How to Create a Lifestyle Business From Scratch
If you don't want to wait until our giveaway ends, here's a detailed business plan that you can follow to start your own dropshipping business today. It takes just five steps to go from wanting passive income to earning it. Ready? Let's go!
Step 1: Identify a Trending Product
Inspiration can come from anywhere, but your own physical or digital environments are probably a good place to start. Take a walk through a trendy neighbourhood, or spend some time scrolling through your social media feeds and see what sticks out. For example, what is getting lots of engagement on Instagram or Reddit?
For my sample business, I picked LED shoes as my main product because I noticed them popping up all over the city. I first saw them being worn at Nuit Blanche, an all-night outdoor art festival, and later noticed other people wearing them at a motorcycle meetup. It seemed like they attracted a diverse audience and were popular amongst kids, men and women alike, so I dug deeper.
Google Trends is a great way to validate your entrepreneurial ideas. Simply type in a keyword, a date range, and a region, and you can see the relative popularity of a given product. You can even add other keywords and compare them to each other, to see which of several terms is the most popular. Here’s the trend line for “LED Shoes”.
Even though I might be a little late to the party, this trend is going strong and shows no sign of slowing down. Plus, with the holiday season coming up, I am confident the product will continue to sell well for months to come.
Step 2: Find a Reliable Supplier
Since this is meant to be a low-effort business that earns passive income, I don’t want to worry about storing inventory and mailing out packages. Dropshipping seems like the best option because it’s low investment and highly scalable. If you’re unfamiliar with the concept, it means that your products are sent directly from the manufacturer to the customer, without you (the seller) physically touching them. There are a variety of dropshipping platforms to choose from, but I narrowed it down to Aliexpress and Alibaba.
Alibaba is a marketplace for finding product suppliers all over the world. Typically the members are manufacturers, resellers or trading companies who trade in large order sizes. Aliexpress is similar in many ways, except that it was designed for much smaller order quantities. So instead of ordering 500 pairs of shoes, I can order just 1 pair. This increases the cost per item, but also decreases the risk of buying too much of the wrong product. Since this is a brand new business that I’m starting, I’m going to stick with Aliexpress.
LED shoes have been popular for a while now, which fortunately means it’s easy to find well-rated suppliers on Aliexpress. Some even offer free shipping in as little as two weeks! Supplier reputation / reliability and quick shipping times are both key success factors when choosing a supplier on Aliexpress. Sometimes you’ll need to select the ‘e-packet’ shipping option to find shipping times that are reasonable, but you can always pass on that added cost to the end customer.
It's worth nothing that when you start making sales, you'll have to replicate each order in Aliexpress and ask the vendor not to include an invoice in the package. While this might sound tedious, when you're ready to scale up you can easily outsource the task to a virtual assistant, or upgrade to an ecommerce platform like Shopify that offers integrated dropshipping through Oberlo.
Step 3: Order Samples & Get Photos
Once you develop a relationship with a supplier, you might become comfortable adding products to your store that you’ve never personally ordered. Initially, you’ll definitely want to order samples for yourself to experience the customer journey first-hand. I’d recommend ordering your chosen products from a few different suppliers in order to compare the product quality, shipping times and overall ordering experience. If you want more insight on how to select a supplier, check out this comprehensive guide to dropshipping.
If you need photos for your store, you may be able to use shots from your dropshipping supplier, but be sure to remove any watermarks that identify their company. You wouldn’t want your customers bypassing you and going straight to your source! Alternatively, you can sometimes find relevant photos on free stock photo sites like Pexels or Unsplash, or take your own photos.
Step 4: Start a Store
If you’re just starting out with a fresh idea, why not start a free online store to test it out? GoSpaces is the perfect platform for launching a brand new business, because it’s totally free to create your own online shop. It’s also quick and easy to build your site, even if you have no coding skills.
I used it myself to build my LED shoe store and set up a custom domain name. While I could have used a free GoSpaces URL, I opted to pay for a $13 domain name (which includes registration and hosting for a year) and signed up for the $4 / month premium plan in order to connect my domain and save on transaction fees.
If you’re not sure what to call your new business, GoSpaces offers a handy business name generator that takes your keyword(s) and finds related domain names that are available to register. This really speeds up the brainstorming process and lets you get set up with a custom URL in no time. Similarly, if you need branding, check out GoSpaces' free logo tool; it literally takes 5 clicks to create a unique logo.
Step 5: Market Your Store
Now that you've you’ve published your site, it’s time to start sharing it with friends and family. Think of this as a “beta test” where you can potentially make some sales and also get valuable feedback from those that you trust most. Here’s an example of the email that I sent to 25 close friends, coworkers and family members when I launched SparkKicks. Not only did it result in some quick and helpful feedback, but it had a ripple effect when some of the recipients shared my store with their friends too!
Once you’ve completed a soft launch, it’s time to start sharing your new store in as many places, and with as many people, as possible. You’ll want to start by sharing your store on your own social media accounts. Be sure to reply to every comment, as that increases the overall engagement score of your social post and will result in it being pushed into even more newsfeed.
