How To Start an Online Business as a Student (3 Business Ideas For Students in 2024)

To start an online business as a student, you must: 

1. Plan out a business idea
2. Research about your product or niche
3. Identify your target market or audience
4. Develop your brand
5. Establish an online presence
6. Invest in customer service

Starting an online business as a student can be an incredibly rewarding and educational experience. Not only does it provide an opportunity to earn extra income, but it also allows you to gain valuable skills that can be beneficial in your future career. According to a survey by Junior Achievement USA, 41% of teens are interested in starting their own business. It indicates a growing trend among young entrepreneurs. With the rise of digital technology and the increasing accessibility of online tools, students today have more resources than ever to launch and grow their own businesses.

For instance, Shopify highlights that dropshipping requires minimal upfront investment, making it ideal for students. Social media management is another viable option, as Sprout Social notes that 73% of marketers find social media marketing effective, showing strong demand for skilled managers. Freelancing, especially in writing, graphic design, or web development, is also popular among students. Statista reports that 50% of US freelancers are aged 18 to 22.

This article will guide you on how to start an online business as a student with six actionable steps. It discusses each step, explaining how to execute it and providing expert insights on the importance of it before starting an online business. Additionally, this article offers some online business ideas you can start while you are in school. Lastly, we will introduce you to a business model that may be best for you, as it requires minimal upfront investment, low maintenance, and can generate a monthly passive income.

1. Plan Out a Business or Startup Idea

Planning out your small business idea is the first step and most essential element in starting a business. The best way to go about this is to identify a problem or a need. For instance, you might notice that none of the businesses in your community have ads in place, nor do any of them have an online presence. According to a local business survey conducted by the Small Business Development Center, nearly 60% of small businesses in local communities lack a robust online presence. From there, starting a local advertising agency or offering social media management services may be a good business idea for you.

Another online business idea would be to capitalize on a skill that you may have such as becoming a freelance writer focused on email marketing, starting a career in video editing, or picking up graphic designing and looking for clients online. For example, a report by Upwork highlights that freelance writers specializing in email marketing can earn between $30 to $50 per hour, making it a lucrative option for those with strong writing skills.

At the end of the day, planning out a business idea depends on how much time and effort you’re willing to put, which is why it’s advisable to select an idea or niche that you’re passionate about. Entrepreneur and author Gary Vaynerchuk emphasizes that passion is a key driver for long-term business success, as it helps sustain motivation and creativity.

Here are some questions you can ask yourself when planning out a business strategy:

You can even go the extra mile and take a business course to help you accelerate your online learning regarding launching a business. However, be sure to find an online course that will give you the best value instead of jumping the gun on the first one you see. Platforms like Coursera and Udemy offer specialized courses in entrepreneurship and small business management, often taught by industry experts and successful entrepreneurs.

2. Research About Your Product or Niche

Researching about your product or niche is essential before you even start selling or offering services. Not only does this allow you to identify your strengths, it also helps you pinpoint your weaknesses and how you can further improve and get ahead of the competition. According to the U.S. Small Business Administration, thorough market research can help new entrepreneurs reduce risks by understanding customer needs and market trends.

For instance, offering online tutoring services will inevitably appeal to people who are struggling academically. A study by the National Tutoring Association found that personalized online tutoring can improve student performance by up to two letter grades. However, you must take into consideration several factors that could negatively affect your business such as internet connectivity issues, hardware failure, and many others. For example, a survey by the Pew Research Center revealed that 15% of households with school-age children do not have high-speed internet at home, which can be a significant barrier to effective online tutoring.

There might also be issues on your students’ end such as unavoidable distractions, lack of focus, technology-related problems, and many others that could be detrimental to the success of your online tutoring business. According to a report by Common Sense Media, students in online learning environments are more likely to face distractions from social media and other digital platforms, which can impact their learning outcomes.

