There's a great appeal to being able to work from anywhere
in the world, and those who take advantage of this remote-working lifestyle are called "digital nomads."
The barriers to entry for international travel and starting a business are all but gone, and digital nomads are at the forefront of combining these two areas to create successful enterprises they can operate from anywhere in the world.
Whether it's running a dropshipping business from Bali, developing a successful software application from Rio De Janeiro or selling digital products from Seoul, there's vast opportunity for those with ideas, vision and an entrepreneurial spirit.
Of course, it's not all new horizons and worldwide customers — running a digital nomad business can be a big challenge. That's why we put together this guide to give you all the information you need to start a digital nomad business and enter the world of the adventuring entrepreneur.
So, what is a digital nomad business? There are lots of definitions, but we think a digital nomad business is one where you can run the business from anywhere in the world with an internet connection, sometimes even when you're on the road.
For example, a digital nomad business might be:
Where you provide a
storefront for people to
purchase from you. They
make the purchase and your
supplier sends it to them
directly.
You provide an online
application that your
customers pay a monthly
subscription to use.
Where you provide expert
advice and reviews of
products. If people click your
links to buy the products from a
retailer, you get a percentage of the order as revenue
Like an ebook, online course
or other resource that
customers pay for.
Like copywriting, web design
or graphic design.
So, what are the stats and background information on digital nomads and how these changes in business will impact the way we work? Glad you asked...
It's estimated that there will be around one billion digital nomads by 2035
Being a digital nomad has big risks and big rewards. On the risk side you have to deal with a large amount of uncertainty in terms of cash flow, projects, clients and more. On the reward side, you get to work from anywhere, succeed entirely on your own merits and have the satisfaction of creating a business that helps others be successful.
If you want to be successful as a digital nomad, here are the main skills you need to have:
The ability to sell your products or services as a digital nomad. We covered this above.
You need the ability to over-communicate to your clients and keep them happy over email, phone or chat.
Keeping clients and customers happy is vital to long-term success.
You have to be comfortable with working from the local coffeeshop, the beach, your AirBNB room or somewhere else.
Staying on top of finances and ensuring you have enough coming in crucial to your peace-of-mind.
Client needs can change fast. Marketplaces evolve. You travel. The ability to deal with changing circumstances is critical.
If you want to be a digital nomad, the most important question you need to ask is what type of business you can successfully run remotely. If you already have a professional skill like coding and development, design, writing, video production or photography, these are all perfect candidates for turning your skill into a digital nomad business and traveling the world while working.
If you don't have a skill like that, you will need to find a type of business you can run from any location. Those types of businesses are not likely to be service driven, as you would have to learn to carry out the service at the same time as starting up a business — not an easy task.
Fortunately, there are plenty of ideas for those types of businesses — selling online through marketplaces like Amazon or eBay, creating information products, affiliate marketing, blogging, social media marketing and more.
If you're stuck for inspiration, here's a list of more than 500 ideas for a digital nomad business.
There are also plenty of marketplaces where you can offer freelance services as a digital nomad — some of the most popular are UpWork, Freelancer, Fiverr, 99 Designs and Toptal. Big gig economy marketplaces like AirBnB, Uber, Lyft and Taskrabbit can also provide plenty of opportunities. Just because you are offering services through another business marketplace doesn't mean you're not a business in your own right.
Finally, becoming a digital nomad comes with its own set of challenges. You must be extremely focused and very flexible, roll with internet delays and be comfortable with living and working in an isolating environment.
You can also find additional guidance in understanding if a digital nomad business is right for you. If this blog post, we'll help you analyze if your digital nomad business iead is a good one, conduct market research and build a business plan.
Now you have all the background information for your digital nomad business, it's time to make it into a reality. That starts by choosing the right structure or "legal entity" for your business. In the US, there are four main business structures. They are:
This is the "default" business
structure and is what your
business will be if you decide
not to create a more formal
structure.
We don't
recommend this type of
business as it doesn't give
you the legal protections you need.
The most common type of
business entity. An LLC is
fast, simple and inexpensive
to setup and maintain. It
protects your personal
finances and assets and is a
great way to start your digital
nomad business.
This is a special type of LLC
entity that's only available in
certain states. It allows you
to create "mini" LLCs, each
with their own limited
liability and separate assets,
under the umbrella of a
master LLC.
This is a more complex type of
business and isn't generally
recommended for smaller
organizations.
These are the largest and most
complex types of businesses
and are far more than the
average entrepreneur or
business owner will need.
As a digital nomad, you will have some unique circumstances for how you're going to setup your business. To start with, we recommend an LLC — the combination of a low administrative overhead and liability protection are great for your peace-of-mind. Secondly, you will probably want to take advantage of our Registered Agent service - it means there will always be someone available to receive official documents, even if you're out of the country.
Next, you have more choice than most entrepreneurs on which state to from your LLC in. If you're going to be in your home state and running your LLC from there for any period, that's the best place to base it. If not, you can choose to form your LLC almost anywhere. In those cases, forming it in a business-friendly state like Delaware could be a great idea.
Finally, think about the addresses you're going to use in the U.S. for your company. Could you use a parent or relative's house? Do you want to receive documents other than official legal documents (that would go to your registered agent) there? Answering these questions ahead of time will make setting up your digital nomad business much easier.
Once you've legally created your digital nomad business you'll need to get some other things in place.
Where are you going to run your business from? The joy of being a digital nomad is you can theoretically run it from anywhere, but you'll need to make sure you have all the necessary facilities — an internet connection, somewhere to work from, access to a phone etc.
What kind of bank account will you get? How do you find the best business credit card? Figuring out how you’ll manage your finances and pay taxes as an expat are all important things to consider, so your digital nomad business stays in the green.
What equipment do you need to manage your digital nomad business apart from a laptop, computer, smartphone or tablet? What about transportation or specialized equipment? Make sure you understand exactly what you need to spend so you can write it off against business expenses. Grab extras of computer equipment such as chargers because these things are often hard to find or expensive in some international locations.
Do you need to build a website for your digital nomad business? (We're going to always go with a YES for that one.) Should you have a logo designed professionally? Will you need business cards? Think through a professional brand and pieces that make your business appear official and professional when working remotely.
What business processes are you going to use to run your business efficiently and effectively? You will need to get good financial, client management and work management processes in place. How will you track projects and increase productivity? How will you work with others from afar — what chat client will you use? Does it have a mobile app too?
Is there software that can help you manage and market your business? See our list of software at the end of this article for some great starting points.
Most states require businesses to file an Annual Report report once a year. You will also be expected to pay estimated taxes on what you plan to earn in the current business year. And, your federal, state, regional and city business licenses and permits may need to be renewed on a regular basis, typically once a year.
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