If you’re looking to make some extra cash, you’ve probably considered trying your luck at some type of online money-making endeavour. While there is plenty of opportunity to make a few extra bucks from your home, there are a few things you need to keep in mind before you get started.
The Most Tax-efficient Way To Make Money Online
If you’re looking to make money online, you need to consider the most tax-efficient way to do so. If you’re writing a business plan and need some idea of how much return on investment you can realistically expect, there’s no better source than the IRS. In fact, you can usually find a table showing what percentage of your income various government programs will pay you back for. For example, the U.S. Government will pay you back between $0-$28,600 per year for income tax and social security payments. This is assuming you meet the qualifications for the Earned Income Tax Credit. For some, the return can be much higher. For instance, if you’re a single mother with two kids, you’ll most likely qualify for the Child Tax Credit, which can pay you back $57,400 per year (as of 2015).
When it comes to passive income, many people think about selling your old stuff on Amazon FBA or eBay. While there’s certainly a lot of money to be made in such ventures, you should consider passive income to be all the money you’re making without taking any action other than setting up an automated system to do the work for you. For example, let’s say you develop a productivity app for iOS, Android and even the web. You can register the domain name, get the app published and ready to go, and then just sit back and collect the recurring payments from all the users.
What if you have a specific skill that you can trade for money? You could start a blog and earn money off the advertising or become a freelancer and get paid for your writing. You can also create educational apps that get students to purchase study materials, take quizzes or do practice exams. You can consult with an accountant or bookkeeper to determine what your tax situation is and then choose an appropriate course of action to optimize your earnings.
Decide What To Charge
Your customers will have a significant impact on your income as a freelance writer, app developer, or any type of online entrepreneur. Before you begin making any money, you need to decide exactly what you’ll charge. The price you set will vary based on many factors, including the level of service you provide and your target audience. Consider what others in your industry are charging and set a price that’s in the middle of the pack.
As a general rule, you should look to charge more for what you provide and offer value. If you’re getting started with limited funds, it’s best to choose a cheaper plan and then add features or upgrades as you grow.
Will You Be Needing A Business Bank Account?
If you’re looking to take out a loan to fund your online business, you’ll need to apply for a business bank account. When it comes to securing a loan for your business, many banks will require you to put down a security or collateral deposit. In most cases, this will be the first thing you’ll need to do before your business can legally operate. Once you’ve filed all the necessary paperwork and met all the requirements, you can apply for a loan and get to work. Remember, however, that while you’re waiting for the business loan to be approved, you won’t be able to access your own personal bank account.
Start A Blog
Blogs are a fantastic source of income for individuals who write and/or edit content for other companies. Whether you have a talent for writing or editing or know someone who does, consider blogging as a way to make money online. What makes a blog unique is the fact that you can get paid over and over again for content that you post once or twice a week. For some, this is a significant source of income, enough to make the effort worth it even if your blog receives just a few hundred thousand views per month.
Do Your Research
When you’ve decided what type of online business you want to get into, it’s time to do your research. Start by learning as much as you can about the industry, including its competitors. When you’re starting out, it’s best to choose a niche that you can master and build a solid reputation in. If you lack the time to do your research, then choose a niche that you understand implicitly and can become an expert in.
In order to generate a profit, you must learn to think like a business owner and not a technician. The former will help you choose the right products to sell, track the sales and monitor your income; the latter will only get you so far until you run into a problem. Thinking like a business owner will also make you more receptive to suggestions from customers, which in turn will earn you more loyal patronage and trust. Remember, your customers are the lifeblood of your business. Never forget this and protect their interests above all else.
Get A Professional Licence
Depending on the type of business you’re involved in, you may need to get a professional licence or register your business with the state or local government. You should consult with an accountant or bookkeeper to determine what type of licence you need to secure and how to go about applying for one. In most cases, you’ll need to apply for a consumer licence, which is usually good for one-time purchases. However, if you plan on selling your services to the public or have employees, you’ll need to apply for a business licence. Obtaining a business licence is not as difficult as you might think. Simply follow the instructions provided by the governing body for your specific industry.
Join A Network
When you’re looking for ways to make extra money, many people think about joining a networked-marketplace like Swagbucks, OneOpper, CashApp or ClickBank. These are all marketplaces where you can buy and sell your own products, much like Amazon does. While you might make a quick buck or two from these networks, remember that you’ll be competing with hundreds of other vendors. Unless you have a specific product that’s in high demand, you’re unlikely to make much beyond what you’ve spent on your advertising. When you do make a sale, you’ll often times make less than you would have from using a direct sales approach.
Create A Plan
When you have all of the information you need and the ideal business plan in place, it’s time to put your plan into action. You cannot proceed without a plan, so take the time to write one down. Develop a schedule and map out a roadmap to reach your goals. Many businesses fail because they didn’t have a clear plan of action or lacked the discipline to follow through. Having a plan is important, but so is having the discipline to follow it.
Monitor Your Financials
Once you’ve begun making sales, it’s important to track your financials. This will help you identify your weaknesses and areas for improvement. Many individuals forget to track their finances or don’t do it correctly, which can lead them to bankruptcy. If you discover your income is greater than your expenses, keep track of what’s coming in and going out of your business. This is where a trial and error approach can help. As you learn more and more, you’ll be able to fine-tune your operation and get the most out of your efforts.
Expand Your Business
If you’re looking to make serious money online, it’s time to grow your business. As your income begins to outweigh your expenses, you’ll most likely want to choose a new niche or expand into a new area. There’s no one-size-fits-all approach when it comes to making money online. Each venture is different, and you must find a way to make it work for you.
If you’ve decided to foray into the world of freelance writing, for example, you’ll need to establish yourself as an expert in your industry. After establishing yourself as an authoritative voice in your industry, it’s time to start looking for clients. Consider joining a freelancing network, which can help connect you with potential clients. Once you’ve joined the network, create a profile, upload your resume and start receiving calls from companies that need content written. For tips on how to write a business letter that will compel a prospective client to contact you, rebranding your portfolio, and more, check out this blog post from Copyblogger.