Interviewing leading entrepreneurs and working with inspiring people let me to do an analysis of the best online business systems that are currently making money in the real world. During those interviews I realized that there were four online business systems that reoccured over and over again.
Do you want to break free out of the rat race of working in a 9-to-5 job? I am sick of working for the dream of somebody else and if you don't fully enjoy your job, I bet you're having similar thoughts.
Now I'm engaging in Internet business for quite a time, I've spoken to million making entrepreneurs and I'm mentored by some of world's best Internet entrepreneurs inside Internet Business Mastery Academy. This network of like-minded successful business people helped me to understand some of the most fundamental principles that all profitable online business systems have in common.
In this post I'm going to outline my favorite online business systems that are used by professionals and experienced entrepreneurs all over the world. And I can tell you, they're putting huge efforts in their work and make damn good living.
There is no fail-safe system that anyone can use, but there definitely are similarities in how the different online businesses are working and why they continually provide money to those who hustle.
There is no fail-safe system to become successful. But working hard always is a good start. - Click to tweet
Non of those online business systems will be completely new for some of you, but you'll get very detailed insights about the prerequisites, benefits and drawbacks of each system.
Mindset Makes The Best Online Businesses
The most important commonality between all online business systems is the mindset. You won't find a single online business that will gift you money without putting hard work - remember that we're here for the long term and not for raping an audience and then searching for the next audience to rip off.
So please understand, that you need a vision of your perfect lifestyle. You have to align every single decision in your daily routines with this vision. Let me give you my vision as an example:
My perfect lifestyle is based upon the freedom of time. I'm not worrying about money, which allows me to only do the things I feel like doing. I'm working location independent, relying on nothing more than a MacBook, power supply and Internet connection.
I'll be able to only work on projects that I truly care about. That can be any kind of project, I want to follow my natural born curiosity. Helping other people is the main motivation for all of my work. I love the feeling when I get an email of somebody thanking me for the work I'm doing and sharing his results with me.
I'm not into business to get insanely rich. I'm doing business because I care about passionate people and I want to help them grow their own businesses. This is why I'm offering coaching services for aspiring Internet entrepreneurs and why I'm working on the Magnetic Lifestyle Business Academy.
In this vision you can see lots of different questions you can ask yourself to create your own vision.
- What makes you happy and what bores you?
- When do you feel most excited and when is the time just rushing by?
- Where do you want to work and how long do you want to work?
- With whom do you want to work and what type of persons do you want to avoid?
Take those questions as an example and tune in your mindset the right way. I'm not bullshitting you, you CAN achieve your goals by building an online business. Using these online business systems, you're increasing the likelihood of being successful. But there is no shortcut to success.
There is a lot more to be said about the right mindset. There are common fears that you'll experience even before getting started with your business. Some questions I asked myself where:
- What if I fail? Will I be broke?
- Why should anybody pay attention to me?
- I'm no expert, how will I ever earn a single buck?
I can tell you having those fears is just human and that even the big guys had them when they started out. Luckily there are proven methods to overcome those fears, that will make your journey easier and more fun.
Freelancing Online Business Systems
Freelancing is a great way to make money right from the beginning. It's especially a good choice for those of you who already have a defined skill set and know your strengths and capabilities. I'm building websites as a freelancer for my employer and for some other companies for over a year now and I can tell that it's a good way to earn money!
Freelancing isn't the way to build a profitable online business that's solely based upon passive income, it's the way to go when you're starting out and need money quick. Even Pat Flynn, the host of Smart Passive Income, said that freelancing is the way to go if you need money quickly.
Even though online business systems relying on freelancing are different depending on their fields and markets, there are commonalities that you can utilize to increase your chance of being successful. So what are the prerequisites you need to have before starting your career as a freelancer?
As a freelancer your basically selling yourself, which is your knowledge and your expertise, to clients. To successfully freelance, you need to know exactly what you're good at and how to package that service into a format that clients can understand and see value in.
It doesn't help when you're trying to sell a service that nobody pays attention to, because you're not solving any kind of problem. Try to think of ways to help your future clients. They need to see a clear benefit in hiring you. The stronger that benefit it, the more you'll be able to charge for your service.
Besides providing beneficial service, you'll need to build a relationship to your clients that's based upon trust and respect. Set up a online presence where you can introduce yourself and showcase your skills. Online business systems always require some kind of online presence, it just differs in size.
