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5 Simple Steps to Make Money Online in 2020

22 Mins read

Featured Image by Pepi Stojanovski on Unsplash

Are you interested in learning how to make money online? I think a lot of us are curious how so many entrepreneurs are able to make a great living from the comfort of their own homes these days.

Well, good news – you don’t have to wonder anymore!

In this post, we’re going to cover 5 simple steps to make money online. That’s right – rather than just tell you which sites can make you some pocket money, we’ll share a process you can use to go from online business newbie to successful business owner in just 30 days.

If you’re ready to go beyond $5 gigs on Fiverr and pennies from online surveys, then welcome! We’ve put together this definitive guide to making a full-time income online just for you. 

Before You Get Started Making Money Online


I’m sure you’re eager to get rich right away, but before you can sit back and count your money, let’s make something clear right away: making money online is HARD WORK

It’s not brain surgery, but it does take a lot of time and effort to succeed online, no matter which tactic you choose to make your mark online.

In truth, the internet has just made it easier to find opportunities and get started for less money, but it’s not all that different from traditional ways of earning some income. Now, you don’t have to pick up the phone to offer your talents to a client, get shelf space in the store to sell your product, or send a physical newsletter in the mail for paid subscribers.

The fact that it’s cheaper and easier to make things happen is a blessing, but that’s no excuse to rest on your laurels!

Make Money Online

Got it? 

Then let’s take a step-by-step look at how to make a living online this year!

Step 1: Define Your Online Money Goal


Photo by Isaac Smith on Unsplash

Are you excited? This one of a kind journey will allow you to take full control of your life and your income, and maybe even bring in money while you sleep!

With that said, you won’t know which path to take unless you’ve set an online money goal. Yours may be totally different from the next person’s. And of course, anything you set as a goal now doesn’t have to be your future goal – but everyone has to start somewhere!

Here are just a few of the common questions that people have about making money online.

How can I make money fast online?

If your goal is to just get extra money fast, then there are plenty of ways to go about it, such as selling some stuff around the house you no longer need over eBay and Facebook Marketplace, or doing quick odd jobs for people on a site like Upwork or Fiverr. 

But notice that making money fast is NOT the same thing as making a LOT of money. If that’s what you’re looking to do, then you’ll need a longer-term strategy.  

How do I make an extra $1000 a month?

Instead of focusing on making money fast, why not think about making a consistent extra income every month?

For example, if you want to make an extra $1000 a month, this represents a part-time income you can earn in all kinds of ways. You may do some freelance work on the side, build a small niche site, or sell some products on Amazon FBA. The important part is turning your passion into a reliable side income.

Can I make $100 a day online?

Ready to set your sights even higher? Making $100 a day is a full-time income – not the biggest, but enough that you could likely put all of your attention into your business instead of holding down a job on the side.

At this level, you’re no longer just dabbling in your business, so you can bring out the big guns. We’re talking becoming a full-fledged service provider, e-commerce store, or monetised blog. This is where you can use economies of scale to grow by leaps and bounds.

Set an Income Goal

Do you have an idea how much you want to make online now? Start with a realistic number first – you can always bump it up once you’ve hit your first goal. For example, try aiming for your first $100.

Of course, no matter which income target you’re looking at, nothing happens without figuring out how you’re going to make money. That’s why it’s key to go with a business model that actually works!

There are so many ways to make money online, but when you’re starting out, it’s best to pick just ONE path and grow to a sustainable level before you start diversifying into other income streams.

Let’s take a look at some different online business models and figure out which one is right for you!

Step 2: Pick Your Online Business Model


Photo by Adeolu Eletu on Unsplash

Honestly, this right here is one of the most enjoyable parts of making money online: exploring all the exciting different business models that allow you to do it!

Again, there are plenty of ways to just pick up a few bucks online here and there, but if you want a successful long-term business, there’s really just a handful of viable business models that are worth considering.

Here are a few of the most promising ways to make money online for both beginners and veteran business owners.

Sell Products with an Ecommerce Store

What’s the first thing that comes to mind when you think about making money online?

Probably selling products!

We all know Amazon is ubiquitous, but there are plenty of smaller ecommerce stores making a killing online in their own narrow niches. Think of specialty stores that sell branded clothes for teens, or commercial juicers for restaurants, or coffee beans from Colombia for caffeine lovers.

