How To Start An Online Business? + 12 Best Business Ideas

Khyati Hooda
By Khyati Hooda 39 Min Read

Starting an online business opens doors to a world of opportunities and challenges. But how do you get started? What resources do you need? What are the costs? 

I know it can be very overwhelming but don’t worry, I am here to help!

If you’ve been wondering how to start an online business, I will show you the essential steps and strategies you need to embark on your journey toward building a thriving online business. 

Whether you’re a tech-savvy innovator or someone looking to turn your passion into profit, understanding the intricacies of how to start an online business will be your compass on this exciting quest.

Marketing Trends In Online Business

Starting an online business and staying on top of market trends is something that many businesses fail to do. But for that, you must know the market trends of the online industry. 

So, what are the emerging market trends in online business? 

Here are some points highlighting the current market trends:

1. Mobile Dominance

The use of mobile devices in daily life has become a trend that will not go away. 

Since more and more people prefer to browse and shop on their smartphones or tablets, your online business must be optimized for mobile customers.

2. Personalization

Who doesn’t like personalized experiences, right? 

You can tailor your business to meet individual needs through data analytics and customer insights, giving customers a unique and memorable shopping journey.

3. Sustainability

People are becoming more aware of their impact on the environment. 

Sustainable business initiatives, such as eco-friendly packaging or backing ethical suppliers, can draw in clients who care about the environment and help you stand out.

4. Subscription Services

The subscription model continues to gain popularity across various industries. 

Offering subscription-based products or services can provide a steady revenue stream and enable long-term customer loyalty.

5. Artificial Intelligence (AI) Integration

Chatbots and customized suggestions are two examples of AI-powered technologies that can improve the user experience for your platform’s users. 

You can automate processes, offer immediate assistance, and deliver personalized product recommendations using AI, increasing customer satisfaction.

6. Voice Commerce

Voice assistants like Siri, Alexa, and Google Assistant have transformed how we interact with technology. 

Optimizing your business for voice search can help you attract a growing market segment and provide a seamless shopping experience.

Remember, these market trends are constantly evolving. Stay adaptable, keep an eye on emerging technologies, and always prioritize customer satisfaction to thrive in the dynamic online business world.

How To Start An Online Business?

So how will you start an online business?

Starting an online business is an exciting and potentially lucrative venture that lets you and me reach a wider audience and tap into the digital economy. With the appropriate strategy and a strong foundation, you can pursue your goals as an entrepreneur. 

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In this section, I will walk you through the key steps on how to start an online business from home and grow your digital enterprise.

Step 1: Idea Generation and Validation

The first step in how to start an online business is idea generation and validation.

In this step, you will unleash your creativity and explore various business ideas that align with your passions, skills, and market demand. It’s like going on a treasure hunt to find a brilliant concept to make your online business stand out.

Start by brainstorming ideas that excite you. 

What are your hobbies, interests, or areas of expertise? Think about how you can use these passions to create a unique online business that resonates with your target audience.

Once you have a list of potential ideas, it’s time to validate them. This is where you determine if your idea has the potential to succeed in the market.

Conduct in-depth market research to fully understand your target market, their demands, and the competition. Look for gaps or untapped opportunities that your online business can fill. 

Engage with your potential customers through surveys, interviews, or focus groups. Seek their feedback, understand their pain points, and validate if your idea solves a real problem or fulfills a genuine need. 

This interaction will not only provide valuable insights but also help you build a community of early adopters who can become your brand advocates.

Also, watch industry trends, technological advancements, and consumer behavior shifts. This will help you stay ahead, ensuring your idea remains relevant and adaptable in the ever-evolving online business landscape.

Step 2: Define Your Business Model

After you’ve found your business niche, it’s time to define your business model. 

Defining your business model is crucial in understanding how to start an online business. It’s like laying the foundation for a strong and successful business. 

In this step, your business model sets the stage for revenue streams, pricing strategies, and customer engagement.

Consider the revenue streams that align with your offerings. Will you engage in affiliate marketing, sell physical goods, offer subscription-based services and digital downloads, or sell products directly to customers?

The possibilities are of course endless and choose one that best aligns with your needs.

