One of the hardest parts about starting an online business is figuring out what idea you're going to go with and what type of business you want to run.

Or maybe you're not even sure what the heck I'm talking about — all you wanna do is make some money so you can pay off your bills and save for that awesome holiday you've been trying to take for the past two years…

There are really two ways you can approach starting an online business:

  1. With a plan
  2. Fire, shoot, aim…

I'm sure you're smart and can figure out which one will garner the most success out of the gate. But don't worry if you fall into the second camp, this post is going to help you regroup and get on the right path so that you can start to make serious money in your online business.

The biggest question we need to answer is what type of business model should you focus on: freelancing, service or product based business using your creative skills?

Grab a pen, paper, or your favourite note-taking app, get comfy, and make your own notes as we go through the different ways that you can figure out which business model you should focus on for your online business.

Types of Side Business Models

Ways to figure out which side hustle business model you should start with. #sidehustle #freelancing101

Before we get stuck into the ways to figure out what model is going to best work for you, you need to understand the differences between each model.


This is where you take a skill and trade time for dollars with a client. Some great examples of this are freelance writing, where you might write blog posts for a client. Another example might be a freelance graphic designer, where you might design a website for a client.

Freelancing is one of the easiest and fastest online businesses to start with and it's what I started with myself.

You literally can't go wrong with starting with this business model.

Service Business

A service-based business is similar to freelancing but focused on providing an ongoing service, such as managing a company's social media accounts or marketing plan. You could also be a business consultant where you provide your expertise for a fee.

Service businesses focus more on providing ongoing solutions rather than project-based work, which is what freelancing tends to be more like. However, they are kinda interchangeable, particularly if you can get freelancing clients who will pay you a retainer each month; then you've moved over into a service-based business.

Something to think about as you work through the rest of this post.

Product Business

This is where you would sell a digital or physical product. This type of business would definitely require a website and is one of the harder businesses to get off the ground. This type of business is what you tend to move into once you have been in your online business for a few years.

I'm not saying you couldn't do this straight away because there are people who have Etsy stores, for example, who make their crafts and sell them full-time, so it's definitely doable, but it's a lot more time-intensive upfront.

It's also more difficult to get going. Initially anyway…

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Now that we've got the business models covered, let's focus on the ways you can figure out which model is going to work best for you in the beginning and/or where you might need to make some adjustments.

5 Ways to Choose Your Online Business

Build a strong foundation to rekindle the fire in your business

#1: What's the easiest for you to start with?

After reading through the business models above, which one stands out to you the most, or put another way, which one is easiest for you to get started with straight away.

In the Side Hustle 7-Day Challenge, I walk you through how you can identify your own profitable online business skill or idea and the main focus is on finding the one that is the easiest for you to start with.

Give yourself a break and take the easy route when starting an online business. You can change and adjust as you go, nothing is ever set in stone, so there is definitely no harm in starting small and going bigger as you get more confidence.

#2: What tech skills do you have?

Let's be honest. If you're starting an online business, nine times out of ten you're going to be doing something that is digital in nature. With that comes some technical requirements.

Take this into consideration when looking at the type of business model your online business is going to be in.

If you're looking at creating a digital or physical product, then you're going to need a website. If you don't know the first thing about setting up a website and don't have the money to pay someone to do this for you, then it might pay to reconsider starting with another business model instead.

Yes, you can set up sites like Etsy, Shopify, SquareSpace, and WordPress (which is what I'm using) for minimal costs, but they will require a little bit of technical knowledge to get going.

If you're prepared to learn how to make these work for you, then either of these options will work great.

#3: What will your legal business look like?

Will you incorporate or will you remain a sole proprietor?

Will you need to set up separate business accounts, what about tax?

This part of the process can seem overwhelming but it doesn't have to be…

Keep it simple.

Sole proprietor requires the least amount of setup, and you don't even need to have separate bank accounts. What you will need is a solid system for tracking income and expenses and a really good accountant that will offset your expenses to reduce your tax.

If you want to go all-in from the start, then consider incorporating or starting a limited liability company (or equivalent in your country).

You'll still need a good accountant, but you'll also need some company stuff as well, like a company secretary and potentially shareholders… check with your local tax authority about what option is best for you.

#4: How much time do you have available?

This one might seem obvious, but you'd be surprised at how many of my students inside The Empowered Lab don't have this part covered.

You can't successfully run an online business if you don't know when you've got time to do your online business, especially if you're starting it out part-time. Understand that if you've only got an hour extra each week, then it's gonna be tough to get an online business earning any meaningful amount of money initially… but it's all about what works best for you right now.

If you've got 5+ hours extra per week that you can dedicate to your online business, well that's a different story…

Sit down and work out where you've got the time and where you're prepared to make some sacrifices.

Would you rather be making some extra cash or binge-watching on Netflix?

I can tell you which one is gonna get you closer to that dream holiday… and it's not Netflix (unless you're getting paid to watch, then that's a different kettle of fish altogether!).

#5: Part-time hustle into full-time online business?

What are your long term goals? Like I said at the beginning, your online business doesn't need to be your long-term game plan, but it does need to be factored in there somewhere.

And if it's not your long-term game plan, what is? Are you using this online business to learn a new set of skills that will help you transition into your true full-time hustle?

Take some time to think about why you're doing this because when things go awry (as they inevitably do), knowing why you're doing this and what your long term goals are will help you to stay focused and on track.

Starting an online business is exciting and a lot of fun. But if you don't put a little forethought into it, it can quickly turn into one headache after another… and then you're worse off than when you weren't working all these extra hours!

Do yourself a favour and take the time to figure out your business model first so that you know what to expect and how to adjust. Flexibility is key and knowing when to pivot into another business model will ensure your online business is a complete success.

Need a place to start? Grab the FREE Kickstart Your Hustle Blueprint here.

Lise Cartwright
Lise Cartwright

Founder of Hustle & Groove and your creative business strategist. If you want to get notified of new posts just like the ones you see here, then make sure you join the awesome H & G community — Join Now!

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