Yes, believe it or not, it’s possible to sell products online that Amazon doesn’t even carry! And in cases where it does, you can still build brand loyalty with the right approach to your ecommerce store.

How to Get Started

To build your own ecommerce store, you should start by deciding what kinds of products you want to sell. Like any business, your brand will play a big part in your success – will people trust you enough to buy from you? Will there be something about your business that helps it stand out from other sellers in the same space?

The most important decision you’ll make is whether you’ll be selling your own products or sourcing the store’s products from elsewhere. Creating your own product can be risky and more time consuming, but it allows you to offer something truly unique in the marketplace. That’s a big plus!

The alternative to making your own products is a process called “white labeling” or “wholesaling” – you take an existing product, slap your own brand on it, and sell it as your own product at a retail price. You can actually do this right on Amazon through Amazon FBA, if you choose, but your margins will be better with your own store.

If you’re all-in on building an ecommerce store, you need to decide how you want to build it. It’s possible to use a service like Shopify or BigCommerce – these are all-in-one services that host your store for a monthly or annual fee and provide a lot of built-in ecommerce features in their cloud-based platforms. They also offer free or paid apps to extend functionality. Services like Oberlo in Shopify make it possible to easily source products that you can sell right in your Shopify store. You can also build your own store using WordPress and an ecommerce plugin called WooCommerce for maximum control.

Ecommerce can be complicated to get into, but with more and more people buying online, it’s definitely worth a serious look for your online business!

Resources:

Pros:

  • You’re building a business with the potential for 24/7 income
  • You can reach an audience around the world
  • Low startup cost of under $1000
  • Easy to see what works and scale quickly

Cons:

  • Your business revenue depends entirely on your store’s uptime and performance
  • Stiff competition in competitive niches

Sell Software as a Product or Service

Are you handy with code – or know someone who is – and are hoping to turn your software idea into a reality? Then selling software may be the right option for you!

There are a ton of different categories for software:

  • Mobile apps for Apple and Android users
  • Cloud-based enterprise software for businesses
  • WordPress themes and plugins for website owners
  • Games for computers, mobile, consoles, or web browsers
  • Pre-made spreadsheets

Like with any business, you have to think about the need you’re serving, the solution you’re providing, the audience(s) you’re targeting, and the existing competition. With a little digging, you may find the perfect opening for your software in the marketplace.

Here’s something particularly cool about software as a service (or SaaS): your fixed costs are usually low. Development is the most intensive part of the process, but once the core product is ready, then every additional user in your user base is mostly profit!

Of course, software is also one of the most challenging products to develop, so it may be difficult to jump into without considerable resources and experience. Selling software is a higher-risk, higher-reward option for anyone who wants to go for it!

How to Get Started

There are different schools of thought on how to develop software as a business. One of the most common approaches is to use an “agile” approach, where you create a working prototype of the software called an MVP (minimum viable product). From there, you get it into users’ hands and iterate based on actual use cases and constructive feedback.

However you decide to approach software development, the last thing you want is to take a year or two to build a product. The world of technology moves quickly, so it’s better to validate your idea as soon as possible. If it seems to be working, go full steam ahead – otherwise, take a step back and look at other options.

Once the product is ready for sale, you can get it on app stores, third-party marketplaces like Envato, or sell it directly to customers on your own site!

Resources:

Pros:

  • High margins of 80-90% on a product with low cost of goods sold (aside from development costs)
  • Plenty of third-party marketplaces and platforms to support distribution
  • Tools and support make software development more doable than ever

Cons:

  • High barrier to entry – software development takes a lot of time and money
  • For software as a service, there’s pressure to keep adding features and improving the product or risk losing users

Build a Content Site for Affiliate Marketing

Another mainstay in the “make money online” world is blogging. As you’ve probably heard many times, a money making blog has huge upside potential – and one of the most common ways to monetise that successful blog is through affiliate marketing.

What exactly is affiliate marketing? It’s simply recommending other people’s products through the use of affiliate links and collecting a commission when someone buys.

For a content site, you’re building a site in a specific niche that answers relevant questions and provides a lot of value. As you become known as an expert in this space, users will come to trust your advice on which products or services to buy.

