If you’re thinking about starting an online business, it pays to know what to expect before you begin. Doing so will help ensure an online business is a good fit for your lifestyle and personality while helping prepare you for the highs and the lows.
This article shares the benefits that I’ve experienced owning an online business while giving equal attention to the challenges I’ve faced to help you decide if you should take the leap and start your own.
Article Contents
Your Motivation Matters
Before diving in, it’s worth reviewing why you’re looking to start an online business to ensure that motivation aligns with realistic expectations for what you’ll be able to achieve.
If you’re looking to make money fast, want an easy paycheck or a magical passive income stream, you’re not in the right place. There are plenty of self-proclaimed experts and online gurus willing to sell you that promise, but that’s not what we’re here to cover.
Instead, through this website, I’ll teach you how to build a reputable online business that delivers real value and, in turn, makes you money. A company you’re proud to run and share with friends and family.
The following are a few excellent motivators for starting an online business, which I experienced firsthand while building my own.
Starting A Productive Hobby
In 2013, I started TennisCompanion, my first website, which I did purely for fun as a hobby to enhance my skill set as a digital marketer.
At the time, I was the Website Product Marketing Manager for my company and was responsible for our digital marketing efforts. Working for a startup, I was hands-on in my role, but I wanted to dive deeper to understand what it took to start and build a website from scratch.
It was exciting because I could apply my experience and take bigger chances with zero risk. In turn, this hobby helped me excel in my role by giving me a more fine-tuned understanding of the mechanics behind the strategies I was employing for my company.
Although my skills and experience were relevant in this case, it wasn’t necessary. Regardless of your background, building a website as a hobby to explore a topic of interest, express yourself, share your thoughts, or learn something new is an excellent motivator.
Initially, I had no intention of making money. However, I was able to turn my hobby into an online business by making a few small changes to my approach that didn’t require any extra effort. As a result, my hobby was more productive than ever.
Supporting a Community or Cause
I started playing tennis when I was five years old and played competitively through college. Along the way, I met awesome people, enjoyed incredible experiences, and found a bit of success.
When I was exploring my options for starting a website, tennis was a natural fit. As a skilled athlete, I knew the sport well and felt I could share my knowledge with other tennis players to give back to the community that had given me so much throughout my life.
As a bonus, I knew that I’d expand my knowledge of tennis by discussing it and exploring its nuances, which made it that much sweeter.
Perhaps there’s a community you’re passionate about supporting or a cause you’d like to raise awareness for and champion. If so, starting a website is an excellent means for accomplishing the task, which you can turn into an online business that makes you money.
Making Some Extra Money
Although my path to building an online business started as a hobby and later transitioned into a desire to make extra money, there’s nothing wrong if your motivation begins here.
Let’s be real. A few hundred extra dollars a month can make a world of difference for most of us. Whether you’re looking to pay down credit, go on a vacation, support your children’s interests, buy a new car, or enjoy some date nights out with your partner, a little extra money can go a long way, and starting an online business can get you there.
With that said, it’s important to recognize that you won’t make money overnight, and it will take genuine effort to make it happen. However, the upside is that it can be a ton of fun, and when you first start making money, this motivation will likely become more meaningful.
Quitting Your Job
I worked for my last company for nearly ten years, and although I thoroughly enjoyed the experience and learned a lot along the way, I knew I’d eventually move on to something new.
Around the same time I started to question whether it was time to move on, my online business, which was purely a side project, was gaining meaningful traction. I eventually capitalized on the momentum and transitioned to working on my online business full-time.
If you have a desire to quit your job, then an online business is a viable option, but there’s a caveat. I wouldn’t recommend most people leave their job to start an online business as it carries unnecessary risk and pressure that is likely to derail you.
Instead, I’d urge you to start your online business while happily employed so you can build it to the point that you can opt to quit your job when you feel ready, reducing risk and alleviating pressure.
I’ll paint a clearer picture of why you should avoid quitting your job without establishing a base for yourself when I discuss why you shouldn’t start an online business later in this article.
Building a New Career
There are numerous reasons you might want to launch into a new career. Here are a few that might resonate:
- You’re not enjoying your work.
