woman sitting at laptop laughing thanks for freedom of starting her own online subscription business

How to Start an Online Subscription Business: The Essentials Guide [2022]

If you want to:

  • Work less, but make more
  • Have a greater impact on your community
  • Escape the daily grind of the traditional service delivery model

Then read on to find out why an online subscription business is for you and how to set it up quickly and easily.                       

Have you thought to yourself:

“I’d love to have an online subscription business, so I don’t have to work so hard. I’m tired of delivering services to clients one-on-one, but I don’t even know where to start. It’s all too hard.”

We get it.

We’ve worked with so many business owners who said the same thing.

And we’ve seen first-hand how they bring it all together.

Now let’s show you how it’s done.

Why start an online subscription business

Online membership businesses are what some might call a form of passive income.

Now, let’s get real, there’s no such thing as true passive income.

All businesses take some form of time, energy, money or attention to see a return. Whether that’s in creating the product, marketing it, or simple admin.

But compared to traditional service-based business models, online memberships and subscriptions offer greater return on investment.

This means more money and more time. And who doesn’t need more time?

The main reasons to start your own online membership business are:

  • Increase your income and profit
  • Create more time and freedom for yourself and your family
  • Expand your impact by reaching more people

Key takeaway: Online subscriptions are an easier way to make money than what you’re doing now.

woman sitting on floor and leaning on couch using laptop to get online

How do online memberships work?

There are 2 secrets to why online memberships are so successful (and they both start with S):

  1. Scale
  2. Subscription

What do we mean by scale?

It means leveraging everything you do by making it available to many people at once.

Have you ever had one of those weeks where it seems like you’ve done the same thing for different people every day of the week? When you’ve answered the same question 17 different times?

That’s a hard slog. It’s draining. Enough of it and it can lead to burn out.

The secret of scale in online memberships is packaging up your expertise into content that can be accessed by multiple members simultaneously.

That’s why an online membership model is the crème-de-la-crème of membership businesses.

Thank you, Internet!

Want to see an example of how this works?

Let’s say you’re a marketing consultant.

Your usual project fee is about $3,000. It takes you around 10 hours to deliver the project over 1 month. That works out to about $300 an hour. Not bad.

Now, let’s say you create an online marketing membership.

You develop an amazing framework to teach small business owners about marketing based on your training and expertise. You set up an online membership with access to your core framework.

You’re obsessed with staying ahead of the curve with new marketing platforms and strategies, so you also offer members regular updates and live streamed lessons on new strategies.

Each member subscribes for $150 per month. You sign up 20 members in your first month. That’s $3,000 per month in recurring revenue. You’re not replacing your 1:1 income (yet), but you only spend about 2 hours per week managing your membership and adding new content.

That’s $375 an hour. Better.

The magic of the online membership model is that as your subscribers increase, your income increases but not your effort.

For example, let’s look at the difference between 20 and 100 members:

You’re now making $15,000 per month, but still only putting in 2 hours a week.

That’s $1,875 an hour. That’s impressive.

The other magic is that your revenue is recurring.

That’s where the second secret – subscription – comes in.

A key element of any successful online membership model is that your members subscribe for access to your content.

Most of us are familiar with the concept of subscription. It first began with products like insurance, charities and later publishers.

Nowadays, subscriptions permeate our lives – we subscribe for everything from TV and movies to music, to razor blades and even underwear.

What’s so sexy about subscriptions?

Two words:

Recurring. Revenue.

That means your customers agree to pay an amount on a regular, repeating basis.

It could be annually, monthly, weekly or even daily.

It’s this reliable, repeating source of income that makes online membership businesses so attractive.

Let’s go back to our marketing consultant example:

You’ve got your 5 clients a month doing $3,000 projects. You have the capacity and it’s working well enough. After all, you love marketing.

But you need new clients each month. You spend several hours each week networking, calling potential clients and preparing proposals to find and sign up new clients. It’s exhausting.

When it comes to your membership, your churn rate is low (thanks to all the amazing value your members get from your expert content and timely updates), meaning that members don’t cancel often. You track your numbers and work out a typical member subscribes for 12-months.

