10 Keys to Creating a Profitable Online Business
Starting an online business is not always as easy as it may sound. But running an online business has many benefits over its offline counterpart. First, and the most appealing, is you'll most likely be working from home from your own computer, and working the hours that suit you. And secondly, you have the potential to make a lot more money than you would if you were working for someone else.
Before embarking on an online entrepreneurial quest for the perfect home-based business, it's advisable to look at the array of online business opportunities available and decide which would be the most suitable for you. While it's quite conceivable, that the most profitable and legitimate type of online businesses can be operated successfully by one person, most involve a collaboration of skills and input.
For the individual, making money online is a very real prospect, but there are some important factors that should be considered before taking that first vital step.
1. Should you sell a service?
Unless you have a well-developed skill such as, web design, graphics design, writing or some other creative or artistic flair, you'll have to concentrate on finding or creating a product.
In selling your services, you must first determine whether a paying market actually exists for your services. Initially, you'll need to do some research and look at similar services being offered. A good indicator is usually when there are numerous similar services available. This would suggest a buoyant market, but it's not always the case. A friendly yet inquisitive email sent to a few established service providers in the business you're considering, should give you an insight.
Take a good look at the existing competition. Look at the quality of their work. Could you do it better? What prices are they charging? Could you do it cheaper? If you can effectively do either of these, you're on your way to building online wealth.
2. Should you sell a product?
More people than ever buy products online, but the main thing to consider is whether you want to sell a tangible product or a virtual product.
As with selling a service, you must first determine whether a market exists for your product. Look at similar products then decide whether there's room for another player. All products will have to be sold through a website, from which an order can be taken, and a payment can be processed. If you have the knowledge and necessary skills, you can easily build the website yourself. Otherwise, you will have to pay a professional.
A tangible product is something that can be held in the hand; therefore, it will also need to be packed and shipped. Processing orders is very time consuming, but more importantly you may have to keep inventory, which can be very expensive plus you'll need to find storage space.
An alternative is to sell virtual products. These include downloadable e-books, videos and information products. You'll still need a website with ordering and credit card processing facilities, but you will not need to keep any inventory and it won't take up any space (except on your computer's hard drive) Many successful Internet marketers use this method to maximum effect.
3. Selling someone else's product
Some of the best online business opportunities are very simple to set up and run. The first of these is affiliate marketing. You simply find some existing products that are being successfully sold on the Internet and sign up for their affiliate program. Basically, this is straight-forward process. You complete an online application form and you're given a reference number, which you can embed into your marketing links. The host company will also track your sales and pay you commissions. All you have to do is sell their products.
Some people go overboard on affiliate programs, trying to sell anything and everything they can sign up for. It's advisable to concentrate on a few related items such as e-books on a similar subject. When that enterprise begins to make money online, start all over again with a set of different products. With careful consideration and clever marketing, affiliate programs can be the perfect way of making money online. A good place to start is www.clickbank.com.
4. Buying a business or franchise
If you'd prefer to buy a readymade business, there are many to choose from. Some established and profitable Internet businesses will gladly sell you a franchise. This will most likely be a clone of their existing business, but beware! Owning a franchise business on the Internet will prove useless unless you have territorial rights. The problem with online franchises is your limitations on what you can sell. You must sign an agreement with the franchisor, that you, the franchisee will only sell their range of products.
5. Online investment opportunities
Not strictly a business opportunity but investing in real estate or stocks and shares has become big business in itself. The Internet has opened up all kinds of opportunities for investors, and it's so easy to go online and find stockbrokers willing to advise you where to put your hard-earned cash for the maximum return. The big consideration with investing is to remember that prices can fall just as quickly as they rise.
6. Finding the right market
Whatever service or product you decide to offer your online customers, you must first establish whether there's a need for it. If there is, you'll have to work on an effective strategy of getting your product in front of your prospect ahead of the competition.
It's been proven time and again that small is big. The small or niche market has been responsible for many people making a nice profit from the Internet. It's as well to remember, that a niche market on the internet could number well over a million potential customers. Just 5% of a market this size, each buying a product with a $10 profit margin, would return $500,000 in profits.
A few examples of niche markets might be Holidays for singles over 40, sports and fashion wear for children 6-24 months or easy car maintenance for lady drivers.
7. Online Auctions
The phenomenal success of online auctions, eBay in particular, is unprecedented. Not only are the online auction companies making large profits, but they also give everyone an opportunity to sell something to anyone anywhere in the world. From fashion accessories to collectibles and sports equipment to memorabilia, there appears to be a market, although limited, for everything.
The key to success here is to buy wholesale and sell volume. When you've got to the point of making good money from online auctions, simply write a book and tell everyone else how you did it. To get started in online auctions, go to eBay, click on wholesale, buy some stock and resell individually back on eBay.
8. Paid Surveys
Some people might not consider clicking boxes alongside questions a valid business opportunity. But if you consider it work, and the survey companies are willing to pay you, then it must be a form of business to be considered. It's something almost anyone can do, doesn't require any specialist knowledge or skill and can be done from anywhere.
The downside is, it's tedious and won't make you a fortune. However, it's the ideal part-time opportunity for people with a few hours to spare or to run alongside a new venture during the 'quiet' periods.
9. Enthusiasm, Commitment and Self-Discipline
Looking at the various online business opportunities and how you should evaluate them is only part of the equation for online wealth building. Working for yourself in your home-based business will require real enthusiasm, commitment and copious amounts of self-discipline. Whichever route or opportunity you consider, all will require a degree of 'do-ability'.
Be prepared to spend more time at your computer, especially in the early months, building your business and getting your products in front of likely prospects. If you do it right, an online business can pay you big monetary rewards.
10. Accounting the costs
If you plan to set up and run an online business as your main source of income, beware! The tax man cometh! An online business is no different to a bricks and mortar business, in the eyes of the IRS. If you establish an online business and you're making a full-time income, don't forget to inform the authorities. You must have a business name, although this could be your own name, preferably a business bank account and you'll need to inform the IRS.
You'll need to keep records of all your business transactions for accounting purposes and you'll need to set aside a percentage of your profits to cover taxes. Microsoft's Excel program is perfect for keeping records of this nature, but don't forget to keep a back-up of your files, just in case. The message here is to play it straight and keep it legal.
Of all the things you should consider, when planning to start an online business, the most important is undoubtedly marketing. Marketing strategies can make or break a business.