- You’re not being challenged.
- You’re overworked and stressed.
- You’re feeling burnt out.
- Your company or industry is stagnant.
- You have limited growth potential.
Regardless of the reason, starting an online business is a great way to energize yourself outside your current job. As counterintuitive as it may sound, it’s possible to derive outsized satisfaction from working on a side project that keeps you motivated in your full-time role.
Toward the end of working at my last company, I started to feel burnt out, my energy depleted, and I found myself unnecessarily stressed.
However, despite the extra required effort to build my online business outside of my job, I found the work exciting and the growth I saw energizing, which eventually led to the opportunity to take it full time.
With some patience, you can transition into an entirely new career with your online business, which is an exceptional motivator and a great reason to get started in the first place.
Benefits
Starting an online business is incredibly rewarding, which is reason enough to give it a try for many. However, the benefits of owning an online business far exceed personal satisfaction.
At its core, an online business delivers greater personal freedom, which provides you with the flexibility to design a life of your choosing. Here are some of the advantages I’ve enjoyed along the way.
Minimal Startup Costs
To start an online business, you will need a reliable computer with a solid internet connection and a website. Anyone who tells you differently is trying to sell you something.
You likely have the first two covered. If not, start there and don’t spend more than $1,500 on a computer. Nearly everything for your online business can be done through a web browser like Chrome or Safari, so the emphasis should be on reliability, not power.
Regarding your website, it’s now easier than ever to launch a web presence as the foundation for your online business, and the cost to get started is minimal.
You can be up and running for as little as $20 upfront. This affords you two massive benefits. First, you can get started right away because you don’t need to save startup capital. Second, it eliminates virtually all risk because you’re not putting a significant amount of money on the line.
Once you establish your business, there are a handful of tools you can invest in which can enhance your results. However, these are few and far between and not required initially.
Unlimited Areas of Focus
When starting an online business, you’ll need to choose a niche or area of focus, which is only limited by your creativity.
From photography to biking, cars, board games, fashion, cooking, bird watching, gardening, and everything in between, there’s an unlimited number of topics you can use as the basis for your business.
You can follow your interests wherever they take you. I chose tennis for my first online business. Now I’m starting all over again by discussing how to build online businesses with this website.
Significant Growth Potential
An online business extends your audience and potential customers to anyone in the world who’s interested in your topic, which means your growth potential is massive.
In contrast, the growth of a brick-and-mortar business is heavily limited by its physical location and capacity to serve.
Today, my business sees visitors from nearly every country globally, dramatically expanding my opportunities and ability to earn.
Greater Income Control
When you own your business, you’re in complete control of the decision making, effort, and resources you apply to grow your income. With a solid growth plan, the more effort you put in, the more you get out.
Since 2013 when I started my business, I’ve experienced a minimum of 40% revenue growth annually. Can you imagine getting a 40% raise? That could be life-changing, let alone achieving it year after year.
As an employee, you can excel at your job and still be limited in the amount of money you make. Perhaps raises are capped and barely keep up with inflation, or the business can’t afford to give you more money. Regardless of the reason, it can be frustrating.
Work From Anywhere
By their nature, online businesses are location agnostic, so you can run them from anywhere in the world with a solid internet connection.
The freedom to work from where you choose is liberating. You’re never tied down to a specific location, can freely move as you’d like, and can take extended trips where you mix work and vacation.
During the pandemic, my wife and I decided to move back to the east coast after spending nearly 15 years in Southern California together. I was able to pick up and go at any time, no questions asked. Luckily, my wife’s company allowed her to transition to a full-time remote position, which isn’t possible for many professions, even after the pandemic.
We love it in San Diego, so we travel back regularly and extend our trips so we can spend more time there while working. We often do the same for vacations, lengthening our trips to get more from our travel expenses.
Although we’ve been spending time getting settled back on the east coast, we’ve contemplated traveling a month or two abroad, mixing vacation with work, which would never have been possible beforehand.
In the future, if we ever decide to move again, we won’t have to ask any questions. We can simply pick up and leave with zero impact on our income, which is liberating.