Here are a some steps you can take when researching about your product or niche:

• Define what you want your product or service to be: Identify what features you want to include, what pricing plans you want to set up, what variants you want to provide, and everything else that needs to be determined regarding your product.
• Gather and analyze consumer data: See if you can gather any data concerning your product such as buying patterns, consumer trends, product insights, client feedback, and many others. 
• Use gathered data for product development: Once you've identified consumer patterns and insights, use the data you've gathered to further refine your product and let it dictate product development decisions moving forward.
• Calculate costs and revenue: Determine how much you will have to spend in development, production, and marketing. Not only will this allow you to devise a pricing scheme, it will also help you estimate revenue and profit for each product sold.

More often than not, a successful business does not focus solely on highlighting its strengths, but also finds ways to overcome its weaknesses.

3. Identify Your Target Market or Audience

Identifying your target market and conducting the appropriate market research before launching your business puts you in a position to sell more efficiently because it allows you to connect with your potential customer base. According to the U.S. Small Business Administration, businesses that invest in market research are more likely to understand their customers' needs and preferences, leading to higher customer satisfaction and loyalty.

It also saves you time by helping you distinguish those who are interested in your product or service from those who are not. You wouldn’t want to sell to someone that is obviously not interested in your product, right? For example, a report by HubSpot highlights that targeted marketing campaigns can increase engagement rates by up to 50%, as they focus on individuals who are more likely to be interested in the product or service.

For instance, if you’re planning to set up an online store that dropships baby food, the most cost-effective approach would be to target young adults and between the age of 25 to 39 since it is more likely that people within that age range have babies. According to a study by the Pew Research Center, the majority of new parents in the U.S. fall within this age range, making them the ideal demographic for baby-related products.

Here are some guidelines to help you identify your target market or audience:

• Customer demographics: Collect and gather information regarding your potential customer base such as age, gender, educational attainment, and many others.
• Customer psychographics: While this segment isn't as common as other market identifiers due to it's complexity and difficulty to gather, having this kind of information will largely boost your market research since it help you understand the values, interests, and behaviors of your potential customer base.
• Customer personas: Customer personas are representations or imaginary versions of your potential customers. These are extremely helpful in understanding your potential customers and how they plan to use your product or service.

Here are other market segments to consider when identifying your target audience:

There are very few products and services that appeal to everyone in the world, which is why identifying your target market is a vital aspect of launching a business. It would be a waste of time and money to try and target absolutely everyone.

4. Build Your Brand

Your brand will serve as the face of your business, which is why it is important to spend a significant amount of time building and developing your brand identity. According to a study by the University of Loyola, color increases brand recognition by up to 80%, highlighting the importance of choosing the right colors for your brand.

Take for example the branding of McDonald’s. Whenever we see those golden arches, we instantly associate it with the fast food chain because we know that it belongs to them and no one else. Their branding is so powerful that almost anyone can easily spot and recognize their logo from a mile away. In fact, a survey by the American Marketing Association found that McDonald's golden arches are recognized by 94% of the global population, demonstrating the impact of strong brand identity.

Your branding is what will serve as a bridge between you and your customers. If your branding does not appeal to your potential clients, how do you expect them to even purchase your product or avail of your service? A report by Lucidpress indicates that consistent branding across all platforms can increase revenue by up to 23%, emphasizing the importance of a cohesive brand identity.

Here are some branding elements to keep in mind when developing your brand identity:

• Your logo: Arguably the most important aspect of your brand identity. Think of your logo as your face. Your face is what people will remember whenever they meet you for the first time. People know you by your face, not by the color of your shirt or the tone of your voice. According to a study by Siegel+Gale, a simple and clear logo can improve brand recall by 13%.
• Typography: The fonts and typefaces you use will inevitably set the tone and mood of your brand. For example, if you’re going for a more serene vibe, it would make more sense to use a font that is light and relaxed instead of a font that is heavy and bold. A research paper from MIT found that typography can influence readers' emotions and perceptions, making it a crucial element in brand identity.
• Colors: The colors you choose will serve as the “personality” of your branding. If you want your brand to be loud and expressive, you could use bright colors such as red, orange, or yellow. If you want a color that is calm and peaceful, examples of appropriate colors would be green, blue, and purple. According to Colorcom, colors can evoke specific emotional responses, which can significantly impact consumer behavior and brand perception.

