You’ve probably searched for online small business ideas because you want at least one of three things: freedom of time, money, or control. 

And if you’re reading this, you’ve probably read a bunch of listicles that throw 36,000 business ideas at you: 

Be a virtual assistant! A babysitter! An Uber driver!

You also probably closed those tabs in frustration because none of them consider the #1 one thing that will make a business succeed: You.

What you actually want to do. Your skills. Your passions.

In this post, I don’t throw 100 business ideas at you because… I don’t know you! Instead, I’ll show you a list of brainstorming questions to generate 100 business ideas that are actually realistic for you to do.

• I provide a high-level framework of what makes a profitable small business idea to get you started
• I show you two overlooked sources that you can mine ideas from, and 
• I take you step-by-step to generate over 100 viable business ideas so you can pick from a list of ideas that actually get you excited

Let’s get into it.

What Makes a Profitable Small Business Idea?

An amazing online small business idea is made of two simple, but important ingredients:

1. A group of 1,000 true fans who can support your work a.k.a. a niche
2. A profitable product or service with skills and knowledge you have that delivers a solution to solve their problems

Let’s break that down:

Ingredient #1: A Group of 1,000 True Fans

The best way to make a million dollars is to serve one million people. Kevin Kelly’s article on 1,000 true fans brings that quote into sharper focus:

If you generate enough value to get 1,000 people to pay you $100 every year, then you have a $100,000/year business.

Once you serve the needs of the initial 1,000 true fans, then you can expand outwards to groups that are adjacent to your initial group.

For example, if you help 10,000 people with $100 worth of products and services and you can gross $1,000,000/ year.

Ingredient #2: A Solution that Solves a Real Problem

The essential principle of business—of occupation in the world—is this: figure out some way in which you get paid for playing.” — Alan Watts

Too many failed entrepreneurs are marketing-driven. They create a product first, then find a problem that that product can solve and customers to sell to. They believe that if they build it, the customers will come. Or that they can just pour more money to sell a below-average product.

Successful entrepreneurs are market-driven. They let their fans tell them how they can help. They validate their product and survey their potential customers for their willingness to put down money for a product before they go out and make it.

Successful entrepreneurs let the market tell them what to make and release to excited customers who line up before the store opens. Failed entrepreneurs tell the market what they want to make and release to crickets.

The Two Overlooked Sources of Online Business Startup Ideas

Source #1: Building a Business on Your Existing Skills

When people search for “business ideas”, they overlook an important source of those ideas: Themselves.

Their obsessions, passions, and strengths.

To help you mine your existing skills for business ideas, here are some brainstorming questions:

• What am I already getting paid to do at my day job?
• What do people usually come to me for help with?
• What comes easy for me that other people struggle with?
• What is an accomplishment or interest my friends get excited about when I tell them about it?

If you want to learn more about how to apply an entrepreneurial mindset to your current skillset. I recommend Michael Gerber’s book, The E-Myth: Why Most Small Businesses Don’t Work and What to Do About It (amazon.com).

Source #2: Buy a Franchise or an Existing Business

Another source that many people overlook when looking for business ideas are proven profitable businesses. 

Investing in an already-profitable business takes away a lot of the setup stress of running an early-stage startup and figuring out a business model. All you have to do, really, is ask how much you really like the business:

• Would I like to do this for several years?
• Am I good at this?
• Is there a proven need for this?
• Would I use this product or service myself?

Bonus points if you’re already a fan of the brand, the business model generates recurring revenue, or if the business is a big player in a growing market!

With these two sources in mind, here’s a step-by-step plan you can follow to get find your small business idea:

A Step-by-Step Guide to Getting the Best Online Small Business Ideas

1. Know Your Why, Your What, and Your Passion

Prime your brain by having a vision, a driving force behind why you want to start an online business. Ask yourself…

What activities give meaning and purpose to your life?

• Is it so that your wife doesn’t have to go to work? (Admiration)
• Is it to be able to help build a school with the charity of your choice? (Contribution)
• Is it so that you can work and travel from wherever you want in the world regardless of what a boss says? (Freedom)

What does your perfect business look like?

• What does it look like?
• What does your perfect business look like?
• What is your endgame?
• How much money do you want to make per year?

You also have to know what you want and don’t want:

• Maybe you don’t want to work with a team and want to be a solopreneur
• Maybe you want a business that runs itself and only requires <5 hours a week of management
• Maybe you don’t want your name on anything because you want to sell the brand for hundreds of thousands or millions of dollars down the road

Whatever your why’s and your what’s are, clarify them and write them down. Remember, a goal not written down is merely a wish!

