By John Sonmez April 12, 2018

Starting An Online Business #1: The Most Common And Profitable Models

Today I'm going to start a free series on starting an online business.

Starting the first video of the series, I'm going to talk about the best ways to create an online business, the most common and profitable models out there.

Keep in mind that this won't be your average “start an online business” course.

What I really want you to do like when you think about it like the best way to be successful in an online business is to do pretty much the opposite of what most people do which most people is they come up with an idea and they create some kind of product around that idea and then they try to find people to buy that thing.

That doesn’t work very well at all unless you just have something that’s so phenomenal that people are going to share it and it’s usually not a very successful road to go. It’s usually a lot of work.

So, building an audience is definitely key to starting an online business.

So, step with me and embark on this new journey where I'll take you hand by hand in creating an online business and understanding the best and most profitable online business models.

Transcript Of The Video

John Sonmez: Hey, what's up. John Sonmez here. A lot of you have been asking me about creating an online business and to do either some kind of course or some kind of tutorial on this. I haven't put together a course yet, but what I thought I'd do is start a series here on this YouTube channel about how to create an online business. In this series what I'm gonna be doing is I'm gonna be telling you about what an online business is. I'm gonna be going over the basics. How to get started. How you make money. Some of the myths and some of the things that are important to know about starting an online business. At some point in the future, I'll probably put together a course, and if you guys are interested, if you have questions, let me know. Leave a comment below. Leave me your questions, and I'll add to the series. This is probably gonna be at least probably a 10, maybe more, part series on starting an online business, because there's a lot to talk about here. There's a lot of things here.
The very first thing I want to do in this video is tell you about the basics of an online business and what it means, what it isn't, and just to basically clear up some misconceptions that I think people have about what an online business exactly is. I know when I was first trying to figure out a way to make some money, to make some passive income, I considered the idea of an online business, and I thought it was a really cool idea, but I didn't really understand what it was and how people made money. And even today sometimes I'm like, “Wow.” It's interesting. I like to hear a lot of people's explanations of how their business works and how they make money from those businesses. There's a lot of ways to make money.
When I first was trying to figure out how to start a business, I remember I read this book Rich Dad, Poor Dad, which you can check out here. I know some of you are like, “Oh that's a horrible book.” It's not the most investor savvy, most practical book, but it had a lot of wisdom at the time that changed my mindset. And after reading that book, I was trying to develop, trying to figure out what is an asset. What can I create or what could I buy that's an asset, besides real estate, which I was already investing in, or stocks. So, the best thing I could come up with was gumball machines. And actually, you know what, if you're interested in that story, you can find it. I have a book called Soft Skills, A Software Developer's Life Manual. It has nothing to do with software development, by the way, so even if you're not a software developer, go ahead and buy that book. You can the audio version and you can check it out or if you get the print version you can see my picture of the gumball machines and what not.
Anyway that was what I was thinking. I was like, “That's a business that can generate me money.” But now, today, I can think of a million ways to make a million bucks. That's what I want to share with you today is what are the ways, what is an online business. What does it entail? That wasn't an online business, by the way, the gumball machine, but what is an actual one and what does it entail.
There's a lot of different ways to make money online. There's a lot of different types of online businesses. In this series also, by the way, I'm gonna be talking about one specific kind of online business, or a section of online businesses that I think are easier to create and something that you can do without anything, any resources basically. Okay. The most obvious online business, I think that most people think of is to sell something online like a store. You see plenty of these. There's a company called Shopify that has made it real easy to create a storefront. You can sell things on Amazon. There's a lot of ways to sell a physical product of some sort online. In fact, I sell t-shirts. You can check out, I've got a link here where I sell t-shirts for Simple Programmer, which is my online business. It's different from this channel. We used to be part of this channel, but Simple Programmer, we sell t-shirts that we make money on as a physical product.
That's one way to have an online business. That's one thing where basically what you want to do in that case is you're gonna take some product. You're either gonna manufacture that product or you're gonna buy it wholesale at a cheaper price, and then you're gonna sell that product at a higher price, and you're gonna ship it to your customer. And a lot of people that try to create online businesses, what they want to do is they want to try and do drop shipping, which it sounds like a really good idea. What it basically is, is it's where you essentially have a site where you're selling a bunch of things and then instead of you having inventory and fulfilling the order yourself, you're going to a drop shipper who basically will automatically, like you send them the orders and then they send the item to the customer. You don't have to deal with any of that and you're basically making money off of the difference in the price. Okay. That's one way of doing it.
