A recurring question every year is always what online business is best to start at this particular time. This being 2021 the question is, drumroll, what online business to start in 2021.
When asked this question last year thankfully (sorta?) I was right. If you asked me what business to start in 2020 I’d have told you something highly digital (no physical premises or goods), online first and foremost and make sure to deliver value to your customers. And guess what – being digital + online in 2020 would have been a very good shout.
The pandemic has trounced a large number of non-online businesses. Here in the UK countless household names have gone under or been scooped up by their online competitors. Almost weekly we hear of a giant historical company like the 250+ year old Debenhams being purchased for pennies and stripped for its online assets.
Everything was already moving in this direction (offline -> online, physical -> digital, entrenched -> nimble) and the pandemic sped up the process.
That was 2020. What about 2021?
What online business to start in 2021?
As with starting a business at any time there are a few general rules to abide by. We’ll cover these then I’ll tell you my specific recommendations for what online business to start in 2021.
Start with Value
Regardless of what year, month, day, solar period, declension of Venus or whatever period you need to start with value.
If you focus too much on the “next best thing” or what’s “hot” right now you’ll end up with a crap business.
Anyone selling you on the best surefire way to start an online business in 2021 is taking advantage. The only person making money is them.
Instead focus on the fundamental: Provide value to your market.
Do this and you’ll have the core of a business regardless of when you start it.
This is why the BATON system starts with Business (B) and focuses so much on nailing down what exact value you are bringing to the market.
Keep it nimble
What’s going to happen in 2021? Will the economy go up? Will the economy go down? How will peoples’ spending change? Will businesses borrow or spend?
We can make educated guesses about all of this. But pretending that we know for sure is arrogance.
Instead a more sensible approach is assume we don’t know a bloody thing and build a business based on this assumption.
We need our business to be flexible and nimble so that it can operate regardless of outside conditions.
This means not sinking tonnes of capital into it up front, don’t hire lots of staff, don’t secure an expensive rental contract, don’t go all in and purchase supply for the next few years or growth etc.
Instead assume that the economy could go any way and we have no idea which. We just know that as long as we keep costs lean and we remain ready to adapt at the drop of the hat then we’ll be in a good position moving into 2021.
Diversify with a few businesses
Equally, it’s hard to tell which markets will do well and which will not in 2021.
Some industry futures look pretty clear cut right now : for instance I wouldn’t be very excited to set up a new high street clothing chain after watching all of the UK department stores go under and get purchased by their online competitors.
But that said maybe it’s a fantastic time to get into high street retail! We’ll find out in a few years!
If, however, we assume that we don’t really know which markets will rise and which will fall then one sensible approach is to be involved in a bunch of them.
If possible get your fingers in as many pies as possible. Start multiple businesses.
Don’t have the capacity to do this alone? Work with others. Partner up and provide value to the team so that you can together build more and faster.
Diversification is another risk mitigation strategy that, based on the volatility of 2020, is well worth implementing.
Specific recommendations for what online business to start in 2021
I’ll discuss both products and services here as everyone has a preference. Not sure if you should focus on products or services? There’s a blog article here on online business ideas products or services.
Services first as it’s nice and simple!
Best service business to start 2021
We are right now coming out of the pandemic. Lots of older style businesses have simply ceased to exist. Others (in fact the majority) are in business but have had a rough year. Staff have been laid off or furloughed. Doors have been closed. Revenue has basically dropped to zero. It’s been a bit of a hibernation year for lots of older style companies.
What happens to animals after hibernation? They wake up. Hungry. Real hungry.
After a year of basically starving there are going to be a lot of hungry companies out there. They need to get back on track, they need revenue, they need growth.
They also need to make sure that they are protected from the ravages of a year like 2020. It cannot happen again as far as they are concerned. And lots of those old school companies would have noticed that other companies didn’t seem to feel the pain.
Companies who operated online and dealt with digital products and services rather than the physical seemed to do alright. In fact, more than alright. It was a boom year for industries like video games and streaming. And even physical goods sold and delivered online did well – think of Peloton or (on the cheaper end of the spectrum) arts and crafts materials like knitting supplies.
As an old school company who has spent the last year feeling the pain I’m going to want some of that security. Couple this with my hunger after being starved of growth for a year and we have a market.
Right now a great service you can offer is consultancy, specifically helping older style businesses to move and grow online. They can regain revenue, get some growth and secure themselves against any future crises like this.
If you have experience with online business (which I hope BBO.show and all our teaching has provided!) then you’re in a good position to help these companies out.
If I was me (and I am!) I’d look at what I can do to help these businesses out. How I can provide value for them during the rebuilding. In fact, this is exactly the sort of work we do with our online business consultancy B Street Digital.
Best product business to start 2021
What about products? This one is trickier because it’s harder to gauge consumer sentiment.
Last year if you had set up an arts & craft online business you’d be laughing. Uptake of hobbies was through the roof in 2020 thanks to everyone being stuck at home. But what about this year?
If lockdown eases off we may see the opposite effect in play. Last year was about indoor activities, keeping the kids busy and having something to do to just pass the time!
This year if lockdown does end we might see a swing in the opposite direction with outdoor activities. Just wanting to be out of the damn house! We’re seeing holiday bookings spike through the roof in preparation for Summer and I wouldn’t be surprised to see other rapid growth in interest in outdoor activities.
If I was launching a new online product business in 2021 I’d definitely focus it on health and fitness, weight loss and outdoor pursuits. Perhaps start selling hiking shoes, running gear and the like. Yoga saw massive boosts last year because it could be done from home (with a yoga mat and Youtube). We may see similar boosts this year for outdoor and team related activities.
Wrapping up; What online business to start in 2021
2020 was a rough year for many. Coming into 2021 we have the opportunity to build something valuable for the world. Do so and your business will do well.
If looking for specific recommendations then look at how you can help others bounce back. This could be consultancy services helping existing businesses to move online. Or it could be product sales to get people back out exercising and feeling alive and free again. These are just two ideas. The main takeaway should be to simply provide something of value to the world of 2021 and you’ll do well.