These elements should all be working in harmony to create a brand identity that appeals to your customer base and resonates with them.

5. Establish an Online Presence

Establishing an online presence is extremely important because without it, how else is your online business going to exist? This typically includes creating a website with an ADHD-friendly profile, setting up accounts and/or pages on social media, and many others. According to a report by the Pew Research Center, 81% of Americans go online daily, making a strong online presence crucial for reaching potential customers.

Your website should be professional and easy to navigate, with clear information about your products or services. A study by Stanford University found that 75% of users judge a company's credibility based on its website design, emphasizing the importance of a well-designed site. Your social media accounts, on the other hand, should be active and engaging, with regular updates and interaction with your followers. According to Sprout Social, businesses that engage with their customers on social media see a 20% to 40% increase in customer spending.

Creating high-quality content, such as blog posts, videos, or infographics, can also help establish your business as an authority in your niche and attract more customers. HubSpot reports that companies that blog receive 55% more website visitors than those that do not, highlighting the value of content creation.

Your online presence will also be largely supplemented by your marketing and advertising campaigns. You can do this through the use of:

Search Engine Optimization

Search Engine Optimization, also known as SEO, is the process of growing or ranking your website in order to gain organic traffic. SEO can be accomplished through the use of a variety of methods such as:

• Keyword research: Keyword research is the process of finding out the best keywords and search terms to include in your website content in order to drive organic traffic. Typically, this can be accomplished using SEO tools such as Ahrefs Keywords Explorer, Google Keyword Planner, Moz Keyword Explorer, and many others.
• Internal linking of a related article or webpage: Internal linking is the process of creating hyperlinks from one page on your website to another webpage that’s also located on your website. This is important because it allows Google to discover other pages of your website faster once it reaches one of your webpages. It also increases the chances of users choosing to navigate within your webpage instead of leaving.

Keep in mind that even though SEO is completely free, it will take some time before you see results.

Paid ads

Paid ads are a type of advertising where you pay in order to be seen. Unlike SEO that typically takes weeks, or even months, before gaining traction, paid ads almost instantly pushes your website to the top of Google’s results pages.

Examples of popular paid ads include:

• Pay-Per-Click or PPC: PPC is a paid advertising model where the advertiser pays for each time their ad is clicked. Examples of platforms that use PPC include Amazon, Google, and YouTube.
• Social Media Marketing: Social media marketing is a form of advertising that uses social media platforms to market products and/or services. The most common social media platforms that provide advertising are Facebook, Instagram, and Twitter.
• Influencer Marketing: Influencer marketing is the process of partnering or collaborating with an influencer or celebrity and asking them to promote your product or service in exchange for free product samples or monetary payments.
• Ad Retargeting: Ad retargeting is an advertising scheme that allows you to display ads that are targeted towards users that have already seen your product or service but was not converted to a sale.
• Affiliate Marketing: An advertising method where an advertiser pays a certain amount of money for traffic that is generated by an external affiliate. These can either be websites or just ordinary internet users.

While paid ads might seem like a surefire way to quickly gain traction, you might incur a lot of ad spend and costs could quickly pile up if not managed properly.

6. Provide Excellent Customer Service

Excellent customer service is important for any business because it is the foundation of any successful transaction. It ensures that both the customer and the service provider are satisfied with the outcome of a transaction. According to a report by American Express, customers are willing to spend 17% more on a company that provides excellent customer service, highlighting its impact on revenue.

Even after a client sends their payment, a transaction never truly ends because they can become lasting relationships, built on trust, respect, and mutual understanding. A study by Bain & Company found that increasing customer retention rates by just 5% can increase profits by 25% to 95%, demonstrating the financial benefits of maintaining strong customer relationships. Additionally, a survey by Zendesk revealed that 87% of customers share good experiences with others, which can lead to valuable word-of-mouth referrals.