Now the problem with that is that it's often hard to find goods that you can drop ship or that you can sell online for a higher price, and you've still got to get traffic. But it is one way to create an online business and to make money, and there's a lot of people that are successful doing it. It's definitely one thing that you can explore. I've never really done the drop shipping. I mean technically my t-shirts are technically drop shipped. They're technically, I'm not shipping them out. The printer is printing them out and sending them out, so I guess that's technically drop shipping. But it's definitely difficult. There's definitely a lot of competition there and you've still got to get traffic and what not to the site. But it's definitely one way to make money.
Another type of business that's pretty common is a blog or website that makes money through the traffic that it gets there. It might not be obvious how these companies, how these online businesses make money, but they can make it though a lot of different methodologies, which we'll talk about in some of the later videos, from advertising to doing affiliate deals and promotions, to selling products, whether physical or digital.
Next up, what other basics do we have here in online business? There's also things that don't quite fit the mold, like this YouTube channel. This is an online business to some degree. I make money from advertising. I could sell products on here. I've built an audience. I've got a channel on here. It could be part of another bigger business, like it was part of Simple Programmer, or it could stand on its own. People also do coaching online. A lot of people from their YouTube channel, they might sell coaching or they might sell some kind of services and things like that. There's a lot of ways. Podcasts. You've probably seen podcasts. Podcasts can make some money for advertising. They can also make money by selling a product and so forth.
Then you've got the weirder type of things. You've got a lot of tools out there where someone is, maybe they have a free tool. I know this one guy that has a calendar tool that actually generates a calendar for school teachers and people that are trying to generate calendars for work. He makes money through just Ad Sense, Google ads that are on that site, but people are using that tool. The tool is what's generating him the traffic, and then the ads on there is what's generating him the money. Another example of that would be I know another guy who has a typing speed test online, and he makes a lot of money from that traffic that he gets from there. As far as, I'm trying to think one other one I had in mind here for online business. What is it here? Okay.
Then there's some of the other things like selling software. I think this is another one, is the selling software and the SaaS side of it. Again, some things that I'm not really gonna talk about a lot in this series because those take often a lot more time and a lot more effort. Something that's totally do-able and if you understand some of the economics of what I'm gonna be talking about in this series, you can definitely do those. What is a SaaS business? It's software as a service, or you can sell software in general. In that case maybe you're selling a software package that someone downloads, or better yet, can you get them on a monthly subscription to have access to your software.
There's a bunch of examples of this. For example, one of the ones, like some of the ones I'm using is I'm using an email software called Drip. Another one that I use is my hosting software. I've got certain hosting software that I use. It's software as a service that manages my hosting. I've got for YouTube, I've got tools that analyze my YouTube videos and give me metrics. They give me reports and stuff like that, and I pay 30 bucks a month or so for that. I've got a lot of different software out there that I utilize. QuickBooks online, it's accounting software. All of those things are software as a service. Those are all business models that you can use online.
Basically if you think about it, there's really no limit to what you can do online. If you want to get some ideas, go to a site like Flippa.com and check out and see what kind of businesses people have online that they're selling and they're making money from various things. But generally, and we'll talk about this in one of the next videos in the series, but generally people are gonna make money online, either through selling something directly or through some kind of advertising where they're gonna make money from advertisers, or they're gonna make money from some kind of affiliates where they're selling something and they're getting a kickback or they're promoting something and they're getting a kickback from that, or some kind of service that they're gonna provide. It could be a coaching service. It could be an actual service, more like a brick and mortar business or again, software or software as a service falls into that category of some kind of product that they're providing. And it might be a product and a service at the same time.
Again, what I'm gonna be talking about in this series is mostly how to create an online business that is focused on gaining traffic, gaining an audience. Something like a blog, a YouTube channel, some people do it on Instagram and Snapchat nowadays, but basically this idea of building, doing content marketing, producing content like I do on this YouTube channel, and then turning that into money, into a business. Because that's what I know best. That's what I find works the best for most people because it doesn't require them to have any resources to do that.
That's the basics of an online business. There's not a whole lot to the actual … It seems real simple, but when you get into the details of everything that needs to be done and how things are done, that's where the complexity is out there. Okay. Stay tuned for the next video in the series. I'm gonna be talking about online business myths and busting some of the popular myths that are out there about online businesses, and you don't want to miss that, so make sure you click the subscribe button. Click the bell, so you don't miss the notifications for when the new video comes out in this series. Let me know if you've got some questions and stuff, you have ideas for what you'd like to see in this series. I'm gonna start doing some more series on this channel. Let me know and I'll talk to you guys next time on here.

About the author

John Sonmez

John Sonmez is the founder of Simple Programmer and a life coach for software developers. He is the best selling author of the book "Soft Skills: The Software Developer's Life Manual."