Next, think about your pricing strategy. 

Will you market yourself as a luxury brand and charge higher prices for your goods or services? Or will you use a lower pricing model to attract a larger customer base? 

However, finding the right balance between value and profitability is essential.

Also, explore how you’ll reach your target audience. Will you rely on organic traffic through search engine optimization (SEO) or invest in paid advertising to drive targeted traffic to your website? 

Social media platforms, content creation, and email marketing are also powerful tools to consider.

Lastly, think about how you’ll differentiate yourself from competitors. What unique selling points or competitive advantages do you bring to the table? It could be exceptional customer service, a superior user experience, or a commitment to sustainability. 

Find your niche and let it shine!

Step 3: Conduct Detailed Planning

Now that you have a clear vision of your goal, it’s time to dive into the nitty-gritty details with a comprehensive business plan

Think of this step as the roadmap for your online business, outlining every aspect of your business and guiding you toward success.

Creating a detailed business plan is like embarking on an exciting journey. It lets you map your goals, strategies, and tactics, ensuring you stay on track and make informed decisions. 

This plan will serve as your compass, helping you navigate through the ever-changing digital landscape and overcome any obstacles that may come your way.

Cover all the details in your business plan, including the information that you have gathered in Steps 1 and 2, about your objectives, target market, value proposition, and also, marketing plans, operational procedures, and projected financials. 

Start by defining your brand identity, including your business name, logo, and website design, and then choose a memorable domain name and register it. 

Define your business objectives and mission statement. What is the purpose of your online business? What problem are you solving for your target audience? 

Explaining your mission will keep you focused and help you communicate your value proposition to potential customers.

Next is your target audience. 

Explain who they are. What are their needs, preferences, and pain points? By completely defining your target market, you can efficiently design your products or services to satisfy their needs.

Identify competitors and consider their pluses and minuses. This will give you valuable insights into the market landscape and help you differentiate yourself from the competition. 

Knowing what makes you different will help you develop a unique selling proposition that will draw clients and expand your business.

Now, let’s talk about your products or services. Describe them in detail, highlighting their features, benefits, and how they solve your customers’ problems. 

Consider pricing strategies, distribution channels, and any additional services you offer to enhance the customer experience.

Financial planning is another crucial aspect of your business plan. Determine your startup costs, projected revenue, and expenses. Create a realistic budget and forecast your financial performance for the first few years. 

This will help you secure funding if needed and ensure your business remains financially sustainable.

Lastly, outline your marketing and sales strategies. 

How will you reach your target audience? Which online platforms will you utilize? 

Develop a comprehensive marketing plan, including social media, content marketing, and other relevant channels. Also, define your sales process and how you will convert leads into paying customers.

Step 4: Build Your Online Presence

Next is building your online presence.

In this step, you’ll create a digital presence that will engage your target audience and distinguish you from the competitors. 

Think of it as your virtual storefront, where potential customers can discover and engage with your brand.

First, you need a visually stunning website that showcases your products or services in the best possible light. Your website should be easy to use and showcase your business’s identity. You can build a professional and user-friendly website using WordPress or Wix

Remember, first impressions matter, so make sure your website leaves a lasting impact.

Next, it’s time to harness the power of social media. 

Platforms like Facebook, Instagram, and Twitter offer incredible opportunities to connect with your audience personally. Create engaging content, share valuable insights, and interact with your followers to generate a loyal community around your brand. 

Social media is not only a marketing tool; it’s a gateway to creating meaningful customer relationships.

In addition to social media, consider starting a blog. This is your chance to establish yourself as an expert in your industry and provide valuable information to your audience. 

Share your knowledge, insights, and tips to keep your readers returning for more. A well-written blog can position you as a trusted authority and drive traffic to your website.

Between don’t forget about search engine optimization (SEO). This is the art of optimizing your website to rank higher in search engine results. 

You can increase your visibility and attract organic traffic by incorporating relevant keywords, creating high-quality content, and building backlinks.

Step 5: Set Up E-Commerce and Payment Systems

This step is crucial for your online business to thrive and flourish. 

Setting up an e-commerce platform allows you to show your products or services to the global audience 24/7. It’s like having a virtual storefront that never closes.