For example, if you’re a good cook, you might start a website all about how to cook. As part of this, you may recommend specific cookware, specialty ingredients, online cooking courses, or services like Blue Apron – anything in your niche that your readers may appreciate and that can earn you affiliate residuals.

How to Get Started

Interested in building an affiliate site for your online business? It can be slow to start, but as with any website, it will start to pick up momentum as your site’s authority grows between month 6 and month 12.

Here are a few steps to make it happen:

  1. Consider which niches you are interested in pursuing.
  2. Do some competitive analysis research using tools like Ahrefs, SEMrush, KWFinder, and UberSuggest to find opportunities that aren’t too saturated.
  3. Create a list of topics for your different posts.
  4. Find roughly 20-30 low competition, high traffic keywords that you can use for your first set of posts. To make money with an affiliate site, you should produce a balance of information posts (how to articles) and money posts (best x for y, z product review, etc.).
  5. Build your website, ideally with a versatile content management system like WordPress with a lightweight theme such as WP Astra with Elementor.
  6. Write the posts yourself or outsource them to freelance writers and publish them ASAP – it’ll take a while for Google to rank them.
  7. Once you have enough content, start promoting them on social and looking into outreach and link building opportunities.

If you want to learn more about success with an affiliate website, check out our post on how to start a blog.

Resources:

Pros:

  • You’re building an asset that can generate affiliate commissions 24/7
  • As long as you have solid organic traffic, your monetisation options are virtually limitless
  • Unlike other business models, a successful affiliate site can be sold for a substantial payday

Cons:

  • Heavily dependent on search engines like Google and affiliate programs like Amazon Associates
  • You may struggle without a lot of help from others – it’s difficult to be a one-person show for such a massive undertaking

Become a Freelance Service Provider

Some people find the most success by selling their own expertise in a specific field. As a freelancer, you can capitalise on all kinds of skills, such as:

  • Writing
  • Graphic design
  • Coding
  • SEO
  • Social media
  • UX

The most attractive thing about freelancing is the fact that you can start to make money with it quickly.

This is because the value proposition is obvious already – you’re not starting from scratch figuring out how to sell a new product or find a market for your book. As a result, you can be cash flow positive almost immediately, especially if you already have the equipment you need, such as a good computer and an internet connection.

In fact, it’s usually faster to find a client than it is to get hired for a full-time job, as it’s lower risk for a business owner to give you a try. With the right clients, freelancing is a time-tested way to make excellent money online.

How to Get Started

If you’re just starting out, you may find it easier to use a platform like UpWork that connects freelancers with businesses – but it’s also possible to build your own website or store and start marketing yourself as a freelancer.

If you don’t already have a portfolio, do some work on spec (free) for some clients or volunteer your services for a nonprofit to get some examples of what you do. You’ll have to treat like a business, which means sales and marketing. But you’re sure to find higher paying clients if you build relationships with them directly.

Whatever you do, keep in mind that you can charge by project instead of by the hour. You’ll have to figure out the pricing strategy that works best, but if you’re a freelancer, you’re in charge! How much you make depends only on how good you are at your work – and how good you are at convincing others of the value you can provide.

Resources:

Pros:

  • Very low startup cost for high potential income
  • Your income is tied to your abilities, so your money making potential can rise quickly
  • You have control: choose who you work with, what kind of work you do, and how many hours you work
  • As a business owner, you get tax deductions

Cons:

  • You only make money while you’re working
  • You have to cover self employment taxes and you don’t have benefits like with a traditional job
  • If you don’t establish long-term client relationships, finding clients can take up a lot of your time

Sell an Online Course or Ebook

Creating a course or ebook to sell can be a great way to make money online! Thanks to the amazing power of the internet, you don’t have to write the definitive book on a big subject to be successful – these days, you can just pick a very small niche topic and sell some information on that.

This is possible because of the way long tail keywords work. People are searching the web for all kinds of things. With some keyword research, you may uncover topics that have a high volume of traffic (high demand) with a limited number of courses or books for sale to answer (low supply). As long as you can create a course or book that’s better than competitors for an in-demand topic, you can position yourself for success – and long-term passive income.

In the past, an author like Stephen Covey would create a massive book like “The 7 Habits of Highly Effective People.” It’s an excellent book, but thanks to long-tail searches, you could now write on any single habit from the book and make a shorter, to-the-point guide that appeals to people who just want to improve at that specific skill. These days, there’s always room in the marketplace for your voice.