Choose Your Schedule
In the 1800s, the concept of the eight-hour workday first surfaced as a way to protect workers. More than a decade later, Henry Ford introduced the 40-hour workweek. Today most companies still use the same old-fashioned schedule despite dramatic shifts in the type of work people do.
In many cases, our lives would be simpler if we could mold our work to the rhythm of our lives instead of the other way around.
Perhaps you work best in the morning or late in the evening, prefer to put more hours in fewer days, or just plain desire to work fewer hours. It’s your call when you’re running an online business.
As long as you’re comfortable with the output, you can choose to work as much or as little as you’d like on your schedule.
For me, that means working an abbreviated day. Instead of eight hours a day, I work seven on average. I usually start at 10 – 11 am and work until 5 or 6 pm, and I don’t take long breaks because I don’t feel the need.
Keeping to this schedule gives me ample time to spend time with my wife, walk my dog, exercise, stretch, and meditate before I start working. After, I get to work and stop when I’ve hit a natural point of concluding my day instead of waiting until the clock strikes five.
For me, it’s less about working fewer hours and more about the flexibility to organize my day how I choose.
Unlimited Vacation
For many people in the US, the standard is 10-14 days of vacation a year and a few holidays, which vary among businesses.
If you’re one of the lucky, you might be able to earn extra vacation the longer you’re with a company. Even rarer, your organization may allow for unlimited PTO, which people seldom take advantage of due to heavy workloads or fear of repercussions from their managers.
In all of these cases, you’re required to get approval from your boss and often have to time your vacation around the business’s cyclicality or events that you have little control over.
All that goes away when you’re running an online business. You simply take the time when you need it. There’s no need for approvals or guilt trips from bosses, and if you step away from your computer for a few days or weeks, your website can continue making you money.
Of course, you can’t take half the year off and expect good results, but you can easily take what you need when you want it.
Last year, I took about six weeks off and didn’t think twice about it. I also worked more abbreviated days than I can count. Nothing fell off the rails, and yes, I still grew my business – 46%, to be exact.
Be Your Own Boss
Working with a great manager can be immensely positive and lead to tremendous growth for an employee. Unfortunately, it’s not guaranteed, and a poor relationship with your boss can be toxic and is regularly observed as one of the top reasons people leave their jobs.
When you start an online business, you’re in charge. From setting goals to establishing priorities and deciding how to tackle projects, you get to make the decisions. Not everything will go your way, but you’ll learn from your mistakes and improve every step of the way.
I love this part of running my business. It’s challenging yet incredibly rewarding to be in the driver’s seat and own the outcomes.
No Meetings
I’m not inherently against meetings, which serve a crucial purpose in the successful operation of any business with multiple contributors.
However, in my experience, most meetings are poorly run, wasteful, and often used as a crutch to micromanage employees who haven’t established clear goals and a plan to achieve them.
Running an online business, you can minimize or eliminate all meetings, leaving you free to focus exclusively on the activities that generate results to build your business. As a result, you can condense your days and work fewer hours because your time is focused and productive.
Since running my online business full-time, I’ve eliminated all meetings. Since 2020, I’ve scheduled fewer than five meetings, two of which were with my accountant, and I wouldn’t have it any other way.
Full Equity
When you build an online business, you’re building an asset that you can sell in the future if you decide that’s the right move. As the business owner, you have full equity, meaning you would be the direct recipient of the financial reward if you sold it.
At a publicly-traded company, you might receive stock. Alternatively, some small companies and startups offer stock options giving you the right to purchase the stock if the company ever sells or goes public. In both cases, you’re only getting a small piece of the pie.
It’s less common for people who start online businesses to consider the financial implications of an exit. However, it’s a real incentive that can be lucrative if you consistently grow your business over time.
I love running my business and have no intention of selling anytime soon. However, there are excellent services to track its value which I keep tabs on and I find incredibly motivating.
Save Time & Money Commuting
Time is every human’s most valuable resource, and it’s finite. Spending hours commuting every week is highly unproductive, often stressful, and time you’ll never get back.
According to the US Census, people’s average one-way daily commute is 27.6 minutes. That’s 4.6 hours per week, 18 hours per month, and 220 hours or nine full days per year. My commute was 30-60 minutes at my last job, depending on the day, so I can relate.
