right business entity is crucial, impacting everything from taxes to liability.

Business entity = liability armor.

Pro Tip

For example, a sole proprietorship is like no armor, and your personal assets are at risk. An LLC is like a shield to protect your personal belongings.

Here's a breakdown of the most common business entities for small businesses:

• Sole proprietorship – This is the simplest setup – you and the business are legally the same. Think of it like a comfy robe – easy to throw on but offers zero protection for your personal assets if the business gets sued. It's okay to start here, but don't stay here too long.
• Partnership – Team up with a friend and share the profits (and the legal responsibility). Partnerships are great for collaboration, but both partners are personally liable for any debts.
• LLC (limited liability company) – This popular option offers a happy medium. It separates your personal assets from the business, like a suit of chainmail – flexible and protective. This is a fairly simple entity to set up, and you can stay safely as an LLC for a long time.
• S Corp – This is a special tax designation for corporations. It offers limited liability and allows profits to pass through to owners without double taxation (like a boss suit – ultimate protection, but a more complex setup).

If you're not detailed and researched, it may be wise to consult a lawyer or accountant to determine the best fit for your business.

Apply for an EIN

An Employer Identification Number (EIN) is like a social security number for your business. It's free to obtain from the IRS and is crucial for opening a business bank account and filing taxes.

You can use your Social Security Number when starting out, but an EIN is more professional, legally sound, and separate from your personal finances.

Small business taxes

Understanding small business tax basics is essential, and I have found that it takes a few years to master them with your own business.

You'll want to be aware of these key tax considerations for small businesses:

• Tax rates – As a small business owner, you'll pay income tax on your business profits. The rate will depend on your taxable income and how you file your taxes (sole proprietor, LLC, etc.).
• Self-employment tax – As an employee, your employer withholds Social Security and Medicare taxes from your paycheck. As a self-employed entrepreneur, you're responsible for paying both portions of these taxes (currently 15.3%) – but the good news is that you can deduct half of this amount as a business expense!
• Payment schedules – You'll most likely be responsible for estimated quarterly tax payments throughout the year. This helps ensure you pay your fair share and avoid a large tax bill come filing time.

Remember, this is a simplified overview. Consulting a tax professional is highly recommended, especially as your business grows. They can help you navigate the intricacies of tax laws specific to your business and location.

Consider legal consultation

Considering the legalities involved, consulting a business lawyer can be a wise investment. They can advise you on everything from business structure to contracts, giving you peace of mind and avoiding costly mistakes down the road.

Remember, a little planning now can save you a mountain of headaches (and potentially fines) later!

Learn more about Small Business Laws & Taxes.

5. Create a Business Brand

A consistent brand helps your business stand out and look professional.

Some businesses spend thousands of dollars on creating a unique brand, but for most businesses, that is overkill.

If you want to get started quickly, create a logo and establish your brand colors and font(s). That is enough to get you started. A brand style guide would be a future step you complete.

Here's the basics to get you started:

Logo design

• Keep it simple – Aim for a clean, memorable design. Ensure it looks good in different sizes (letterhead to billboard). Can you read what it says or understand the imagery?
• Get professional help – Use platforms like Fiverr for affordable logo design. Provide clear guidelines about your business and style preferences.

Request your logo in full color, black-and-white, and in vector format for many use-case scenarios.

Pro Tip

Brand colors

• Select a primary color – Choose one that represents your brand's personality. Consider industry norms (e.g., blue for trust in finance).
• Add 1-2 complementary colors – Use a color wheel tool for harmonious combinations. Include a neutral color for balance.

Use online tools like Coolors to generate color palettes.

Brand fonts

• Choose 2 fonts max – One for headings and one for body text. Ensure they're easily readable online.
• Match your brand personality – Serif fonts for traditional/formal looks. Sans-serif for modern/casual vibes.

Google Fonts offers a wide range of free, web-friendly fonts.

Remember, consistency is key in branding. Most people notice when a brand is sloppy and all over the place, and this affects whether they will do business with you!

Use these brand elements consistently across your website and all business materials to create a cohesive, professional look that people will trust.

Learn more about Creating A Small Business Brand.

6. Crafting Your Marketing Strategy

In today's digital age, your business's online presence can make or break its success. Consider this: 53% of all website traffic stems from organic search alone. That means potential customers are actively seeking out businesses like yours. The question is: are you showing up where it counts?

A simple marketing strategy can make all the difference in success or failure.

I won't even pretend to be able to cover all the strategies of how you could market your business. Depending on your target audience, location, and business type, those strategies could range from billboard ads to AI-generated TikTok videos. It's different for all businesses.

Let me start by covering the big 3 for 2024 (still the most profitable ones):

Your website + SEO

One of your most valuable assets as a small business is your website. You own it, you can grow it, and if done right, it can be very valuable in the long term.

You need to leverage your website by marketing it and making it visible to your audience.

Search Engine Optimization (SEO) lies at the heart of online visibility. It's not just about peppering keywords throughout your website; it's a nuanced strategy that requires finesse. Whether diving into the SEO world yourself or hiring an expert, understanding the fundamentals is crucial.