How to Get Started

Like with other business models we’ve discussed, you’ll have to decide the target audience and distribution methods for your course or book. It often helps to build up a following before you even try to sell information – this depends on your niche.

One excellent way to validate potential course or book ideas in the marketplace is with a search on third-party platforms. There are places like Udemy, Coursera, Skillshare, and Teachable that streamline the process of creating a course and reaching an audience, so a search on these platforms will help you identify great opportunities. Similarly, Amazon is a great place to sell your book – people will be able to find it and buy it just from a search!

From here, you just need to decide whether you’ll offer the product directly on your website, through a sales page; on third-party sites; or a combination of the two. One helpful tactic early on is to offer advanced review copies of your product to a handful of people in exchange for a rating and review.

Lastly, don’t forget – courses and books can be sold for cheap or even offered for free as a lead generation tool. This works well in helping you get customers or subscribers for your freelance services, affiliate site, and so on. It all depends on what will be the most beneficial for your business!

Resources:

Pros:

  • Books and courses represent an excellent passive income stream
  • Enjoy greater credibility from being a published author or instructor in your niche

Cons:

  • Creating quality informational content can take a lot of time and effort, with no guarantee of a payoff

Offer a Subscription Service

Books and courses are just one way to make money selling your knowledge! If you’re in the information business, consider offering a subscription service.

This is a great model because it involves recurring revenue. In exchange for a monthly payment, members can receive exclusive information from any combination of the following:

  • Membership site
  • Private Facebook group
  • Premium newsletter
  • Group coaching sessions
  • Patreon

The subscription business model helps you build a tight-knit community around your topic, and it provides a more sustainable base of revenue for the hard work you have to do when creating content. It’s not easy to keep up with everything from videos and blog posts to webinars and podcasts – but it’s a lot easier when you’re not producing it with the vague hope of future customers or sales down the road.

There are countless examples of subscription services. Your favorite YouTuber probably monetizes their video creation through Patreon, which allows people to pledge financial support each time they release new content. Other examples

How to Get Started

The subscription service is often best built on the back of an existing blog, website, YouTube channel, or social media page where people are already familiar with you. It helps tremendously if potential customers already know, like, and trust you before being sold on paying you an ongoing subscription in exchange for your information.

If you don’t currently have a platform elsewhere, you’ll probably find it valuable to build it first or alongside your subscription offering. One of the best reasons to do this is because you’ll be able to see firsthand what your audience is interested in, what their pain points are, what keeps them up at night – so by the time you develop a membership site or premium newsletter aimed at solving their problems, it practically sells itself!

In terms of the technical side of it, you can build an exclusive community with a private Facebook Group, or start your own site with a plugin like Thrive Themes or Memberpress. You can also use a third-party platform like Teachable to host your information and community. Of course, your priority is to validate that your subscription offering will meet the demand in your niche.

Resources:

Pros:

  • Recurring revenue is a great way to grow your business
  • Maintain ongoing connection to your audience and build a thriving community
  • Get the most mileage out of your content through automation

Cons:

  • Locks you into ongoing work producing premium content for your subscribers
  • May require your personal involvement (if access to your time is part of the membership fee)

Step 3: Build Your Online Business 


There are lots of excellent choices for business models here, from content websites to freelancing. Have you picked a model that seems like a good fit for your goals and the way you work best?

If so, great! That’s your new plan.

Pro Tip: The bane of any entrepreneur is “shiny object syndrome.” Once you’ve picked a path, give it at least six months to see how it’s going before you abandon the plan in favor of something shinier and slicker.

If you’re still having trouble deciding what you want to do, think back to Step 1 and your particular online money goal. Ultimately, you need to match up the business model you choose to your earning goals.

For example, if your goal is to make $1000 per month no matter what, you can quickly hit that number with freelancing or consulting on a valuable skill. But if your goal is passive income specifically, you’re much more likely to succeed at that outcome with affiliate marketing or information products to sell.

We can’t dive into the particulars of building every single online business model in this post, but there are a few commonalities that all of them share. Keep these in mind as you start to build your brand!

Get to Know Your Audience

If you’re selling shoes on your ecommerce store, you need to understand who you’re selling to, and what makes them want to buy.

