One should bear in mind that cloud businesses are not that different from other businesses, so you should follow some general steps when starting a cloud business. These include a proper legal structure and pricing model as well as a working business plan.

As far as the cloud side of the business is concerned, you should carefully research cloud computing services that are set to stay in the business for the long run and you should also protect all your intellectual property rights, as they are your main commodity in the cloud. Cloud security is another major factor to consider despite the cloud is getting more and more secure for storing sensitive data.

Define Unique Selling Point and Service Proposition

The cloud is a crowded place these days with numerous companies offering cloud-based services. Nonetheless, you can base your business entirely in the cloud and still have success once you offer an irresistible service proposition.

Whether you sell physical or digital goods in the cloud, or your service is cloud-based, you will usually face fierce competition as cloud-based businesses are growing in numbers. Take your time and define your unique selling point in a very detailed way, even if you need to borrow concepts from other cloud businesses. Being unique is of utmost value these days, as cloud entrepreneurs are starting new businesses on a daily basis all over the world.

Furthermore, the cloud is a democratic place with lowering barrier to entry for many markets. Thus, you must distinguish from the crown unless you happen to have a unique product/service business idea.

Select the Right Pricing Model

Selecting the right pricing model is vital for starting a sustainable business in the cloud. Most cloud businesses prefer a subscription-based pricing model as it results in continuous flow of fresh cash. It works for a good number of cloud services and platforms, as founders now tend to price a cloud service in the double-digit range with many services asking for less than $10 a month, while providing all their basic functions.

This model may work for most cloud services but the one-off payment model is still viable for many businesses that operate entirely in the cloud. It applies to most creative businesses as well as to those who sell digital products and goods. While some of them are experimenting with service fees, the good old one-off payment is still a better option for them.

Choose Suitable Business Structure

One may argue that the difference between a solopreneur and a limited liability company that operates at a small scale is insignificant. This is not true. Your business structure will define many choices you must make as your business grows. So do not take it lightly, and spend some time researching what is the most suitable legal structure for your cloud business.

Also, it is one thing to base your cloud company off New York, another thing to establish it in Delaware, and having your headquarters in Gibraltar is a completely different story. It is not all about taxes and fees you owe to the authorities but also about how customers and investors perceive a certain location when your corporate address is concerned. Also, it impacts your shareholding structure and any legal disputes you may have with partners and/or customers.

So, choose wisely.

Register Any and All Intellectual Property

Intellectual property is a major driver of the cloud economy. Whatever your cloud product may be, one of the first thing to do is to protect your intellectual property and any copyrights you may have.

This applies to both digital and physical products, while digital goods such as software apps are even more likely target for counterfeiting and copying these days. For instance, you can patent your inventions and innovations but it is a lengthy process and you may well see your innovations non-patentable.

A possible solution for any cloud business that is using software-as-a-service or software development services by a third party is to use a software escrow service. Software escrow enables you to have software versions stored with an independent third party and this protects you in case the software developer goes out of business. You can arrange a contract with a software vendor to store the latest stable software release with a software escrow service and thus you can always re-install a working version of the software in case of faulty update or if the software developer went bankrupt and no further support is provided.

Research All Your Cloud Providers

As your business will operate in the cloud, you need to carefully research each and every cloud provider you may use. The process is quite the same as if you are establishing relationships with contractors and vendors when running a brick-and-mortar store. You need to know the corporate history of your partners and check the history of their business relationships with other clients.

The last thing you want is to have a cloud service provider that goes out of business all of a sudden. So, check their financials if they are a public company or research any reliable sources of financial information if your cloud service is a privately held company.

By selecting the most appropriate and reliable cloud services available, you make a big step toward creating a sustainable business operation and eliminate one of the major sources of troubles for your business.

Cloud based business
Image Credit: Pixabay

Research Your Launch Strategy

Once you have your business incorporated and service contracts with cloud vendors concluded, you are one step off launching your cloud-based business.

Your official launch is a moment not only you should remember. You need to plan your cloud-based business launch in detail and secure it will operate smoothly from day one. As you will operate in the cloud, you need to make as many prospects aware that you are launching this day and get as much online exposure as you can get.

Plan for your stocks carefully, if you are selling physical goods. It is not a good idea to start an e-commerce business in the cloud and run out of stock in the very first day.

Keep Your Data and Credentials Safe

Security is a primary concern for any cloud business, and you should not be an exception from the rule. Make every effort to secure your data in the cloud and the data of your customers. Do this by implementing only those cloud solutions that meet the highest security standards and allow audits in regard to observing their data protection policies.

More important, keep your credentials safe in the cloud. You may offer a beneficial cloud service that solves an important problem for your customers but any data leak or stolen credentials will ruin your reputation in hours, not days. Cloud security, along with copyrights, is a major factor for your growth in the cloud.

Ensure Business Continuity in the Cloud

Protecting your and your customers’ security in the cloud is also business critical when business continuity is concerned. But you need more than secure connections and data storage if you are to ensure your business continuity.

Establish strict procedures for backing up your data and keep more than one copy of essential business data. Also, provide for cloud service backups i.e. have an alternative hosting provider for your domain and site in case of emergency and be prepared to switch to alternative cloud service providers should a business-critical service gets unavailable.

Insure Your Cloud Business

Last but not least, business insurance is a legit choice for any cloud-based business. The virtual nature of the cloud may misguide novice entrepreneurs that they do not need business insurance but malicious business parties operate in the cloud the same way they have operated in the real world for centuries.

You can decide to insure your physical goods you sell in the cloud against damages during transportation, or you can insure digital product against hacking. In any case, consider insuring your core business activity against risks that may result in severe financial damages.


Running a successful business entirely in the cloud is not only possible but is getting a preferred choice for many entrepreneurs. And while you cannot have your cloud business protected against all possible risks, you can minimize the dangers of operating a cloud business by implementing a strategy that incorporates the above tips.




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