Being a freelancer, you'll maybe won't even need a blog to start out. All you need is some kind of website where you tell clients who you are, what service you provide and most importantly, what benefits clients can expect when they're hiring you.
Don't worry about blogging just because you hear it everywhere. If you want to be a freelancer, focus on introducing your person, showcasing your skills and ensuring that your prospects understand the value of your service.
Blogging helps to showcase knowledge, but you can start a blog anytime. Just focus on getting clients for now!
On your web presence you'll want to show some of your recent projects, because that's a part of establishing yourself as an expert. This is crucial for all online business systems, because people only hire experts, buy from experts or simply trust in what experts say. They want to be sure, that you've done your homework and that they can't go wrong when they pay you money.
The last prerequisite that you should take care off is marketing your services. You need to be comfortable with pitching your service to prospects via email, Skype, hangouts or whatever medium. Be confident in yourself and in the benefits you can provide to your customers.
Marketing and pitching goes hand-in-hand with mindset, so make sure that you've understood the section about mindset above.
Benefits Of Freelancing
Using online business systems that make money through freelancing has huge benefits, which I want to outline right here.
Probably the first benefit is that the barrier to market entry is quite low. You can start offering your services with barely nothing but a single site online presence or even just a profile in a social media network like LinkedIn.
A good advice is to offer your service for free in the first two or three projects to get some references and start getting your name out. When you over-deliver and exceed your client's expectations, be sure that he'll promote your services to his contact network. And that's the point where you get your foot in the door of lots of new prospects.
Though freelancing projects will put you under pressure sometimes, they will be lots of fun and great ways to grow your expertise. Since you'll most often only apply for projects and jobs that are within your field of interest, you'll never lack motivation to work and you'll enjoy working most times. Of course there will be periods where you don't feel like working at all, but lets be honest - those periods are everywhere.
Freelancing online business systems utilize the knowledge you already have. Often there's no need to learn new things before getting started. Just use what you've practiced in your everyday job routines and use this experience to make money on your own. Don't waste the knowledge you've collected in your employment, but see it as a tool to build your own dreams.
I also like about freelancing that you can apply your knowledge in real world business. Jobs are only about results, not about how much theoretical knowledge you have. You can work on projects and collect experiences that you've never dreamed of, since you have access to a broad variety of prospects - world wide. The beauty of almost every online business is the scope of reaching people all over the world.
Last but not least you're constantly growing your expertise and your network by freelancing. Your facing new problems depending on the context of the various projects and those will help you to become a true expert in your field. And every happy client of you will become a raving fan and promote your services for you.
Drawbacks Of Freelancing
A coin always has two sides and thus there are some drawbacks with freelancing online business systems.
The low barrier to market entry leads to a high competition in some crowded fields. Take copywriters for example. Thousands of people are offering their services on platforms like oDesk or elance. That's why you need very good projects as case studies for your expertise.
Having a personal online presence helps to brand yourself as expert in your field. The mind of those companies searching for freelancers is changing these days. They aren't searching for the cheapest contractor, but for those who deliver high quality work. This is your chance to shine and to turn customers into fans.
Projects can put high pressure on your shoulders. Whether it's a dead line, a task that you need to learn new stuff for to complete it or just a client who expected different results. I personally hate dealing with those things and a good way to avoid those is to get as clear as possible about the project in upfront discussions.
Discuss every detail of the project with the client and make sure that nobody has implicit assumptions. Define the exact result of your work, write it down and let both sides sign that agreement. You'll get better in understanding the true needs of your clients over time, but you need to be aware of those difficulties in the beginning.
You also might not be allowed to approach clients of your employer directly. Some companies have the employees sign agreements that prohibit approaching existing clients for their own business or new employment within a certain period of time. Don't get in legal trouble here, just pay attention to it.
Some clients of you will see you as contractor that can be replaced by other contractors. Unfortunately this is the mindset of some business people (I won't call them entrepreneurs), but it's your turn to exceed their expectations. If you can over-deliver (maybe by under-promising) you'll quickly become a business partner on the same level, because you're becoming important for their business. This isn't only true for IT specialists but for practically any kind of freelancer.