Take the time to research relevant keywords for your niche, optimize your website's structure, and create high-quality content that resonates with your audience.

Climbing the search engine rankings takes time and effort, but the payoff is invaluable.

Social media

Social media is a powerful tool for building brand loyalty and customer engagement.

We have access to billions of users across various platforms, and like no other time in history, the potential reach for your business is staggering.

Develop a social media strategy that aligns with your brand identity and objectives. Consistent posting, meaningful interactions with your audience, and creative content can help you stand out in a crowded digital landscape.

What would both capture the attention of your target audience and help them at the same time.

Remember, it's not just about amassing followers; it's about cultivating meaningful connections that drive results.

Pro Tip

Email marketing

Email may seem like a relic of the past in the age of social media and influencer marketing. However, don't underestimate its effectiveness.

Email marketing boasts an impressive ROI, with every $1 spent generating an average return of $42.

It's a direct line of communication to your audience, allowing you to deliver personalized messages, promotions, and updates straight to their inbox.

This part of your marketing strategy will consist of building an email list, crafting compelling campaigns, and tracking your results to refine your approach over time. The key is to provide value and foster trust with your subscribers, turning them into loyal customers and brand advocates.

Your marketing plan is a decision to be visible to customers. Let your online presence reflect that determination.

Learn more about Creating A Small Business Marketing Strategy.

7. Mastering Customer Service

According to Harris Interactive, a staggering 89% of customers have switched companies because of a poor customer experience. That's a statistic no business owner can afford to ignore.

Here's one of the most important pieces of advice I can offer on this site: Your skills and service don't have to be the absolute best in the world; people really want someone who will stick around, know their needs, and be there when they need help.

Of course, you need to help those people meet their business goals, but if you literally keep showing up and providing value to them, they will keep paying for your service. This is what has made my business successful for over a decade.

Customer service is becoming a lost art, so the bar is getting lower and lower for you to easily stand out!

Customer service tips:

Here are some crucial tips for mastering customer service in your business:

• Be a communication champion – Respond promptly and professionally across all channels – email, phone, and social media. Listen attentively, acknowledge their concerns, and keep them informed throughout the process.
• Empathy is key – Put yourself in their shoes. Are they frustrated? Confused? A little understanding goes a long way. This also helps when dealing with difficult clients.
• Go the extra mile (without burning out) – A handwritten thank you note, a surprise upgrade, or resolving an issue beyond expectations are small gestures that create big impacts. This one has earned me many referrals over the years.

Every interaction, every touchpoint with your customers, is an opportunity to build trust and loyalty – or risk losing them forever.

My mission in all my work is to serve people well, which has not led me astray. I encourage you to do the same.

Learn more about Small Business Customer Service.

Planning to Give Up

What does giving up have to do with starting a successful business?

This may seem like a strange section to wrap up this page, but hear me out. One of the main goals of this site is to help people start successful businesses that actually last. Since such a large percentage of businesses fail, I strongly encourage you to be one of the few who actually plan ahead for that possibility.

The rest of the article was about planning how to get a successful business off the ground, but you also need to plan that there will be moments when you'll want to throw in the towel.

What will keep you going during those tough times? How will you supplement your income if your business isn't generating as much as you hoped?

While you're in an exploratory mindset and the future is ripe with opportunity, I encourage you to take 30 minutes and write a plan for your future self if things are not going well with your business. Send yourself an email for a year from now to check in on yourself.

When you want to give up

Here are some tips I have personally used when I wanted to give up on a goal:

• Take a step back – It's okay to take a breather. Sometimes, stepping away from your business briefly can provide much-needed clarity. Have grace on yourself.
• Revisit your why – Remember why you started in the first place. What was your initial motivation? Reconnecting with your purpose can reignite your passion.
• Seek support – Don't be afraid to lean on your support system. Whether it's friends, family, or fellow entrepreneurs, talking about your struggles can alleviate some of the burdens.
• Evaluate and adjust – Take a hard look at your business model. Are there areas that can be improved? Are there new opportunities you haven't explored? Be open to making changes to keep your business afloat. You might have to pick up a part-time job to supplement your income; there is no failure in that.

Remember, planning to give up doesn't mean you will. It means you're prepared for whatever challenges come your way. I would love to help more businesses succeed by pushing through the hard times. Willpower won't help you if you already feel defeated. You need a plan to stick to when the road ahead is foggy.

The Next Steps

That probably feels like a lot of steps to accomplish.

My suggestion is to give yourself a time limit for accomplishing these items. I'm a perfectionist, so I know how important it is to impose a deadline on myself so that I can call something finished and move on.

If you are in a hurry, let me suggest you give yourself at least two days to complete choosing a niche, business plan, setting up your business entity, and marketing plan. You can always plan and refine further as you move forward.

You will need a website

No matter what type of business you have, you need a website. Don't let anyone tell you otherwise.

A website offers you full control over your brand, and it's an asset you own.

Don't rely solely on 3rd party services (TikTok, Instagram, Facebook) to present your business. I have watched those services come and go and evolve over the years, and I've seen people lose their audience overnight because they put all their eggs in one basket.

A business website is more valuable than ever, so don't skip this next step.

Learn How to Build a Website.