First, choose a reliable ecommerce platform that suits your business needs. There are plenty of options available, such as Shopify, WooCommerce, or BigCommerce.

These platforms provide user-friendly interfaces, customizable designs, and seamless integration with payment gateways.

Next, it’s time to integrate a secure and efficient payment system. Your customers must feel confident when purchasing on your website, so offering various payment options is essential. 

Popular choices include credit/debit cards and digital wallets like PayPal or Apple Pay.

Ensure that your chosen payment system is secure and compliant with industry standards. 

Look for features like encryption, fraud detection, and PCI-DSS (Payment Card Industry Data Security Standard) compliance. These measures will protect your customers’ sensitive information and build trust in your brand.

Also, consider setting up a reliable inventory management system. 

This will help you keep track of your stock levels, automate order fulfillment, and provide real-time updates to your customers. An inventory system ensures smooth operations and avoids any delay in the customer experience.

Lastly, thoroughly test your e-commerce and payment systems before launching your online business. 

Test transactions, check for errors, and ensure everything functions properly. This step will save you from potential headaches and ensure a smooth customer journey from start to finish.

Step 6: Launch and Promote

Congratulations, you’ve made it to the most thrilling part of starting your online business. 

Yes, It’s time to launch your business. 

But hold on tight because this step is not just about hitting the “publish” button. It’s about creating a buzz, generating excitement, and getting your target audience hooked on what you have to offer.

This step will determine your online business’s initial success and visibility.

To begin, make a launch plan including the strategies and techniques you’ll use to market your business. This plan should include a timeline, budget, and a clear understanding of your target audience. 

Consider using various marketing channels, including social media, content marketing, and paid advertising, to get in touch with your potential customers.

Pre-launch marketing can be an efficient approach to creating hype and anticipation for your debut. This can involve offering exclusive discounts or early access to your products or services to those who sign up or subscribe before the official launch date. 

This approach generates attention and aids in developing potential buyers who are already interested in what you offer.

Once your online business is live, it’s time to promote it to your target audience actively. 

Use social media channels to interact with your audience, provide informative content, and launch specific advertising campaigns. Consider collaborating with influencers or industry experts who can help spread the word about your business to their followers.

Step 7: Customer Service and Feedback

Customer Service and Feedback is a crucial aspect of starting an online business. 

Here, you need to focus on offering excellent customer service to ensure customer satisfaction and build a loyal customer base. 

Promptly responding to customer inquiries, addressing their concerns, and resolving any issues they may have is essential. This can be done through various channels such as email, live chat, or phone support. 

Moreover, actively seeking feedback from your customers is vital for continuous improvement. 

Encourage customers to share their thoughts, suggestions, and experiences with your products or services. You can improve your offers, find areas for improvement, and ultimately give customers a better experience with the help of this information. 

By prioritizing customer service and feedback, you can establish a positive reputation, foster customer loyalty, and drive the success of your online business.

Step 8: Analyze and Adapt

When starting an online business, it is crucial to analyze and adapt your strategies continuously. 

This involves closely monitoring the performance of your business and making necessary adjustments to ensure its success. 

By analyzing various metrics such as website traffic, conversion rates, customer feedback, and sales data, you can get valuable insights into the strengths and weaknesses of your business. This information will help you identify areas that require improvement and make decisions to optimize your operations. 

You can regularly analyze your business’s performance using tools like Google Analytics or e-commerce platform analytics. 

Also, as said in the beginning, staying updated with market trends and competitors’ activities, will enable you to adapt your business model and offerings accordingly. 

Flexibility and willingness to make changes based on the analysis will allow your online business to stay competitive and thrive in the ever-evolving digital landscape. 

Step 9: Scaling and Growth

This is where your hard work and dedication start to pay off, and your business begins to flourish. 

Scaling and growth are about taking your business to the next level, expanding your reach, and increasing your profits.

Look closely at your most successful products or services and determine how to boost their success. Is there a way to streamline your processes or automate specific tasks to increase efficiency? 

By doing so, you’ll be able to handle a larger volume of orders and serve more customers without sacrificing quality.