Yes, I could listen to audiobooks, which I often did, but there was a clear limit to how much I could get from my time commuting. Plus, it cost me money in gas and wear and tear on my car. At $45 a fillup on average, I spent over $2,000 a year on gas alone.
I now run my business from home. When I’m ready to work, I step over to my desk, sit down, and get started. I save an hour and a half of my time per day, putting money back in my pocket, and saving myself the mental and physical stress that inevitably accompanies a commute.
Challenges
The benefits of starting an online business are significant and can change your life for the better in many ways. However, there are equally as many good reasons not to get started, and your success is ultimately tied to your ability to manage these challenges.
Rather than sweep them under the rug and ignore them, you owe it to yourself to become familiar with the disadvantages so you can set realistic expectations and avoid surprises that can derail your success.
I’ve dealt with each of the following firsthand, and many of them are recurring themes that require regular attention. However, none of them are dealbreakers, especially if you’re well-prepared for them.
Success Takes Time
When starting an online business, or any business, you will find that success takes time. How much time depends on multiple factors, including some outside your control.
However, you can safely assume you’re going to need at least six months before you start seeing results and making money online. There are rare exceptions where people find success earlier, but I wouldn’t bet on it. Instead, I’d plan conservatively, and if your growth accelerates faster, it will be a welcome surprise.
With that in mind, I wouldn’t quit your day job. I’d encourage you to carve out time on the side to start. Once you start gaining traction, things can build surprisingly quickly with focused effort. If you’re dedicated to transitioning to your business full-time, it can take a few years.
As part of building this website, my goal is to provide you with a lightweight framework that allows you to see results as soon as possible, but I’d be doing you a disservice if I told you it would happen fast.
You’ll Lose Money to Start
Recognizing that it will take time for you to begin seeing success, it’s worth noting that you’re going to lose money to start.
If all you do is pay for hosting, you’ll be out a minimum of $120 after the first six months, and you’ll continue to lose money until your earnings exceed your base website hosting investment of $20 per month.
Although this isn’t a huge investment over six months, I hate to trivialize money, especially when every dollar often counts. Furthermore, many people get impatient, and when they don’t see immediate results question why they’re spending any time and money.
Regardless, expect to lose some money up-front. The more diligent you are about working on your business, the faster you’ll start to earn.
There’s a Learning Curve
Whether you’re a seasoned online marketer who knows how to build an audience or a complete newbie, you will be playing in unfamiliar territory if you’ve never created an online business before.
For me, it’s exciting to step into something new, learn, and grow. However, that doesn’t mean it’s not uncomfortable or frustrating at times. You will make mistakes, find yourself confused, and at times feel lost, which can overwhelm even the most level-headed person.
However, if you accept that things might feel slow initially and that learning is part of the process, you’ll be better equipped to handle the learning curve and more likely to succeed.
Even with years of experience in marketing and building websites, I regularly encounter unfamiliar territory. You’ll quickly learn that projects or materials that often start off confusing become second nature with some diligent effort and the will to persevere through the unknown.
Unstable Earnings
As an employee, you’re guaranteed a salary or a set number of hours at a predetermined wage, which allows you to plan how much you’ll earn independently of how well the business performs. For many, that’s a significant advantage because it makes planning and budgeting easier.
Unfortunately, it rarely works out that way when running an online business. Instead, in some days, weeks, and months you’re going to make more or less money than others as your earnings will ebb and flow with the seasonal changes of the niche or business you choose.
If you have a full-time job and build your business on the side, this is less of an issue unless you decide to commit your earnings to a recurring expense like a car payment. However, the moment you start relying on your business as your sole income, you need to be more diligent about planning, i.e., saving, to withstand the ups and downs.
The swings can be significant and uncomfortable, especially early on. For example, during my best month last year, I made four times more than my worst month. However, the longer you run your business, the better you’ll begin to understand its seasonality and can plan accordingly.
Unstable earnings also require you to show restraint. Just because you have a great month doesn’t mean you’ll see the same results the following, so managing your spending is essential.
Lack of Benefits
When you run an online business as a side project and start to make money, it’s easy to get excited and lose sight of the value your employer brings to the table with their benefits package.