2. Figure Out What Unique Value You Bring to the Table

Once you know why, how, and what you’re trying to accomplish with your online business idea, the next step is to find an idea that you can do. 

To start, ask yourself:

• What do I like to do?
• What am I good at?
• What is an urgent unmet need or “pain in the ass” (PITA) that I or others I know have?
• What product or service do I gladly spend ungodly amounts of money on?
• Is there something complex in my life that I wish was simpler?
• Am I already good at something that might be a business? What comes easy to me?
• What would I do if I already had $1 billion?
• What do I obsess over on my evenings and weekends?

These questions will help you figure out your passions, strengths, and skills. The intersection of these three things is where your best business ideas lie. These are the possible niches you could create a business in. 

For example, maybe you like to go to tea shops whenever you visit a new city (passion). You also realize that your health-conscious friends have started asking you for tea recommendations beyond the usual Earl Grey and English Breakfast teas they have (strength). Maybe you could start a tea recommendation newsletter for fitness enthusiasts… And eventually, turn that into a monthly subscription box of herbal tea (profitability).

3. Stay on Top of Business Trends and New Markets

Once you know what you want and have an idea of what you can do, it’s time to look at what’s succeeding already to expand your knowledge of what’s possible.

• Read case studies and blogs (Shopify’s blog is an excellent place to start)
• Listen to podcasts that profile entrepreneurs, like NPR’s How We Built This
• Watch documentaries or movies of legendary businesses, like Netflix’s documentary about McDonald’s Ray Kroc
• Check out best-of lists, like INC.’s 5000 Fastest Growing Companies and Entrepreneur Magazine’s Top 500 Franchises
• Notice your everyday life: What restaurants and cuisines are suddenly popping up in your area? What new kind of espresso is becoming popular? What stores and new apps are your friends talking about?

Take as much time as you need for this stage. This is how you prime your brain for the final step of getting the best business ideas.

4. Generate Business Ideas and Filter Through Them

Once you’ve told your brain what you want, it’s time to let it get to work.

For the next 10 days, sit down each morning with a pen and paper. Push yourself to list out 10 business ideas. 

By the end of the 10 days, you’ll have 100 unique business ideas on your hands. 

They don’t have to be good ones. In fact, your first 90 ideas will probably suck. That’s OK. You just have to list out 10 ideas a day for 10 days.

Once those 100 ideas are in front of you, run each one through these filtering questions:

• Are there 1,000 — 3,000 reachable (preferably online) folks who can and will pay for this?
• Does the product have high margins? Better yet, can I make this once and sell it again and again, like a digital product or course?
• Does this product have the opportunity for recurring revenue, like a health supplement or email service provider?
• Does this product take advantage of status and network effects? In other words, does the product encourage customers to talk to their friends about it because it raises their status in some way?
• Are potential customers excited when I tell them about it?
• Would I use this product myself?
• Would I like to do this for several years?

If you run an idea through these filters and it passes with flying courses, congratulations! You have a product or service that people will want to put down money for. And, more importantly, you’ll have a potential business that will help you achieve independence and freedom of time, money, and control.

Finding an Online Small Business Idea Quickly

If you don’t want to go through the entire exercise and want to skip ahead, here’s what you do: think of 10 interests that you obsess over when you’re not working. It could be…

• Stock car racing
• High fidelity audio equipment
• Scrapbooking
• Photography
• Leather goods crafts
• Acting
• Coffee
• Photography bags
• Drones

..Whatever it is, start with that interest. Dig into communities that are passionate about that. Get involved in the community, whether it’s on Twitter, YouTube, Reddit, or Facebook. Remember: niches!

Finally, learn how you can solve recurring problems that people are talking about — this is the problem part.

This quick method won’t give you as many options as the step-by-step method. If you want more on where you can find business startup ideas, be sure to check out this post on finding business ideas.

You want to protect yourself and run your business in the easiest way possible. A good way to ensure this is to think carefully about which state you’ll incorporate in. In this article, I’ll share insight regarding how to incorporate your business somewhere other than your home state and why it might be beneficial for you.