Staying adaptable and open to new opportunities is essential as your business grows. Look for consumer demands, and be willing to change your business model if necessary. This will help you keep one step ahead and continue to satisfy your clients’ every need.

Also, invest in your team and infrastructure. You might need to hire more staff as your company grows or outsource specific tasks to keep things running smoothly. 

You’ll be able to manage the increasing workload and keep the quality of your products or services by forming a solid team and making suitable investments in tools and technologies.

Following these steps on how to start an online business and maintaining a customer-centric approach, you can navigate the dynamic digital landscape and build a thriving online business. 

How To Register An Online Business?

Okay! Now that you know how to start an online business, let’s understand how to register an online business.

I am going to break it down for you below:

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Step 1: Choose a Business Name

First things first, you need a name that captures the essence of your venture. It’s like giving your business its own unique identity. Spend some time brainstorming, and you’re good to go once you’ve got the perfect name.

Step 2: Determine Your Business Structure 

Now here’s where things get a bit technical, but don’t worry, I’ve got your back. You’ll need to decide on the legal structure of your business. 

Are you planning to operate as a sole proprietor, or do you want a limited liability company (LLC)?

Each option has its perks, so do a bit of research to figure out which one suits your business goals and situation.

Step 3: Register Your Business

This is where your business becomes official, like getting your VIP pass to the entrepreneurial world. Head over to your local government website or business registration portal and follow the prompts. 

You’ll need to provide basic information about your business, structure, and contact details. It’s pretty straightforward, and there are guides to help you along the way.

Step 4: Get Employer Identification Number (EIN)

If you plan to hire employees or your business structure requires it, you’ll need an EIN

You might still require one even if you operate as only one person. It’s like a social security number for your business. It helps you manage taxes, open a business bank account, and navigate other financial aspects. 

Getting an EIN is usually free; you can do it online through the IRS website.

Step 5: Permits and License

Depending on the nature of your business and where you operate, you might need specific permits or licenses. 

This can include health permits for selling certain products or a home occupation permit if you’re running your business from home. Check with your local government to ensure you’ve covered all your bases.

Step 6: Set Up a Business Bank Account. 

It’s time to give your business its piggy bank. 

You can better manage your money with a separate business bank account, simplifying things during tax time. Plus, it adds that extra layer of professionalism to your venture.

And there you have it! You’ve successfully registered your online business and are officially in the game. Remember that every step you take will take you closer to accomplishing your goal, so keep your entrepreneurial spirit strong. 

Online Business Ideas For Beginners

As we have looked into the potential reasons to start an online business, here are some online business ideas that I believe are perfect for beginners like yourself:

1. E-commerce Store

The concept of e-commerce has taken the world by storm, revolutionizing how we shop and do business. For beginners, launching an online store has never been more accessible. 

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Platforms such as Shopify, WooCommerce, and BigCommerce empower aspiring entrepreneurs like you to showcase your products to a global audience. From unique handmade crafts to trendy fashion items, the possibilities are boundless. 

Moreover, the dropshipping model allows you to sell products without the hassle of inventory management – your chosen supplier handles shipping, leaving you free to focus on marketing and customer engagement.

2. Blogging and Content Creation

How about content creation?

If you possess a way with words or a knack for creative video content, blogging and content creation could be your calling. 

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Starting a blog or YouTube channel lets you share your expertise, passions, or personal experiences with the world. You can monetize your platform through advertising, sponsorships, and affiliate marketing as your audience grows. 

The beauty of this idea lies in the freedom to express yourself while potentially earning a substantial income over time.

3. Online Tutoring and Courses

Leverage your skills and knowledge by offering online tutoring or creating digital courses. 

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With platforms like Udemy, Teachable, and Coursera, you can package your expertise into easily accessible content that students can purchase. 

Whether you’re an expert in a specific subject, a language, or a craft, this avenue allows you to make a meaningful impact while generating income.

4. Freelance 

The gig economy is thriving, and freelancing offers many opportunities for beginners to showcase their talents. 

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Writing, graphic design, web development, social media management – the demand for these skills and more is ever-growing. 