According to a US Department of Labor study, benefits accounted for roughly 30% of an employee’s compensation, but that’s not money you ever see in your pocket, so it’s easy to discount it.
Your benefits can be extensive and significantly greater than 30% for some companies. Here’s a sample benefits package that many tech companies are offering these days:
- Health insurance
- Dental insurance
- Vision insurance
- Life insurance
- Stock
- Employee stock purchase plan
- 401k + matching
- Unlimited PTO
- Generous holiday calendar
- Wellness days
- Paid volunteer time
- Paid travel for work trips
- Professional development
The above benefits package is pretty cushy, and I recognize that not everyone’s is that extensive. However, it helps paint a picture of the types of benefits you’re giving up if you decide to start your own business.
Some people, especially when they’re younger, will be comfortable forgoing these benefits when they strike out on their own. However, the one I’d encourage you to plan for is health insurance, as going without it carries unnecessary risk.
You’ll be directly responsible for the expense unless you’re young enough to still be on your parent’s plan if you’re eligible. Otherwise, you can hop on your partner’s plan if you’re married, which I did when I moved to full-time on my business.
In a nutshell, don’t underestimate the value of your benefits package, and keep in mind that it’s something you’ll lose working for yourself.
Total Responsibility
Although starting an online business gives you greater flexibility and control over your work, it also comes with significant responsibility, which can feel overwhelming at times.
Not only are you the sole person responsible for getting meaningful work done that produces results, but you’re also accountable for:
- Managing finances
- Organizing taxes
- Paying bills
- Forecasting results
- Setting goals
- Tracking results
- Maintaining your website
- Troubleshooting tech issues
- Communicating with users
- Working with partners
- Writing and publishing content
- Building creative assets
If you have a physical product you’re selling, you may also be dealing with designers, manufacturers, shipping, fulfillment, customers, etc.
Working for a company, it’s not uncommon to have at least one person responsible for every one of these line items, but it’s all on you when you first start running an online business.
Most importantly, you are the sole person responsible for your results. If you’re not growing and making more money, you are the only one to blame, and there’s no one to point fingers at.
When things are going well, it’s incredibly gratifying. However, when things go south, and they eventually will, you’re on the hook and responsible for maintaining a level head and getting things back on track without anyone holding your hand.
I’d be lying if I didn’t say it can be overwhelming at times, and things most certainly fall through the cracks. Still, I enjoy the variety, automating as much as possible, outsourcing where necessary, and the challenge of doing more with less.
Lack of Time & Resources
There’s nearly always a lack of time and resources at companies of all sizes, so you should expect the same for your online business.
When running your own business, it’s easy to fall into the “if only” trap where you feel like things would be better if only you had more time, help, money, training, or experience. The list goes on and on.
You will inevitably feel strapped for time and resources when you start an online business because you’re working by yourself, and there are only so many hours in a day. Plus, if money wasn’t a problem, you probably wouldn’t be starting the business.
The key to a lack of time and resources is thoughtful planning and focus, which is easier said than done. You have to say “no” way more than you say “yes,” and trust the plan you put in place for your business will pay off while remaining open to pivoting when you’re not seeing results.
It gets easier with experience, but it requires discipline, and the challenge is ever-present. Furthermore, it gets trickier as you achieve success and are presented with new opportunities.
Working Alone
Running an online business can be a lonely endeavor, especially if you’re accustomed to working on a team. Although some teams function better than others, nearly all provide some of these benefits:
- Social interaction
- Shared expertise
- Constructive feedback
- Support
- Motivation
- Community
- Education
- Praise
Some people thrive working alone, while others find it challenging. However, if you’ve never worked alone, it’s hard to know exactly how you’ll feel until you’ve been at it for a while.
I’m an introvert, and as much as I love working on a team, I’ve always felt comfortable working alone. Roughly a year before working full-time on my business, my team agreed to allow those who could reasonably work remotely to do so a few times a week, and I loved it.
However, even as someone who thrives working alone, I was struck by how lonely running my business can feel. During the week, I nearly only spoke with my wife, who was around in the mornings and the evenings.