Forums are another great source of qualified traffic and can be especially powerful if you already have an established presence on them. Reddit in particular has helped kickstart sales for many new e-commerce businesses, though it’s a tricky community to engage so you’ll want to tread lightly.
Once you’ve exhausted your personal network, it’s time to reach out to bloggers. You can do competitive research on similar stores (using tools like Ahrefs to see which sites are linking to them) or simply scour search engines to find popular bloggers in your niche. The end goal is to get product blogs and other sites with large, loyal audiences to review or feature your product and send traffic to your site. This will likely require you to send a few sample products, or perhaps even pay a submission fee. It’s entirely up to you and your budget whether or not this is a viable strategy for your brand. A side benefit of this type of press is that having larger sites link to your site can help you rank for certain terms (like “LED shoes”) in search engines.
A side benefit of this type of press is that having larger sites link to your site can help you rank for certain terms (like “LED shoes”) in search engines. Search engine marketing is a long-term strategy for ecommerce sites, but if done properly, it can be a free source of customers for years to come.
Depending on your profit margins, you may also want to experiment with paid marketing. Facebook’s advertising platform is quite popular among ecommerce store owners, as it allows you to target highly specific groups of people, such as 'breakdancers and DJs between the ages of 18-30 in the US who are also passionate about sneakers’. It also works with any budget; you can spend pocket change testing your ads or you can scale them and spend millions of dollars if you want to. Plus, if you want to test out Instagram ads, you can easily add that platform to your campaigns. Reddit ads and Google Product Listing Ads are also popular if you’re looking for an alternative to Facebook ads. By the way, if this sounds overwhelming, you may want to check out one of these ten free digital marketing courses as a primer. Pat Flynn's "Smart Passive Income Podcast" might also be helpful in this step of your entrepreneurial journey.
One channel that has exploded over the past couple of years is influencer marketing, on Instagram in particular. it differs from traditional Instagram advertising, because instead of paying Facebook a standard rate to send your Instagram ad to a targeted group of individuals, you’re paying the Instagram account holder directly for a sponsored post in their feed. The rates are determined by the account holder and are sometimes negotiable. If you can find a good account, you’ll often end up getting way more bang for your buck than if you use Instagram ads. That said, it’s a much more manual approach that requires you to find, evaluate and reach out to influencers.
How To Get Influencers to Advertise Your Product on Instagram
- Use a hashtag finder to find hashtags related to your main keyword
- Search Instagram for your chosen keyword.
- Click on the top posts to find the accounts that posted those photos.
- Check the engagement metrics to ensure the accounts are legitimately popular.
- Reach out to account holders and ask for their pricing.
- If it’s in your budget, send them posting instructions (photo, caption, link & time to post).
- Pay the influencer via paypal
- Be sure to only run one influencer post at a time so that you can measure the results.
Tip: Sometimes influencers will buy followers or entire accounts, which means their audience might be disengaged and unlikely to purchase your product. To safeguard yourself against this type of account, scroll through five recent photos and do a quick engagement calculation (average number of likes + comments, divided by the total number of fans). Ideally, each post should have engagement levels of at least 1-2% of their total fan count. If their ratio is lower, that’s a red flag that their followers might not be genuine and the account may not be worth your time.
While this outreach process is tedious at first, it can easily be scaled once you start finding good accounts. A “good" account is one that will earn you several times more profit than it costs to post a photo. As time goes on, it will get easier to know what to look for in an influencer, and you’ll be able to keep buying posts from your top accounts for different products. They’ll often even give you bulk discounts if you’re willing to buy five or ten posts at a time.
Since the goal is to design a lifestyle business that earns passive income (as detailed in Tim Ferriss’ book, The Four Hour Work Week) you will eventually outsource this influencer outreach and ad management to a virtual assistant. It’s important to learn the fundamentals yourself though, so you’ll know how to teach them their role when the time comes. By the way, if you want to learn more about this type of marketing, check out our comprehensive influencer guide.
On that note, you will likely want to establish your own social accounts if you decide to go the influencer route. Instagress and Schedugr.am are helpful tools that enable you to automate your Instagram account’s growth while you focus on other things. If you’re looking to automate other social media platforms, check out our recent post on “9 Free Tools that Make Automating Social Media Easy.”
So there you have it! Those are the fundamentals of building a lifestyle business from scratch that has the potential to earn passive income and be managed largely by a virtual assistant. Simply follow those five steps and you should be off to an excellent start.
Lifestyle Business Giveaway
Feeling lucky? We're giving away a trending ecommerce company! It's a lifestyle business which means you don't physically have to manage any inventory and you're free to run it from anywhere in the world. Simply enter to win below and you could win SparkKicks.com, an LED shoe store. We've already done all the work for you and...
- Identified a popular product
- Found a reliable supplier
- Took professional product photos and marketing shots
- Attracted a passionate social following on Instagram
- Built a fully-functional ecommerce store
All that's left is to market the product and cash in. Enter below for your chance to win this lifestyle business — it includes the store, the domain, a year of GoSpaces premium, the Instagram account and the book "The $100 Startup" by Chris Guillebeau. After entering, read on to find out how to build your own dropshipping company from scratch. It's the perfect 'start-up' in a box for anyone who has been looking to explore entrepreneurship.