Similarly, if you’ve built a niche site about gold coins, you should find out who tends to be interested in gold coins, what they usually want to know, and how they spend their money on this hobby.

The good news is, there are plenty of tools online to help you figure these things out, even if you don’t have a big audience yet. Use SEO tools like SEMrush to see what your competitors are writing about in the same space. Try BuzzSumo to see what gets a lot of social shares. And dig into your analytics through Google Analytics, Facebook Ads, and your own email list to see information like:

  • Your audience’s location
  • Their age
  • Their gender
  • Their interests
  • Their behavior on your site
  • And more

The better you know your audience, the easier it will be to give them what they want. And when you do that, your business soars!

Experiment and Test Ideas

How do you know if your call to action button could convert better if it were red instead of blue? Would anyone sit through a long-form sales letter on your latest product? How many different SKUs should you have in your ecommerce store?

For every question you may have in your business, there is an experiment you can do to find out the answer. Whether you’re getting ready to launch an entirely new business unit or just improve the time on page metric for your website, remember that you’re a scientist. It’s up to you to prove your hypothesis correct, or change it to a new one.

Here are a few ways to test your assumptions:

  • Try A/B tests on your website
  • Send out surveys to your existing customers
  • Try a radically different type of content and see how feedback and metrics change
  • Try a new monetisation approach and watch the sales figures

Whatever you’re wondering, there’s an answer. Imagine how much farther along you’ll be if you continually challenge your assumptions and seek out data-driven answers. Never stop testing!

Keep Working Hard

This is pretty obvious, but it’s definitely worth remembering: When you keep at it, you’ll find a way to succeed. Put another way: the only reason you’ll fail to make money online is you.

One excellent approach is to make a list of all the tasks you have to do for your business in a productivity tool like Trello, then prioritize them and get them scheduled on your calendar each and every week. That way, you’ll always know what to work on to keep moving forward. Maybe graphic design isn’t at the top of the list when you start, but priorities can shift as you start checking items off the list!

But in the end, you reap what you sow, and often, today’s efforts don’t yield results until a year or two from now. This is true whether you’re getting your degree, starting a new exercise program, or looking to make money online.

For example, in the affiliate space, it may take six to twelve months for a brand new domain to start ranking on Google. If you give up before then, you’ll never see what your site could have become!

And as a freelancer, you may start out with lower rates than you were hoping for while you’re gaining experience and building up success stories or items for your portfolio. But over time, you’ll get better at what you do and start to attract higher paying clients than you ever imagined at first.

Whatever your business is, stick with it to get to success!

Step 4: Track Your Earnings


If you’ve followed the first three steps, then you’ve set a financial goal, chosen a business model, and done the work to build your business.

Now, it’s time to get paid!

(You haven’t done all this hard work just for kicks, right?)

We want to briefly touch on how you get paid for your time and effort online, based on the type of business you’ve chosen to start. Beyond that, keep in mind that the time you spend tracking your earnings will help you make the best possible decisions for your business.

Get Paid For Ecommerce

The first thing you need to consider when you start an online store is how you’re going to collect payment on your sales. Fortunately, you’re far from the first person who’s wanted to make money online through ecommerce, so there are plenty of options to look at!

If you have your own website or work with a service like Shopify, you can sign up for a merchant account that includes both a payment gateway and a payment processor. Most people expect to pay for purchases with a credit card online, so you need to provide a way for customers to pay this way.

You should pick the gateways that serve customers in your target locations. Here are some common options:

  • PayPal
  • Stripe
  • WooCommerce Payments
  • Shopify Payments

Some of these are unique to the store you’ve built, such as WooCommerce Payments with a WooCommerce store. Just do your research to make sure that the fee structure is as advantageous as possible for where your business is going to be for the next year.

Note: If you’re working through a third party like Amazon FBA, a lot of the payment stuff is handled through them. Your earnings are disbursed on a schedule from your seller account to your bank account.

Get Paid For Affiliate Websites

If you’re looking to earn money through an affiliate site, you have two primary monetisation options:

  • Display ads. These are dynamic ads that are served to users on your site.
  • Affiliate links. These are special links that provide you with a commission when a user clicks through and buys a product.

Every display network and affiliate program handles payment in a different way, as laid out in your agreement with them. Common display networks include Google AdSense, MediaVine, Ezoic, and AdThrive.

