Use these guidelines to help you hone in on the perfect internet business to meet your skills and income needs.
1. Don’t quit your day job. Since there are no guarantees in life, it doesn’t make sense to quit your day job until your internet business has proved it can replace the income your day job provides. Even then, you may want to keep your day job.
2. Understand that internet businesses fail. As proven by the dot com collapse, there is nothing ‘magical’ about having a business on the internet that guarantees success. In fact, most attempts at creating profitable businesses on the internet have failed. Even the big companies that have poured billions into their internet businesses have seen the majority of their efforts fail. Don’t let this discourage you, though; just understand that failure is more frequent than success.
3. Establish your working parameters. Before you start evaluating different internet businesses, clearly establish your working parameters. Define how many hours a day, a week, or a month you are willing to work on the business. Define how much money you can afford to invest in startup costs. Define how many employees (if any), you are willing to take on and manage – (it was 2 years before I took on a part time member of staff), and define your exit strategy.
It is a good idea to discuss these parameters with your spouse or family partners before you set them in stone. Their input is important to your success.
4. Define your goals. Define what you want to accomplish with your internet business. How much income must the business generate before it is a success? How much a day, a week, a month, a year? The amount of income you desire directly impacts which business models you choose.
5. Review the business models that have proven successful on the internet. The recent shakeout on the internet has left only a relatively few businesses standing. By looking at the survivors, we can see that a few business models seem to work well on the internet, while others have little chance of success.
Those business models that work well include:
* Subscription sites – charging a membership or subscription fee in return for providing access to a web site
* Applications on tap – charging a fee to use a product or service on the net
* Specialised software – developing and marketing specialised software to fit the special needs of higher end customers
* Support services – offering products, tools, templates, training on how to improve internet businesses
* eBay sales – selling items on eBay, either your own products, or working as an eBay Trading Assistant helping others sell their items.
The common denominator in all the above business models is the product is information or service based, and is delivered over the web. Choose a business model built on this and you have a much better chance of success.
6. Avoid business models that are failure prone. The massive failure of so many well-funded internet business ventures has shown the following business models should be avoided:
* Any business model that involves the physical delivery of products with minimal profit margins. Don’t try to sell dog food, groceries, furniture, or other widely available products via the net.
* Any business model that puts you in direct competition with Tesco, Amazon, Dell, or eBay. These larger companies can do it better, they can buy products cheaper, they have deeper pockets, and can sell at a loss longer than you can. The only way to win – don’t compete with them.
* Any business model where you buy wholesale, and try to sell retail. The margins are too slim, too much volume is required to make a profit. (If in doubt, ask Amazon.)
For the best chance of success choose a business model where you create or own the product you sell, the product is delivered digitally, you have little direct competition, customers can order online, and a single copy of the same product can be sold many times.
7. Evaluate your goals and parameters against each of the successful business models. Since it will be you who actually has to spend the hours working on your internet business, it should be you who decides which of the business models mentioned above best fit your time, talent, and desires. Some business models will produce lower incomes, but will require less work. While others will require much more work, but can produce much higher income.
Be sure to take into account how you might become a ‘prisoner of your own success’ if you choose a business model that requires your full time attention as your business grows.
8. Don’t overlook the obvious. You may already have the skills, expertise, inside knowledge, or niche hobby interest that could be the basis for a great internet business. For example, if you have several years experience running a bed & breakfast, then you might want to consider offering an internet based information product for those wanting to open their own bed & breakfast (a newsletter, a subscription web site, a buy/sell service, etc.).
9. Be careful who you take advice from. There are a lot of people offering advice on the subject of creating a successful online business. The only problem – the vast majority of these people haven’t had any success in creating or running their own online business. Most just jump into the advice or ‘guru’ business because it seems like an easy thing to do.
If you want to rely on gurus to lead you down the path, be sure they’ve been down the path themselves.
10. Listen to your heart and your head. Get involved with those businesses that make you happy and give you a reason to get up each morning. Avoid the ‘sounds too good to be true’ pitches, and the ‘I wouldn’t do this, but I really need the money’ excuses. Keep your priorities straight – family, health, spirit, community, and then, business.
One final tip – often it is a lot easier to get into a business than it is to get out of it.
Choose your business with as much diligence as you would choose a wife or husband. Because in the long run you may end up spending as much time with your business as you do with your spouse!