In my extensive experience, there are only 4 broad online business models, or in other words, only 4 basic ways to make money online.
The 4 business models are…
- Sell your own service (Freelance)
- Sell your own product (With or without service) (Business)
- Sell other’s products or services (Affiliate Marketing)
- Buying and reselling
While there are a multiplicity of methods/ techniques that can be used to earn money online, they will all fall under one of these 4 basic categories and while a lot of people talk exclusively about the methods, no one talks about the fundamentals of building and sustaining an online income.
That is why, in this complete guide, I’m starting from the basics.
A strong foundation of these basics business models, their advantages and disadvantage will help you understand the different individual techniques and methods much better and help you choose methods that best use your advantages.
Remember not all methods are equal, some are better that the others and in this blog post we will find out which of these business models is right… For you!
So let’s look at each category in much more detail. Let’s start with the first category, Selling Your own Service.
Sell your own service
Otherwise also known as Freelancing, selling a service is perhaps the simplest and most common way to earn money online. Freelancing allows you to take a skill that you have and perform tasks for a client in exchange for an active income.
So what is an active income?
An Active Income is any income that exchanges your time for money. For example, anyone who is employed receives an active income. He/she exchanges 8 hours of work daily for a monthly pay-check. When he/she can no longer give his/her hours to the employer, the pay-check also stops. Here are some more examples. An artist, or a musician or an auditor can sell services like storyboarding, songwriting/ composing and tax audits respectively as a service to clients and receive payment for their time and effort (service)
A matured form of freelancing is when you start your own service company, but I’ll talk more about that later. Right now I want to focus on getting you started.
How much money can I make from freelancing?
You may be wondering, “What are the average hourly rates that consultants and freelancers charge these days?” Or ” How much money can I make from Freelancing?”.
According to a recent Payoneer survey, freelancers on average charge $19/hour or ~₹1300/hr.
Here is how much some Freelancers make per hour in each domain. https://clockify.me/average-hourly-rates
Multimedia & design – $20
- Graphic Designer – $17
- Illustrator – $19
- Web designer – $21
- Multimedia production – $23
Legal field – $28
- Fraud analyzer – $27
- Professional in charge of contracts – $28
- Paralegal – $28
- Legal consulting – $29
- Tax lawyer – $30
IT & Programming – $21
- IT Support – $18
- QA – $18
- Web programmers – $21
- Database programmer – $21
- Mobile programmer – $22
- Developer – $23
- Game programmer – $24
Manufacturing & Engineering – $21
- Telecommunications – $21
- Product designer – $22
- Hardware engineer – $23
Management & Finances – $19
- Accountant – $18
- HR – $18
- Project manager – $20
- Financial analyzer – $21
- Business manager – $21
Marketing & Sales – $18
- Social Media – $16
- CRM – $18
- Sales – $18
- SEO – $19
Writing & Translation – $16
- Content Writing – $15
- Web content – $16
- Translation – $16
- Sales content – $16
- Research – $17
Customer & Administrative support -$11
- Data entry – $11
- Virtual assistant – $11
- Administrative support – $12
- Customer services – $12
The most profitable industry is the Legal field, with all 5 of its listed jobs being in the top 5 best paying freelance jobs. The freelance job that pays the most is Tax Lawyer ($30/hour).
The difference between the highest-paid surveyed industry (Legal) and the lowest paid one (Customer & Administrative support) is $17 on average.
The difference between the highest paying job (Tax Lawyer) and the lowest paying jobs (Data Entry Clerk and Virtual Assistant) is $19 – but, even the lower-paying jobs mostly offer better earnings that minimum hourly wages in the higher paying countries for traditional jobs.
Remote positions and temporary jobs offer substantial income, with the IT industry once again coming out on top (with remote back-end developers earning on average $58/h, and Application Software Developers being the highest paying temporary positions, with $48/h)
Advantages of freelancing
The advantages of freelancing are many. Here are some of the more interesting ones.
- You can work for clients from all across the world.
- You get to choose the projects that you want to work on.
- You get to polish your skills in solving real-world problems.
- You get to understand problems in your domains in much more details.
- You get to work your own hours.
There is ONE major disadvantage of freelancing and it’s that we need to constantly search for the next job.
The major disadvantage of freelancing, at least in my experience, is the need to constantly find new jobs.
If you are lucky you will be able to find a client who will bring you returning work but most of the time you will have to work on one time projects after which you will have to restart the arduous cycle of finding, interviewing for and winning a new contract. Finding a new contract is time-consuming and many new freelancers underestimate the time and effort required to find and land a new job.
The silver lining is that it becomes easier to find jobs as you become more experienced and build a network of clients. Networking is something that everyone must do, especially Freelancers.
It’s all about building a name for yourself! It helps to have a blog and become an authority in your niche. This will help you build a name for yourself and build a brand around your service!
But here’s how you can get around that disadvantage. Keep reading!
What if you don’t want to spend a lot of time searching for a new job, what do you do then? What if you’re unable to find good work consistently?
In this case, I suggest working with an outsourcing company that will be willing to find and give you work for a small fee. In the past, I’ve hired a freelancer for a small fee to help me find and land profitable jobs. So it’s not all bad news! Be creative and find ways to make your disadvantage, your advantage.
Who should freelance?
Not everyone will find success freelancing. Just like a normal job, the person who has the most valuable skills get paid the most. If you do not have a valuable skill in a lucrative domain, you will find it difficult to make a living from freelancing! It won’t be impossible, just difficult. It will be difficult enough that you will begin to think that a day job would have been the easier alternative. #TRUTH
What if I am a person with absolutely no talent? Could I still freelance?
Even if you are a person with absolutely no talent, freelancing could still be for you and in fact, this is where freelancing shines. The world is a large place and there are so many opportunities for work out there that it is impossible for you to not find something that you can work on.
Here’s the truth, even you have some particular skill sets which are valuable to certain clients and it is your prerogative to find out what value you can bring to your clients and build a freelancing business around it.
If you want to learn more about how I discovered my talents, check out my course, “Discover your talent”.
How to get started freelancing?
My favorite place to get started with freelancing is upwork.com.
Upwork.com is an online job portal that connects freelancers with clients in all domains and industries. I recommend upwork.com because of
- The quality of clients and freelancers
- Ease of use
- Freelancer friendly/ protection policies
Once you create a profile, you can start searching for open jobs and pitch to be hired for the task! Many freelancers have also found regular work on upwork.com
In summary, freelancing is the fastest way to start earning an income online. I recommend freelancing to anyone who wants to earn money online but doesn’t want to be too entrepreneurial about it.
If you’re looking for a part-time income and work to keep you busy, freelancing is a great choice for you!
That’s it for PART 1. Make sure you read PART 2 where we will discuss how you can make money online by creating your own product!