As for affiliate programs, Amazon Associates is one of the most prominent online. If your account hits the required minimum threshold for payment, you’ll get a monthly direct deposit payment approximately 60 days after the end of the month it was for. Other popular affiliate programs can be found at ClickBank or ShareASale.

Once you have started to earn money, you can easily look in these accounts to track how much money you’re making and see what you’re getting paid from month to month. This helps you spot trends and make adjustments as needed.

Get Paid For Freelancing

Typically, you get paid for freelancing by sending an invoice with a scope of the services you’ve provided. This can be generated automatically through any number of programs, or you can create a custom fillable PDF through Adobe InDesign or Acrobat.

If you’re operating closer to a more traditional employer-employee relationship, you may be able to get your clients to pay you direct deposit through ACH. This is handy because you don’t typically owe any fees upon payment.

If direct deposit isn’t an option, many freelancers turn to digital payments, especially PayPal. However, if you have international clients, Payoneer is another good option, because it supports international payments and payment processing in hundreds of countries.

If these methods don’t work, you can always rely on credit cards or paper checks. It’s up to you to decide which payment method is best – and of course, you should expect that some clients will have their own preferred way to pay.

Get Paid For Courses, Books, and Software

Generally, the same principles discussed for ecommerce apply to selling information products like books and courses. You can decide to sell these products through third-party platforms, directly on your website, or a combination of both.

When you sell on your own website or online store, you’ll need to make sure you’ve chosen a payment processor. For software as a service, you can set it up to bill a credit card account on a monthly basis.

Step 5: Expand Your Offerings


We haven’t emphasized it too much yet, but you’ve probably thought about how complementary many of these online businesses actually are. It seems like they fit well together, doesn’t it?

Well, you’re right!

Imagine growing a strong affiliate website that attracts users through search, building an email list that you can sell a book or online course to, and then offering your consulting services to a few high-dollar clients. With separate lists based on who’s bought what, you can sell group consulting or a membership site and create some of your own products to sell in your online store – and suddenly, you have all of our recommended business models working for you!

Now, does this mean you should try to expand your offerings to all of these at once?

Not necessarily.

It depends on your niche and your audience. But what is true is the need to sell to people who already know, like, and trust you. According to Hubspot, you have a 60-70% chance of successfully selling to existing customers compared to a new prospect.

By packaging up your information and selling it in a new form, you can cross-sell or upsell to a huge audience, as well as capturing new customers who may not hire you for your services, but wouldn’t mind getting your ebook on the subject.

Expanding your offerings can provide countless new ways to make money.

Seek Out New Monetisation Opportunities

Monetisation is an art. One of the benefits to building up an audience is that you can see what’s been working the best and double down on winning strategies.

For example, if you were a successful freelance designer and noticed that all of your clients are interested in an animated logo for their branded videos, you might create a template of premade animations as a downloadable product that you could sell for an affordable price. If it ends up being successful, it’s because of what you observed about your customers by engaging with them – you wouldn’t have even known about demand for this product idea without already being active in your field.

This doesn’t mean you ALWAYS have to do new things, but try to think of monetisation opportunities for your business in three categories:

  • Affiliate, advertising, and sponsorship revenue
  • Your own products or productized services
  • High value consulting or service work

If you aren’t actively generating income from all three of these options, then you may be leaving money on the table. Many customers who buy once from you would buy again – if you had something else to sell them!

Whatever you do, always keep a close eye on your industry and the overall marketplace. Watch for trends and be ready to position your company to take advantage as things change.

Last but not least, don’t be afraid to take your earnings from one business to start a totally new company or service. This happens all the time, and it can allow you to better diversify your income streams over time.

Make Money Online Wrap-up


Photo by Eunice De Guzman on Unsplash

Making money online is simple, but it isn’t easy.

Starting a business online is a great way to leverage your talents and interests, but you’ll have a lot of work to do along the way!

If you haven’t done so already, go back to Step 1 and start tackling each of these steps in order:

  1. Define Your Online Money Goal
  2. Pick Your Online Business Model
  3. Build Your Online Business
  4. Track Your Earnings
  5. Expand Your Offerings

This process isn’t quick, but if you stick with it, you can see amazing results that transform your life.

Whatever your goal is for making money, the web gives you plenty of fantastic opportunities to turn your vision into reality. Are you ready to make money online?

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