The last major drawback is, that your revenue is limited to some point. You can make damn good money with freelancing, but it's not scalable to the sky since you can't work more than 16-18 hours per and stay healthy over a long time. And you can't raise your rate per hour as you want. There is a limit where people just won't pay you anymore.
But if you stay within those limitations, you can still earn good money and build other income streams using freelancing online business systems!
Want to be coached on building a freelance business? Apply by email and I'll get back in touch with you within one day!
Affiliate Marketing Systems
Online business systems relying on affiliate marketing are very popular and are the foundation for countless Internet entrepreneurs. There are heavily discussed and they are always entitled to be a good fit for aspiring entrepreneurs.
The basic principle in affiliate marketing is to promote products that already exist. You set up special links that direct people to the product sales page and if somebody purchases a product via a link of yours, you'll get a certain percentage as commission.
Making a living with affiliate marketing is possible, even when you have no experience in Internet business at all. But there are prerequisites you need to know, otherwise you'll experience a journey with lots of pains and struggles - and wait a long time before you can see money coming in.
The most important prerequisite is choosing the right product to promote. The most common advice for beginning entrepreneurs is to only promote products or service they've used theirselves or that they have indirect experiences with. The reason behind this is that you need to answer very specific questions about the product and that you need to showcase the most important benefits. After all, promoting a crappy product will damage your reputation and you'll definitely want to avoid that!
But what makes a good affiliate product? First of all it's a product that solves needs. Here we go again, it's all about solving peoples problems - affiliate marketing is no exception. You need to find a product that you know and that has clear benefits for the paying customers.
Another criteria is the competition between other affiliate marketers. Let me give you an example: Pat Flynn from Smart Passive Income is making $30k and more per month from Bluehost affiliate sales, but does that mean Bluehost will make me rich? Hell no!
Find a product where you can position yourself as an expert. There's no way I could compete with Pat nowadays when it comes to reputation, so I won't even try it. Instead I'm focusing on other products like Internet Business Mastery Academy and Long Tail Pro. I'm crediting those two products a massive part in my success, that's why I'm sure they'll help you as well and that's why I consider myself an expert for those products.
Make sure that you're getting a fair commission. Amazons affiliate networks starts with paying 6% of commission, whereas other networks pay up to 75%. Don't sell yourself under value when choosing your product. It's business after all, so you'll want to make some money when people buy your recommended products. This is closely related to the market size. If you decide to promote products that are only interesting for a few hundred people all over the world, make sure to target exclusively those people! Be aware of your target audience and present the product exactly the way they like it.
Probably the biggest prerequisite is that you need to have a communication channel where you can reach out to your target audience. I'm using my blogs for this, but that's not the only way. I know people who only rely on social networks and are paying all their bills with it. It's important that you get noticed by the target audience of the product you're promoting, it doesn't matter at all how you do this. Make sure that the potential buyers trust in your position being an expert and present the benefits of using your promoted product. That's all you should care about when you're starting out.
Benefits Of Affiliate Marketing
There are several benefits that make online business systems using affiliate marketing so interesting for beginning entrepreneurs.
By using those online business systems, you won't need to create your own products, which can be a huge advantage especially for unexperienced entrepreneurs. You can utilize the knowledge and experience of larger companies by promoting their products. This means that the barrier to market again is really low and it's easy for you to start applying online business systems that rely on affiliate marketing.
Promoting products doesn't require special skills that you'd need to learn in weeks of study, as long as you're not promoting very complicated products that you're not familiar with. Being natural and sharing your personal experiences with that product will make it easy for your audience to build up trust in what you're saying. Let me give you an example for this:
I'm doing a 90 Days of Keywords Challenge by using Long Tail Pro. I'm sharing this challenge publicly on this blog and on my social media profiles. Since I tell people that I'm using Long Tail Pro and give them the chance to verify the keyword results themselves by creating niche websites targeting those keywords, this is a good way to build up credibility.
I truly believe in this tool, since Long Tail Pro gives you a huge advantage in search engine optimization. I credit my 400 daily visitors in 3 months to Long Tail Pro and I know that any blog or website benefits from using Long Tail Pro. This is why I'm promoting it wherever I can and this is why people start buying it.
Can you see how I'm using real life examples to showcase the benefits of my promoted product? You need to craft a story that makes people unconsciously nodd and relate to what you're writing or saying. And the only way to do this is by being yourself and talking about your personal experiences and the positive impact he promoted product had for you. If there is no such impact, you probably should consider searching for another product.
