The 7 Foundational Elements Every Online Business Needs
When you’re starting an online business, it can be overwhelming to figure out what you actually need. As soon as you start researching online business ideas, your social media feed fills with ads from people trying to convince you that THEIR system, online course, or unique approach is the key to your online business success.
Soon you’re downloading all the freebies and signing up for all the webinars, and you’re feeling analysis paralysis trying to figure out which direction is right for your business.
I’ve been there before, and that’s why I decided to write this article, to reduce all of the different programs, systems, and strategies to bare elements: the essentials every online business needs, no matter what they’re selling or who their audience is.
Understanding these foundational elements can help you put the structure of your business in place in the most minimalistic way possible so you can actually start selling sooner rather than later. Later, once you’ve got all the pieces in place and your online business is launched and running, you can focus on optimizing and improving each step of your business funnel.
So what are the things every online business needs? Before we dive in, I want to let you know I’ve put together a checklist in Google Drive (with boxes you can actually check off, not a PDF!) that lists everything I’m going to cover in this article. Fill out the form below to have me send it to you!
1. A Specific Target Audience (With a Need or Problem You Can Help With)
One of the most common mistakes new online business owners make is to start with a product idea instead of starting with an audience. (I know because I’ve done this myself!) The result is often spending weeks or months developing a product, then find it impossible to sell. If you instead start with an audience, you can decide what products or services to offer based on the needs of that audience.
When you’re starting out, it can be hard to narrow down a specific niche or target audience because you feel like you want to help everybody. But as the saying goes, “If you’re speaking to everyone, you’re speaking to no one.” If you try to market your business to everyone, you’re going to struggle to make it feel like the right fit to anyone.
Say your goal is to become a nutrition coach. Now, imagine you’re a pregnant woman who wants to know what she should be eating during pregnancy, so you’ve decided to seek out a nutrition coach, and you see two ads, one for “nutrition coaching” and one for “nutrition coaching for pregnant women.” Which one would you be more likely to choose?
Not only does focusing on a specific audience make people more likely to be interested in your products or services, it also makes it easier to target them with advertising, since Facebook and other ad platforms use interests and demographics to determine who to show ads to.
How to Pick an Audience
So how do you know which audience to target? Here are some questions to help you decide:
- What is a group of people who you are qualified to help?
- What is a topic that you feel you could talk or write about for hours?
- What is a group of people who would be especially likely to need or value your content, products, or services?
- What groups of people are you already connected to through your hobbies, interests, or previous work experience?
Two things to keep in mind when it comes to picking an audience:
- You can always change your mind later. If you go through the process of launching a product or service to an audience and later decide to serve a different audience instead, you’ll still have gained valuable skills and experience along the way.
- You can always broaden your audience later. An online business expert I follow named Elizabeth Goddard has a rather eclectic business, offering a variety of products and services of interest to people in various stages of entrepreneurship. She says the reason this works for her is that while her business as a whole serves lots of types of people, each individual product or service she offers is targeted to a very specific need. So, you can always add more products and services to your business later that serve other audiences, but you do need to pick one audience to start with.
2. A Message For Your Audience
Before you can sell a product or service, you have to get people’s attention, and the way to do that is to have something to say that interests them. A clear message that directly addresses people’s needs and desires is what gets their attention, sets you apart from your competitors, and helps the right type of client or customer feel like you’re speaking to them.
Once you’ve landed on a message that resonates with your target audience because it speaks to their needs and aspirations, you can use that to create content they’ll watch, write ads they’ll click on, and write sales pages that will entice them to buy.
3. Access to Your Target Audience
This is often the hardest part of the online business journey, especially in the early stages. In order for your target audience to become aware of your message, you have to get in front of them. Some ways you can do this include:
- Paying for advertising
- Interacting with your audience in the places they spend time (online or in person)
- Speaking at online or in-person events targeted to your audience
- Partnering with people who share the same audidence as you
- Creating video or written content and learning how to promote it on platforms your audience uses
4. A Solution for Your Audience
How do you get someone who hears your message to decide to follow you on social media, subscribe to your email list, or buy your products? You give them something they need.