In this article, we’ll cover:

• Why you would choose another state to incorporate your business
• Liability protection
• Convenience
• Restriction on type of business if it is in another state
• Pros and cons of incorporating a business in Delaware, Nevada, Wyoming and New Mexico
• Incorporating side projects or another business in different states

Why you would choose a state other than your current state to incorporate a business

It does make sense to choose your home state to incorporate a business in many cases, if not most. Although, there are a lot of reasons to incorporate other places. The two big reasons to incorporate in another state come down to liability protection and convenience.

For most business types that aren’t state-only licensed, you are able to incorporate outside the state you reside in.

Liability Protection & Convenience

The protection your business is supposed to provide your personal assets is called your corporate veil or your LLC veil. It’s one of the reasons you incorporate in the first place. You want the protection. You don’t want to lose your cars, house, or other assets.

If you’re in California and have a business entity incorporated there, about 25 to 50 percent of the time, the courts will pass right through your business entity and go straight for your personal assets.

They can even go for the assets of other people in your corporation.

This is an extremely important factor to consider, along with convenience, when decided where to implement your corporation or LLC.

States like New York and California have non-business-friendly courts and laws. However, Delaware, Nevada, Wyoming, and New Mexico have business-friendly laws and courts that will help protect yourself, protect your personal assets, and frankly protect your directors and officers as well.

Most business types can incorporate in other states, even ones that would surprise you like restaurants. The ones that can’t be incorporated across state lines usually require some sort of professional type entity from your home state, like a doctor’s office. But almost every other business that’s not professionally licensed, or some kind of a state-only licensed business, should be just fine incorporating in another state.

So, we’re talking restaurants, t-shirt businesses, manufacturers, service businesses, software–whatever–almost all of these can choose a different state than where they’re currently formed.

Here are some of the pros and cons of operating in each of the most business-friendly states.

Pros and cons of incorporating a business in Delaware

Delaware is known for being extremely business-friendly. They have a large business court infrastructure just for dealing with business cases quickly, and if you ever want to have a funded startup, VCs will almost certainly require that you set up a Delaware C-Corporation.

Around 90% of the Fortune 5000 are incorporated here! Obviously, there are some very good reasons why.

One of the biggest reasons is their massive Chancery Court system that specializes in quickly dealing with corporate legal issues. The infrastructure is there to support businesses quickly and efficiency with strong business protection and a strong business veil.

Large companies like Uber and Facebook may get sued 100 times per day. Delaware has the capacity to handle issues at a large scale, and that’s why this is the top choice for big business.

Pros of Delaware

• Use the business-friendly chancery court
• Prestige of owning a Delaware corporation
• Protection of personal assets
• Efficiency from

Not everything about Delaware is perfect for incorporating every business, however. Someone has to pay for that massive court system, so fees to incorporate here are pretty high.

You’ll also have to maintain a registered agent in Delaware (this is a service we provide for all 50 states). Then you also have to pay their “franchise tax” and file expensive annual reports.

The general complexity of filing and maintaining a Delaware business entity is a challenge as well, and most small companies don’t need this extra work, especially with some of the other states we’re going to talk about.

Cons

• Adds another level of complexity
• Have to pay franchise tax
• More expensive in general

Fun fact: you can get expedited filings of various levels in Delaware, up to a 2-hour filing for $500 extra!

Pros and cons of incorporating a business in Nevada

Nevada built an extremely friendly shareholder set of laws. As recently as a year or two or go, the veil had only been pierced in Nevada once. Nevada represents the “wild west” in terms of business law, in sharp contrast to nearby California. This libertarian approach makes it extremely pro-business with a strong business veil.

Pros

• Shareholder friendly laws
• Strong protection
• Don’t report certain things to the IRS

Of course, by incorporating in a state so lax that prostitution is legal, you may get a bit of a stigma, depending on your type of business. Let’s just say that a Nevada-addressed corporation doesn’t carry the prestige that a Delaware one does.

Because of the rush of companies wanting to incorporate in Nevada for their lax approach to business regulation and taxes, the state has made filing a bit more expensive, so that’s another downside to the state.

Cons

• Some scammy operations
• Negative stigma
• More expensive to incorporate here

Fun fact: all other states have reporting arrangements with the IRS, however the Nevada Secretary of State, department agencies, and taxation agencies do not. So that means they don’t report certain things to the IRS, which basically is a way for the IRS to figure out what you’re doing. This is huge for business privacy.

Pros and cons of incorporating a business in Wyoming

Wyoming created the LLC in the late 70s, based on a simplified corporation business entity concept that existed in Europe at the time. There was no such thing as an LLC not that long ago.