Another reason to use online business systems with affiliate marketing is that most vendors deliver content you can directly use to promote their products. They come up with pre-written blog posts, email campaigns, images and animations and of course special high converting landing pages for their products. It's their interest to support their affiliate marketers, since they make more money when you are successfully promoting their products.
Furthermore you won't need to provide any customer support for the product or service you're promoting. It's not your product, so the creator will take care of the customer support. You can easily refer all questions you can't answer yourself to the official support. Obviously you want to answer as many pre-sales questions as possible, but you don't need to care about post-sales questions if you don't want to. It's a decision how much you care about your audience - I personally would take care of post-sales questions up to a certain amount, but I'd refer anyone else to the official support.
Drawbacks Of Affiliate Marketing
Again there are some drawbacks that might limit your success in affiliate marketing if you're not aware of those right from the beginning.
One drawback is that you're depending on the vendor of the product. If the affiliate program is closed, you're banned or they cut down the commission, the worst case can be that you're earning no money at all. This is why I strongly advice you to choose independent products from vendors who are in the game for a long time. Being the first affiliate for new products is a huge advantage, but you need to be sure about the quality of the product and the long term perspective to make money with it.
Get in touch with your audience. Affiliate marketing heavily depends on how the relationship between you and your readers. It might take some time until you see the first conversions but trust me, it feels awesome to see the paychecks coming in! Over time you'll get a good feeling about how to approach your readers in a way that makes them buy your products. It's easier when you're focusing on social traffic and not on organic search traffic, since visitors coming from social media already know your person.
The biggest drawback in affiliate marketing is that you'll recieve your payments delayed. Most vendors pay your commission 60 or even 90 days after the original purchase, depending on their terms. This is because the vendors want to avoid product returns, some of them might set your commission for that sale to zero. This delay in payment is essential to know about right from starting! Don't calculate with money coming from affiliate sales instantly, but give yourself a few months of time until you see a constant flow of money coming in. Once that flow starts, there's a high likelihood that it's becoming a continuous flow of income!
Want to be coached how to do affiliate marketing without those drawbacks? Shoot me an email and I'll get in touch with you!
Online Business Systems With Coaching
Online business systems that rely on coaching can be started by nearly anybody, even if that's not the opinion of the wast majority of people out there. Some of the best online businesses and Internet entrepreneurs rely on coaching, e.g. Neil Patel, Andrew Warner or Gary Vaynerchuk.
There is almost no technical knowledge required to get started with coaching, important (as always) is your mindset, the believe in yourself and your will to hustle. It's not going to be easy, but this is probably the most promising of all online business systems.
I said coaching can be done by nearly anybody and I won't retract my words, because I think that almost any human can fulfill these prerequisites.
You need to have a skillset of a level that allows you to coach others. This might sound more intimidating as it really is. Think about your passions and your regular activities. Do you pursue those activities alone or in company with other people? Are you more experienced than those or can you become more skilled than those? Are there other people on the world that do the same activity and are just starting out with it?
Everyone grows his personal skillset constantly, just by living and going through his daily routines. Everyday we all are exercising our daily routines and get more skilled with every try.
This goes along with the mindset of seing yourself as an expert. In my book I'm digging deep into this topic and in fact, this thought is nothing more than a weak excuse for not taking action. Somebody is an expert when he or she is one single step ahead of the masses. Don't think of experts as professors that seem to know everything. An expert is a normal person like you and me who knows a bit more than others do.
Don't worry about what field your skilled in, you can even monetize it if you're a pro in World of Warcraft. The only thing to focus on is whether there are other people who have less skills than you and whether they are willing to pay your a coach that increases their skills.
As soon as you've figured out what skills you can coach, make sure others see you as an expert in that field. Create an online presence that introduces yourself and that showcases your knowledge. When somebody visits your online presence the benefits of being coached by you need to be obvious immediately. It's likely to happen that you're not the only coach in your market. Though this is a good sign that you can make money with your idea, you need to differentiate yourself from others. You want to be seen as an expert who helps people increase their skills and who enriches peoples lifes.
The third prerequisite is that you need to know ways how to approach your prospects. Engage in forums, join communities and build relationships. This is one of the keys of successful coaches, they are always able to approach people who want to be coached. By no means I'm saying that you need to sell your services to anyone, in fact that's a really bad idea!