If you can find an audience with a need or problem, offer a solution, and then figure out how to communicate to the audience that you have the solution to their problem, you will have an online business.
My very first business, a blog about RV interior design, took off when I realized my target audience, RV owners who wanted to personalize their RV to live in full time, were looking for advice and inspiration for removing the built-in dining booth from a camper. I saw that week after week people would post in Facebook groups for RV owners asking, “Has anyone ever removed the dinette from their camper? If so can I see pictures?” I decided to publish an article showcasing dozens of pictures of RV’s with the dining booth removed. That article went viral on Pinterest, and within months I was making a full-time income from my blog.
I share that example to help you understand that solving a problem or filling a need for your audience doesn’t have to be something deep and complex. It can be as simple as an answer to a question they’re asking. If you have the answer, you’ll get their attention.
Anatomy of a Sales Funnel
For most online businesses, the journey from initial awareness to paying customer goes like this:
Free or very cheap offer > Lower priced offer > Higher priced offer
The key to getting people to move from one step of the “funnel” to the next is to solve a problem or fill a need for them at each step. That means your free offer has to solve a problem as well as your paid offers.
Many people try to build their email list by offering some type of free download, but unless people can see how the freebie will be of value to them, they won’t sign up for it. That’s why one of the essential things you need to have a successful online business is a solution for your audience.
5. A Way to Connect With Your Audience
Imagine you’ve landed a speaking gig, you’ve nailed your message, and at the end of your presentation the audience is eager to hear more from you. What do you need next? You need a way for people to stay in touch. This could be:
- A social media account or YouTube channel for them to follow
- An email list for them to subscribe to
- A Facebook group for them to join
- A website where they can contact you
- Or all of the above.
Getting multiple social media accounts and a website up and running all at once takes a lot of work and can be overwhelming, so I advise creating all of your accounts (so you can claim your username), but then picking just ONE (ideally one you know your target audience uses) to focus on building out so that when people who encounter you organically visit your page or account, they’ll be able to immediately know from your content and messaging that you are someone they want to follow.
6. An Incentive to Connect with You
I alluded to this earlier, but in order to get someone to take an action such as subscribing to your email list, you have to give them a reason to want to. The most common way to do this is to offer some kind of freebie people can get by signing up, but perhaps more effective is making your content so valuable that people feel like they want to follow you or subscribe to you so they don’t forget about you.
While a free download can lead to a short-term sale, it can also cause people to unsubscribe as soon as they get the thing they signed up for. But if people are subscribing because they value your message and content, they’ll be more likely to be part of your audience long term.
7. Something to Sell
Ultimately, you do need to be selling something in order to have an online business, most likely some mix of the following:
- Your time
- Your knowledge
- Your labor
- Access to your audience
It will become much more apparent what you have of value to offer once you have an audience, because you can just ask people what needs they have. But in the short term, it doesn’t hurt to start with a working hypothesis.
My advice is to make your first offer as simple as possible. For example, instead of developing an online course, I would suggest offering live online training covering the same topic. The sales process will be similar, and you’ll be able to test the offer and figure out what people are interested in before investing too much time in product development.
Remember that your first offer is often just that – a first attempt. Be ready to pivot based on feedback and don’t be discouraged if you need to make adjustments along the way.
The Next Step
Once you have the foundation in place, you can start measuring your results at each step to see where you need to focus on making improvements, but you have to start somewhere, and as long as you have the whole funnel from start to finish, even if it’s just a rough draft, your most enthusiastic fans will be able to follow and buy from you.
Checklist for Starting an Online Business
I’ve written out all the essential elements of an online business covered in this article in the form of an easy-to-follow Google checklist that you can download or save to your Google Drive folder. Fill out the form below to have me send it to you.