Here are a few reasons you should give importance to providing excellent customer service:

Customer satisfaction and loyalty

Customer satisfaction and loyalty is what will ultimately determine whether your clients will become satisfied repeat customers, or dissatisfied angry ones. Providing excellent customer service is one of the best ways to ensure that your customers are always satisfied, even when your products fail to deliver. According to a survey by HubSpot, 93% of customers are likely to make repeat purchases with companies that offer excellent customer service.

Keep in mind that having a business idea that sells does not guarantee that your clients will keep coming back. Rather, it is excellent customer service that ensures your clients will stick around and continue doing business with you. A report by the Harvard Business Review found that emotionally connected customers are more than twice as valuable as highly satisfied customers, emphasizing the importance of building strong relationships through exceptional service.

Customer satisfaction and loyalty can also lead to clients recommending your business to their family and friends, which inevitably leads to more sales and revenue. A Nielsen study found that 92% of consumers trust recommendations from friends and family over any other type of advertising, making word-of-mouth referrals a powerful tool for business growth.

Competitive advantage

Having a competitive advantage is crucial in today’s competitive business environment. Having a product or service that sells simply won’t cut it. Customer service has been a huge difference maker when it comes to running a successful business. According to a report by Deloitte, 62% of companies view customer experience delivered by their contact centers as a competitive differentiator.

For instance, if company A and company B both sell the same exact product, but only company B offers exceptional customer service, customers are more likely to conduct business with company B since they provide more value for money by taking good care of their clients. A study by PwC found that 73% of consumers point to customer experience as an important factor in their purchasing decisions, even more than price and product quality.

Positive reviews

Positive reviews are incredibly important when running an online business. According to a study by PowerReviews, over 99% of customers take the time to look at reviews before they purchase a product or avail of a service.

Reviews can be a make-or-break factor in determining the success of your business. Clients would rather buy from a store that has mixed reviews than a store that doesn’t have any reviews at all. A survey by BrightLocal found that 91% of consumers trust online reviews as much as personal recommendations, underscoring the importance of maintaining a positive online reputation.

Here are a few reasons why positive reviews are extremely crucial when it comes to starting an online business:

• Increased Credibility: Positive reviews help build credibility for your business. They act as social proof that your products or services are worth buying and that other people have had a good experience with your business.
• Boost in Sales: Positive reviews can also help boost your sales. When potential customers see positive reviews, they are more likely to make a purchase, as they feel more confident that they will be satisfied with their purchase.
• Improved Search Engine Rankings: Positive reviews can also help improve your search engine rankings. When people leave positive reviews for your business, it signals to search engines that your business is legitimate and reputable, which can result in higher rankings for relevant search terms.

3 Online Business You Can Start as a  Student

1. Social Media Management

Social media management is the process of handling the social media profile of a business or company and helping them build a community online, especially on platforms such as Facebook, Instagram, Twitter, and many others. According to Hootsuite, businesses that actively engage on social media see a 20% increase in customer satisfaction, highlighting the importance of effective social media management.

If you’re a student who uses social media regularly, the idea of becoming a social media manager might sound like a good idea. Instead of scrolling mindlessly for hours on end, being a social media manager allows you to become active on your favorite social media platform while making money at the same time. For instance, a survey by Sprout Social found that 73% of marketers believe that social media marketing has been "somewhat effective" or "very effective" for their business, indicating a strong demand for skilled social media managers.

Here are some of the tasks that are expected of a social media manager:

However, being a social media manager still has its fair share of risks and disadvantages that you need to consider before you begin your social media management journey. According to a report by Buffer, common challenges include staying updated with constantly changing algorithms, managing negative feedback, and maintaining a consistent posting schedule, which can be time-consuming and stressful. Additionally, a study by the Social Media Examiner found that 64% of social media managers struggle with measuring the ROI of their efforts, making it crucial to develop strong analytical skills.