Before you can get coaching clients, you need to prove your expertise and your knowledge. While you can use public challenges or projects as references, people like to experience coaching on their own. So you have a higher chance on converting prospects into clients when you can help them with a small problem and show them the benefits of an in-depth coaching.
Benefits Of Running A Coaching Business
Online business systems that are based on coaching do usually earn the most money and combine lots of valuable benefits.
First and foremost, the character of income generated by online coaching businesses is mostly passive! You're creating the content once and then you can sell it over and over again to your target audience. This frees up time for you to focus on other projects and spend your time just how you like instead of worrying about money coming in.
Most coaching programs require monthly fees and if your content is worth it, people are willing to stay a member and pay for your content. To raise their motivation to pay the next monthly rate you can introduce private mastermind groups. This sounds complicated but in fact you can use Facebook groups with restricted access. Anybody can set those up within 10 minutes max.
Getting your members to help themselves generates a high loyalty in your coaching program. If you're interacting regularly with that mastermind group and help your students with their problems you'll quickly get cheered up and you'll feel awesome to read all success stories shared in that mastermind group. This is something I discussed with Jeremy Frandsen and Jason van Orden, the hosts of Internet Business Mastery as well as with Chase Reeves from Fizzle.co. All three agreed that those success stories are engaging them and making them feel great and even more energized.
Another benefit is that you need almost no technical knowledge to set up your own online coaching program. I'm using OptimizePress, a WordPress theme and plugin, to build the membership site for the Magnetic Lifestyle Business Academy. It's really well documented, so that non-techies can handle it easily. Their customer support is outstanding and the training videos in the members area are step-by-step and very easy to follow. If you choose to buy OptimizePress via my affiliate link, I'll be more than happy to get you started with it, just drop me a line!
With your coaching program you're estabishing a network of like-minded people. This is very powerful as you can approach those people for new business ideas, feedback or just if you need help that they can provide. You wouldn't read this post if it wasn't for my network of entrepreneurs all around the globe. I can't overestimate the value of having a network of like-minded people!
Also coaching will allow you to grow your own knowledge. Through getting in tough with new people you're able to get into numerous projects that will differ from each other and thus bring new challenges for you. I love growing in those challenges and I believe that this ability is one of the core differences between successful entrepreneurs and wantrepreneurs.
Coaching business systems are really powerful and worth to be considered by everyone!
Drawbacks Of Running A Coaching Business
As always, I need to talk about some drawbacks that you need to know before you decide whether a coaching business is right for you or not.
Online business systems that require coaching skills usually require a strong brand that needs to be developed over time. As I stated in the key prerequisites section for this, you'll want to have an online presence where you present yourself as expert in your field. Depending on what field your engaging in, it might take some time and efforts until people start trusting in your expert status. Please don't expect to make money with a coaching business instantly. This can happen, but I won't give a guarantuee for it.
It's more likely that you're putting work in creating your expert status. This can be done while being employed and this is a reason why I started following this online business model while being employed. Creating a coaching course and building relationships with your target audience upfront can perfectly be done when you're employed. This is how you make a smooth transition. You can build up trust over time and as soon as it starts to take off, you're able to escape the rat race and stop working in a 9-to-5 job.
The aspect of being an expert is the only real drawback in building a coaching business. It requires hard work and it takes some time but in the end it can pay off.
Do you want to get the details how I'm building the Magnetic Lifestyle Business Academy? Apply for coaching via email and I'll get back to you!
So what's the lesson learned analyzing those online business systems?
There are common factors that you need to consider and there are huge chances that those business systems can radically improve your lifestyle! Let me summarize the most common denominators:
- All online business systems require hard work and patience
- All online business systems require a relationship to your target audience that is based upon trust
- All online business systems demand solving problems (so called "providing value")
- All online business systems need some kind of online presence where you brand yourself as an expert
- All online business systems can be done by almost anybody who's willing to hustle
If you've made it this far to the end of this post, please leave a comment and tell me what you think about it. Do you run a business that I described? Do you plan to start a similar business but don't quite know how to start? I'm here to help you, all you need to do is to let me know!
That's it for today, thanks for reading this extensive post! I just felt like this content needed to be said!