I quickly learned that I undervalued the social element of working on a team, which was exacerbated by the pandemic. I started full-time on my business in January of 2020, right before the world locked down.
There’s no doubt that the pandemic was unique, but it helped shine a brighter light on the value of a social work environment. Although I adapted and continue to enjoy working alone, it’s not for everyone, so it’s worth considering before starting an online business on your own.
Difficulty Setting Boundaries
Setting boundaries between work and life can be challenging regardless of your work situation. It can be further amplified when you run your own business because you’re the sole person responsible for its success and driven to see it grow.
It’s easy to sit down at your computer earlier when working from home, and it can be more challenging to disconnect at the end of the day. You may also be tempted to wrap up a project or get in a few extra hours during the weekend, causing your weekly hours to bloat.
Occasionally, there’s nothing wrong with putting in more time. However, it can become problematic when it turns into a habit as it can eventually lead to poor quality work and decision making, burnout, and problems with relationships.
Alternatively, you may find it challenging to stick to a schedule that enables you to be productive. Your flexibility allows you to start working when you choose, run errands, do chores, clock out early, or skip work altogether some days.
Having the freedom is incredible, but it can lead to frustration and anxiety when you’re not getting enough done, especially if your results aren’t where you want them to be.
Although I’m diligent about my work hours, I’ve found setting boundaries to be an ongoing process rather than something you set and forget.
For example, I spent extra time working on this article on a Saturday morning because things weren’t moving as quickly as I wanted. Roughly two hours went by before I realized it and a gentle nudge from my wife reminded me that it was beautiful outside and time to close the laptop.
On many other occasions, I’ve experienced the other end of the spectrum, where a few quick errands mid-week turn into hours away from the computer during the day.
There’s nothing fundamentally wrong with either scenario. However, it does take diligent effort to keep yourself in check, which is different than when you’re expected to be on the clock M – F from 9 – 5 pm.
Self Doubt, Pressure, Anxiety
When you start an online business, there will be a lot of unknowns, especially early on. You can feel excited and optimistic about your progress one day, only to be wake up to lackluster results the next, which causes you to question your direction, skills, and ability to succeed.
If your business goes through a rough patch, which it inevitably will, the pressure can mount, leading to anxiety over time. Although goal setting, thoughtful planning, and diligent effort can go a long way to ward off these feelings, it’s something that I’ve found to be everpresent and requires managing rather than expecting it to go away.
You’ll constantly be raising the bar for success as a small business owner, and it’s easy to lose sight of the progress you’ve made, especially when experiencing setbacks or stagnant growth.
You can, of course, experience the same feelings as an employee, but I’ve found it’s more in your face working for yourself because success or failure falls squarely on your shoulders.
Making a Decision to Try
Now for the million-dollar question. Considering the pros and cons, should you start an online business?
I think it’s fair to say I’m biased, but if you have a genuine interest in building a business online, I’d encourage you to give it a shot. The barrier to entry is incredibly low, and you have very little to lose by trying.
I think it’s hard to know exactly whether an online business is a good fit or not without getting your hands dirty. Furthermore, I’ve found many of the reasons I’ve shared for why you shouldn’t start an online business become a factor only once you begin to achieve success. In essence, they’re good problems to have.
Many people I talk to about starting a business get stuck somewhere in between. They’re excited by the idea and love to talk about it but don’t take action. Perhaps they fear failure, don’t have the confidence, are not ready to put in the effort, or don’t know where to start.
Without minimizing those feelings or thoughts, I’d urge you to take your first step and simply get started.
Dale Carnegie put it well, “Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy.”
Where to Next
My goal is to help you build your own online business by sharing how I’ve done it myself. By doing so, I hope to fine-tune my skills, question my own assumptions, and build another successful business.
However, before jumping too far ahead, I want to take a step back and provide you with a roadmap or plan for how to tackle building your online business so you know exactly how my process works.
It’s not rocket science, but you should, at a minimum, have a high-level understanding of the steps we’ll work through together, so you’re best prepared for the actions you’ll have to take to find success.
Here’s my follow-up post: How to Start an Online Business [10-Step Roadmap to Win]
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What’s Your Motivation?
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