Websites like Upwork, Fiverr, and Freelancer connect you with clients seeking your services, making freelancing a viable option for those looking to dip their toes into online business.

5. Affiliate Marketing 

Affiliate marketing offers you a compelling chance to make money by endorsing goods or services they value. 

By collaborating with well-known businesses through affiliate programs, you can use your website or social media channels to drive traffic and get money for each purchase made through your specific affiliate link.

6. Virtual Assistance 

Entrepreneurs and small business owners often require support in managing their day-to-day tasks. 

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And as a virtual assistant, you can offer administrative, scheduling, customer support, and even social media management services. 

This idea allows you to tap into the business needs of others while working remotely and managing your schedule.

7. Print on Demand

If you have a creative flair, consider print-on-demand services. 

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Create custom designs for apparel, mugs, phone cases, and more, and let print-on-demand platforms handle production and shipping. This idea empowers you to turn your artistic vision into a profitable business venture.

8. Photography and Stock Images

If you are passionate about photography, selling images as stock photos can generate a steady stream of passive income. 

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Websites like Shutterstock and Adobe Stock provide a platform for photographers to monetize their work.

9. Dropshipping

Dropshipping offers a unique way to manage an online store without the burden of inventory management. Partner with suppliers who handle shipping while you focus on marketing, customer engagement, and creating a compelling brand.

10. Social Media Management

A solid social media presence is essential for businesses in the current digital landscape.

Through strategic content development, engagement, and community building, you can assist businesses in creating and maintaining an effective online presence by providing social media management services.

11. App or Software Development

If you have skill in coding, app or software development presents an avenue for creating innovative solutions to specific problems. 

While this idea may require a higher level of technical expertise, the potential rewards in terms of impact and revenue can be substantial.

12. Wellness and Fitness Coaching

Are health and wellness your passion?

Consider becoming an online fitness or wellness coach. Create personalized fitness plans, offer virtual coaching sessions, and guide clients on their journey to better health.

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These are just a few ideas running through my mind as a beginner looking to start an online business. Each of them comes with its own set of challenges and opportunities. 

Every idea has its learning curve and potential for growth, but the prospect of taking control of your path and exploring the vast world of online business is truly exciting.

Challenges In Starting An Online Business

Let me share some insights on the challenges I faced when starting my online business and that you might encounter in the future:

1. Intense Competition

The online marketplace is bustling with competition. No matter your niche, you’re likely to face numerous established players. Standing out and finding a unique selling proposition can be a significant challenge.

2. Online Visibility

Getting noticed amidst the sea of websites and social media profiles can be challenging. Search engine optimization (SEO) and digital marketing methods are crucial to increase site traffic and boost sales.

3. Customer Trust

Gaining the trust of online customers can be challenging, especially if you’re a new or lesser-known brand. Building credibility through customer reviews, testimonials, and transparent policies is crucial.

4. Cybersecurity Concerns

Online businesses are susceptible to cyber threats and data breaches. Ensuring the security of customer information and payment processing is paramount to maintaining trust and protecting sensitive data.

5. Logistics and Fulfillment

Efficiently managing inventory, shipping, and order fulfillment can be complex, especially when dealing with physical products. Ensuring timely and accurate deliveries is essential for customer satisfaction.

6. Digital Marketing Costs

While online marketing can be cost-effective, it still requires a budget for tools, advertising, and other promotional activities. Finding the right balance between spending and expected returns is a challenge.

7. Customer Experience

Providing an excellent online customer experience can take time and effort. 

Responding to inquiries promptly, offering user-friendly navigation, and ensuring a seamless checkout process are all crucial for customer retention.

Though these challenges might seem daunting, they also allowed me to learn, grow, and adapt. By addressing each challenge with determination, seeking guidance when needed, and staying open to continuous learning, you can overcome these obstacles and build a thriving online business. 

How Much Does It Cost To Start An Online Business?

Starting an online business is exciting, with immense potential for success in today’s digital age. But before even trying, we often put a pause on our business dreams, thinking about the initial investments. 

Yes, the cost of launching your online business will vary based on various factors, but it doesn’t necessarily have to break the bank. 