2. Dropshipping

Dropshipping is a business model which involves shipping a product directly from a supplier or manufacturer to the customer. Unlike traditional retailing where you have to store your products yourself and ship them out for every order, dropshipping does not require you to hold any inventories. According to Shopify, dropshipping allows entrepreneurs to start a business with minimal upfront investment, making it an attractive option for students.

Instead, you act as a middleman and simply order from a manufacturer every time someone places an order. Not only does the manufacturer manage stock-keeping for you, they also handle shipping and logistics. A report by Oberlo highlights that dropshipping can save up to 30% on operational costs compared to traditional retail models.

There is absolutely no age requirement when it comes to starting an online shop. Anybody can set up their own store online, no matter how young they may be. If you’re a student that’s looking to make money by selling products online, dropshipping might be for you. For instance, 16-year-old entrepreneur Ben Pasternak started his own dropshipping business while still in high school, eventually leading to the creation of multiple successful ventures.

However, even though becoming a dropshipper might sound like a great idea for students who are looking to make extra income while studying, there are also risks and drawbacks that need to be considered before any decisions are made. According to a study by eCommerceFuel, common challenges in dropshipping include supplier reliability, product quality control, and thin profit margins, which can impact the overall success of the business.

3. Freelancing

Freelancing is a business model where you provide services for clients and get paid for every task you finish. Instead of being tied to one company and working long hours day after day, being a freelancer allows you to follow your own schedule and work anywhere. A report by Upwork indicates that freelancers can often command higher hourly rates than their traditionally employed counterparts, providing a lucrative opportunity for skilled individuals.

Freelancing has been around for quite some time now, but the appeal to be a freelancer has resonated mostly with young individuals. According to a study conducted by Statista, 50% of freelancers in the US are mostly aged 18 to 22, reflecting the growing trend among younger generations to seek flexible and independent work arrangements. For example, platforms like Fiverr and Upwork have seen a significant increase in young freelancers offering services ranging from graphic design to digital marketing.

Moreover, a survey by Freelancers Union found that 64% of freelancers choose this career path for the flexibility it offers. It allows them to balance work with other commitments such as education or personal projects. This flexibility and independence make freelancing an attractive option for young individuals looking to gain experience, build their portfolios, and earn income on their own terms.

Here are examples of the most common freelancing services being offered around the world:

Working as a freelancer might be the most popular business idea for students in this day and age. However, just like any other business or profession, freelancing has its own set of pros and cons.

Is It Worth It to Start an Online Business As a Student?

Yes, starting an online business as a student is worth it because it's a great way to jumpstart your journey to independence and financial freedom. Not only will you be able to develop skills and knowledge that will prepare you for the real world, you will also be able to earn and save money even at a young age.

However, the desire to make money and attain financial stability early should not be a hindrance to your academic performance. One could argue that a college degree is not a guarantee that you will be successful, but that doesn’t mean you should start skipping school, especially if you live in a country where a degree is required in almost every job.

You should also be careful not to be enticed by success stories of high school dropouts attaining financial stability and freedom. Their success may have been laid out by a handful of factors and circumstances that simply do not apply to everyone. What happened to them may not necessarily happen to you. Moreover, starting an online business as a student should serve as preparation for your future career, not a reason to forego college and let go of your academics altogether.

Conclusion: Why Local Lead Gen Might Be the Best Online Business To Start as a Student?

Local lead gen might be the best online business to start as a student as it helps you generate significant passive income, even at a young age. With local lead generation, all you have to do is build a website that ranks in accordance to Google’s algorithm. You can do this by applying best SEO practices that will help your website generate organic traffic.

Once your website is ranked, you can start allowing local businesses and companies to generate leads through your website. All you have to do is sit back and watch as the money comes in for each converted sale. Local lead generation also requires little to no maintenance at all. I have websites from 2014 that are still generating over $3000 for me every month, and I don’t even have to touch them. This is especially perfect for students who are looking to make money passively while studying.

If you’re a student that’s looking to generate income while still being able to focus on things that really matter, local lead generation might be the best business idea you never knew you needed.