Building an online business that will last takes time and work. The 7 key elements I'm sharing in this post will help you get there.
When it comes to building an online business, you’ll hear people claim that you don’t have to invest money or work hard. It’s a piece of cake… you’re gonna make tons of money in 30 days with just your laptop.
But the problem is: it’s simply not true.
Now, don’t get me wrong… you can make money working from your laptop. But working from your laptop doesn’t mean you’re building a business.
The truth is that there are many online entrepreneurs out there who think they’re building a business, but in reality, they’re building themselves a job. They’re getting paid on an hourly basis (and I’m not saying there’s anything wrong with that), but what I want you to understand is that that gives you risks and problems.
So how do you build a real online business that will last for a long time?
Have the Right Mindset
If you’re one of those entrepreneurs who believes that you can create a real business without investing any time, money, or effort, you might need to shift your mindset. While it’s possible to build an online business without investing anything, the chances are pretty darn low.
The reality is that building a business is gonna take time and money. It’s the brutal truth that a lot of successful online businesses that you look up to had income from somewhere else. In other words, they didn’t start from $0. That not only allowed them to take care of their basic needs, but it also allowed them to invest in the business and let the money from the business build up.
If you’re at a point where you’re not able or willing to invest time or money to grow your business or you want everything for free, it’s going to be tough to build a successful business. This doesn’t mean it can’t be done, but it’s going to be much more difficult.
Deal with the Legal Stuff
You need to get basic legal protection in place for your business. Not being willing to do the minimum to protect your business legally is a sign of the wrong mindset. If you want your business to be here over the long term, you have to invest to get agreements in place.
Since I’m a lawyer by training, I believe the legal stuff is critical. That’s why I created my easy-to-use legal templates. If you need templates to get the legal stuff going for your business, you can find everything here.
Real businesses deal with the legal stuff. They don’t just ignore it and hope there won’t be problems.
Deal with the Finance Stuff
If you’re not being intentional about your finances from the outset, it’s going to be hard to grow your business. You should open a bank account for your business on day one, and all the finances for your business should go through that account.
Having all of your business finances in one place is important because it makes it easier to keep your books, track expenses, and monitor the cash flow. If you don’t know what’s happening with your finances regularly, you’re going to overspend and waste money. You need to ensure that the money is there when you need to spend on operations and you need to know whether you’re making a profit.
Create the Right Business Model
You need to have a business model that allows you to have positive cash flow consistently. You may not have a positive cash flow at the beginning because you have some start-up costs, but eventually, you should have revenue coming in monthly. At the bare minimum, your inflow should exceed your operating expenses.
For your business to really be mature, it’s not just that your revenue exceeds your monthly operating expenses. The revenue you bring in from sales that occur each month should exceed your monthly operating expenses. But this number doesn’t include a big infusion of cash coming from a launch, for example.
Basically, you need to have a business model that allows you to generate sales month to month, instead of one that will bring in revenue only during certain periods. Your monthly sales should cover your expenses. That’s how you should be thinking if you want to build a long-term business. It will help eliminate risks in your business.
Build a Cash Reserve
The goal of a business should be to have a six-month cash reserve. That means if no revenue came in for that period, you could survive and cover your operating expenses.
You should also build an extra cash reserve for improving your business, such as updating your website, investing in training, or hiring.
If you want to build a business that’s going to last for the long term, you need to build goodwill. It’s a term in the business world that refers to the established reputation of a business or the intangible value associated with a brand.
When you’ve built goodwill and established a good reputation, you’ll start to make sales organically. People will hear about you from a friend, and you’re gonna have referrals coming in, effectively for free.
Building goodwill is an investment that’s gonna pay off over the long term. It gets bigger and bigger like a snowball.
Build a Business That Will Work Even When You Don’t
A business that will last for a long time is scalable and one that will work even when you’re not actively working. Some call it passive income, but I’m not gonna use that term because there’s nothing passive in what you do if you’re running a real online business.
The point is that your business should be bringing in income that will allow you to take a break once in a while. You need to have a team that can get things done even without you being there 100% of the time.
Establish systems to do things in your business. This will eventually allow you to take two weeks off or a month away from your business without everything grinding to a halt.
Take the Path to Success Now
Again, the path to success in building an online business is having the right mindset and being realistic that you need to invest money, time, and effort. You’ve got to deal with the legal and finance stuff from day one and have consistent monthly revenue that exceeds operating expenses. You need to build goodwill, which is a long-term investment, and build a business that works even when you don’t.
If you want to learn more about building goodwill and a business that’s not limited to occasional cash infusions, you should sign up for my completely FREE program, BADA$$ Online Marketing University.