With careful planning, you can start your journey even with a limited budget. However, you can expect to invest between $5,000 to $50,000 to get your online business up and running. This amount typically covers essential expenses such as website development, domain registration, hosting services, e-commerce platform fees, and initial marketing efforts. 

The beauty of an online business lies in its scalability, allowing you to start small and gradually expand as your business gains traction. 

So, don’t let financial concerns keep you from pursuing your dreams of becoming a successful online entrepreneur. You can make your online business idea a reality with determination, creativity, and a well-thought-out budget.

How Much Can You Earn Through An Online Business?

When it comes to earning from an online business, the possibilities are truly limitless. 

Picture this: sitting in the comfort of your home, sipping on your favorite beverage, and watching your bank account grow. Sounds impressive, right? Well, it can be! 

The amount you can earn from an online business depends on various factors, such as your niche, marketing strategies, and dedication. Some online entrepreneurs have made a few hundred dollars a month, while others have skyrocketed their earnings to thousands or even millions. 

Based on an analysis by Digital Commerce 360 of U.S. Department of Commerce figures, e-commerce sales in the United States hit a record $1.03 trillion in 2022, marking that it crossed $1 trillion for the first time.

However, it’s essential to understand that numerous online businesses, particularly those in their early stages, may achieve lower revenue figures. And it’s crucial to note that many online businesses fail to generate significant profits.

It’s important to note that building a successful online business takes time and effort. 

Some may achieve remarkable success within a few months, while others may take a year or more to reach their desired income level. It depends on your niche, ability to adapt and innovate, and target audience.

For instance, Amazon is the world’s richest and most successful online business. In the second quarter of 2023, Amazon generated $134.383 billion in revenue, marking a significant year-over-year growth of 10.85%, making it one of the largest e-commerce and cloud computing companies globally.

Founded by Jeff Bezos in 1994, the e-commerce giant initially struggled, operating at a loss for several years. 

It took nearly six years, until 2000, for Amazon to turn its first quarterly profit. The company’s relentless focus on customer satisfaction, innovative strategies like Amazon Prime, and diversification into various sectors contributed to its remarkable growth. 

By 2020, Amazon had become one of the world’s most valuable companies, showcasing that perseverance, vision, and a commitment to long-term goals can lead to unparalleled success.

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In the ever-evolving digital realm, mastering how to start an online business is your gateway to independence and innovation. As you tread through the steps of niche selection, market research, branding, and digital marketing, remember that success blooms from a potent mix of passion, persistence, and adaptability. 

With determination and the insights gained from this guide, you can navigate the dynamic world of online entrepreneurship, paving your path to a fulfilling and prosperous online venture.

FAQs on ‘How To Start An Online Business?’

1. How do I create a website for my online business? 

Choose a user-friendly platform like Shopify or WordPress, select a domain name, and customize your website with relevant content, products, or services.

2. How can I attract customers to my online business? 

To enhance online visibility and engage your target audience, use digital marketing techniques, including search engine optimization (SEO), social media marketing, content production, and paid advertising.

3. Do I need any legal documentation to start an online business? 

Yes, you might need to register your company, get the required licenses or permits, and ensure your business complies with local laws. 

Establishing clear privacy, terms of service, and refund policies on your website is also a good idea. To ensure adequate compliance, it is advised to speak with legal experts.

4. Do I need technical skills to start an online business? 

While technical skills can be advantageous, they’re not mandatory. Numerous user-friendly platforms and tools are available for website creation, e-commerce, and digital marketing. You can also consider outsourcing technical tasks or hiring experts if needed.

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Khyati is an entrepreneur, marketing consultant, and a personal finance expert.Building on her achievements, Khyati wrote two acclaimed books: "Failure's Gold," exploring success through hardship, and "Tomorrow's Wallet" on the future of money management.Her work has also been featured by LinkedIn, PPC Hero, Social Pilot, and Training Mag.Khyati has managed over $50M in marketing budgets across various industries including technology, finance, education, retail, consumer goods and more - successfully delivering over 15x ROI for her clients.Khyati has managed over $50M in marketing budgets across various industries including technology, finance, education, retail, consumer goods and more – successfully delivering over 15x ROI for her clients.
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