Wyoming also adopted extremely favorable laws for business, similar to Nevada. However, incorporating and managing a Wyoming business is much, much cheaper. It’s about ⅓ the price to incorporate and LLC in Wyoming, and about ⅙ to incorporate a C-Corp. Yearly management fees are much cheaper as well. This is one of the cheapest and safest states you can choose for your business.

Pros

• Very low cost of operations
• Speed to incorporate is very fast
• Strong protection

Cons

• Not super popular
• More difficult to go get a local bank account
• Certain stigma

Fun fact: a lot of people don’t know how great an opportunity it can be to incorporate in Wyoming, it’s called “Switzerland of the Rockies” and “Dick Cheney’s House of Secrets” in some circles because of the favorable business setup.

Pros and cons of incorporating a business in New Mexico

The New Mexico LLC comes with real privacy right out of the box. With an LLC in New Mexico, you don’t have to file an annual report. In fact, you don’t even have to register your name on the business, just a registered agent, which you can hire (we can help with that). There doesn’t have to be proof of any ownership by anyone!

Pros

• Doesn’t list anyone on their formation documents
• Unparalleled privacy
• No record of who you are

As usual, nothing is perfect. If you’re not listed as the owner of your business, a bank will have a hard time verifying you own it and it could be a challenge to set up your business banking with this entity.

Cons

• Banks will have a hard time verifying who you are

Fun fact: since New Mexico doesn’t require an annual report, when you file you get essentially a lifetime filing!

States to be avoided

States that tend to lean toward the left generally have less protection for businesses. More liberal states tend to be more likely to rule against a corporation and try to pierce the corporate veil.

The worst states for this of course are:

• California
• New York

In general, a more conservative state, like Texas or Tennessee, is going to be fairly pro business.

Starting a side project in another state

If you’re thinking of starting a project on the side, it could be great for you to research and look into a side entity. This gives you flexibility and the benefits we’ve discussed if you incorporate in one of the states above. You can set up one side LLC to manage all of your projects under, and when they take off you can split them off into their own, separate entity. We’ve written about this specifically here.

To Recap

• Incorporating in another state can be really great, but it depends on the type of business and specific needs.
• If you want privacy, incorporate in New Mexico.
• If you want protection, incorporate in any of the states mentioned, especially Delaware and Nevada.
• If you want to save money, incorporate in Wyoming.
• Incorporating in a different state is incredibly easy with MyCompanyWorks!

Don’t underestimate the potential of a side project (or “side hustle” as they’re commonly known): many multi-million dollar companies started as side projects. Twitter, Craigslist, Slack, Groupon all started as a side project.

Typical Side Company Setup

Most people simply work on their side project while they still have a job and then if it takes off or at least becomes “ramen profitable” (where you are able to at least feed yourself with your side hustle income) then they create a company (register an official business).  

However, there are risks with doing it this way, especially if you have many business ideas. First, since your initial work isn’t within an official incorporated business (a Corporation or LLC, an entity that is separate from yourself) you might expose yourself to liability.

For example, you might have some beta users or first customers of your side business but since you aren’t an incorporated entity yet, you may be held personally liable for the business and these customers may be able to come after your personal assets in a lawsuit (home, cars, etc.). This is the infamous “customer slipped on your driveway then sued you” nightmare scenario (or if your technical product messed up their computer or network, for example). Continue reading “How to Create a Company to Manage (and Protect) Your Side Projects”

“A person of intellect without energy added to it, is a failure.”

~Sebastien-Roch Nicolas De Chamfort

Commentary: Lots of people have great business ideas and/or are extremely intelligent. This is great – but if you do not apply your intelligence, take action on your ideas, then it is simply an intellectual exercise.

Entrepreneur.com has an Article Posted detailing one young entrepreneur’s journey from the financial sector to starting his own sports marketing firm:

I feel it’s essential that you are able to marry your work and what you love. This passion will ignite the minds of your potential clients and connections. Your business has to be a reflection of what you are already willing to pour countless hours into. Your passion and enthusiasm for your business has to connect to your why, be a part of your own experience, and is ultimately what will make you successful.

The article also includes summaries of the creation of Facebook and YouTube and encouraging words for those with an entrepreneurial spirit who haven’t yet made the jump to starting their own venture.

The concept of starting your own business can be intimidating but it’s not as difficult as many people think. Once you have come up with a Business Idea and drawn up a Business Plan you’re ready to Start Your Company! MyNewCompany.com also has a Resource Center with tons of useful information!