Why is this important?

It means you can accurately forecast your future income.

Instead of poring over financial reports and stressing about how you’re going to pay next month’s bills, you breathe a big sigh of relief.

You know exactly how much you’re going to make. It feels amazing.

You have the time and the means to invest in growth.

You also find your new subscription offering practically sells itself! You’ve automated your membership marketing, sales funnels and onboarding processes and you’re saving a tonne of time and energy, which you now get to spend doing things you love.

For the first time in years, you’re excited about your business again.

The bottom line: online membership businesses work by combining subscriptions with scale to create more time, money and freedom.

man using smartphone on chair to get online

Who can start an online subscription business?

So you’re convinced that an online membership business is awesome, but still not sure if it’s for you?

You can start an online membership business if you:

  • Know something you can teach to others. This could be a business skill (like business financial management, sales, copywriting, and son) or a personal skill, hobby or interest (like yoga, knitting or crochet).
  • Have something others want to enjoy. Online membership models work for creatives, too! This might look like artwork for an artist or music for a singer-songwriter.
  • Have a unique voice that people want to listen to. If you have a unique point of view on a topic (such as parenting, politics or if you’re an influencer – you), you can sell access to it (this could be you literally talking like on a podcast, or via a newsletter, or a private community group).

If you’ve already got a service-based business, we’re betting there’s a way you can create an online subscription model out of your skill set.

Here are some examples of subscription-based business models:

Accountant > Online financial literacy membership teaching adults how to better manage their personal finances

Photographer > Online gallery subscription giving members access to photos they can use in their business

Sustainability influencer > Online membership giving subscribers exclusive access to your newsletter with latest news and views on sustainability issues in your country.

The bottom line: almost anyone can start an online membership business.

printed sticky notes glued on board manual process system tools for online business model mapping

What do you need to start an online membership business?

Online membership models come in all shapes and sizes and use all sorts of different platforms and software. It can be totally overwhelming.

Let’s start with the basics:

All you really need to get started is a subject and the internet.

Of course, you’ll need some more tools to start signing up members and delivering the value you’ve promised. Try not to get too bogged down here.

It’s easy to get analysis-paralysis when deciding which tools to use for your online membership.

The important thing is to get the essentials and start. Remember, you can always upgrade your tools later.

For now, you just want to get started and start testing your offer in the real world.

You’ll need:

  1. A platform to host your content on the internet

This could be your own website (with a paywall, to make sure only paying members get access) or an online platform like Kajabi for digital content like courses, videos and text.

  1. A way to tell people about your amazing content

Again, you can use your own website for this, or something like LeadPages which specialises in mini-sites promoting specific offers. This can be a good option if you don’t have your own website.

  1. A way to sign up new members

You’ll need a sign up process. This could be manual, via phone or email, or automated. There are plenty of plugins for Wordpress and LeadPages that can automate this process for you.

  1. Terms and conditions for your members

This sets out what’s included and what’s not and other important terms of your membership, such as minimum subscription period, cancellations and renewals.

  1. A way to take payments from your members

Use an online payments processor like Stripe or PayPal that can handle subscriptions. If you’re using a dedicated membership platform (like Kajabi), you’ll usually find they’ve done all the work for you and your sign up process, content access and payments are all linked up, making it easy for your members and you.

  1. A way to communicate with your members

Make sure you have a way to communicate with your members (by phone, email or a members-only portal through a platform like Kajabi) about your membership.

Hot Tip:

It’s entirely possible to build an online subscription business with no (or next to no) money. There are plenty of free and cheap tools you can use to get your online membership up and running. If you’re just dipping your toe into the membership pool and not sure if it’s something you really want to run with, start with these until you’ve decided it’s worth your investment.

Shameless plug: our Online Membership Terms and Conditions are an affordable option for your T&Cs.

The bottom line: all you need to start an online membership business is content and access to the internet. You can use free and cheap tools to get your membership online and start testing to see if there’s a market for what you’re selling.

orange and white ceramic mug reads go get em near green leaf plant with brown potted get started in online business

So what are you waiting for?

Get started with your online membership today!

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