The Power of Working from Home
When it comes to owning your own online business, there are many myths out there. There is one particularly common myth that continues to allure and attract people, especially during these hard economic times. It is the concept of just sitting around in your pajamas at home, firing up your computer, looking at your online payment screen, and seeing all the orders rolling in. While this is true for a certain proportion of people that own their online business, this is certainly not true for the majority. For most people struggling to make it online, the online business field is just as challenging, if not more so, than the offline brick-and-mortar business world. With that said, there are many benefits to having an online business. For one thing, it is easier to manage the accounting/profit-loss/cashflow of your business; everything is numbers-driven. There are less people to deal with, in terms of tracking down items. You can work anytime, anywhere. Issues like payment processing that could be a hassle in the offline world can be automated. However, to get to the stage where everything is automated and business is easier for you to handle, a lot of work needs to be done. This Ereviewguide.com guide to starting an online business does not assume anything. We will walk you all the way from start to finish.
Research & Theory: Before Doing Anything Else
Determining your Niche Industry
‘Niche’ is a specific industry that you can base your online business on. Not every industry is conducive to online commerce. For example, a gas station where you have to physically fill up an automobile is not conducive to online automation. However, discount gas cards for use at gas stations is a niche conducive for online commerce. See the difference? You have to select your industry based on its web applicability. It must be able to conduct online business for a specific industry.
Income Potentials & Low Profit Activities
The next criteria for finding a niche is the income potential of that particular business. While putting your business online reduces a lot of your overhead, you still have to factor in not just your actual costs such as labor, cost of software, hosting, website design, and other fixed costs, you have to also factor in opportunity costs. How much is your time worth? How much is your thinking time worth? As your business grows, your opportunity costs grow as well because if you have proven your business acumen, your ideas are worth more. So if you are wasting your time on low profit activities, your opportunity costs actually increase with your proficiency.
Research your Competition
The next consideration about finding an online niche is the level of competition. This is quite deceptive. While it is easy to look at direct competitors – people who are already doing what you planned to do online – it takes a lot of creativity to look at your indirect competitors. Indirect competitors actually take a lot of dollars out of your pocket if you don’t spot them correctly. Make sure that the level of competition for the industry that you are trying to get into is manageable. One way to manage competition is to look into a specific niche within the industry that you could specialize in. For example, the online transcription business is a very competitive niche with many low-wage countries offering basic transcription services at progressively decreasing rates. While transcription jobs in the United States 20 years ago could fetch up to 10 to 20 dollars per hour, this is no longer the case in the case of general transcription. You can gain a competitive advantage by specializing in a particular transcription field. For example, there are specific types of medical transcriptions. Certain hospitals have specific software that require specially trained or certified people to handle. The rule of thumb is, the more specialized you are, the less competition you have and the higher rates you could earn.
However, there is a caveat to this route. Sometimes being too involved with a particular niche makes you susceptible to unavoidable industry changes that make that sub-niche obsolete. For example, in medical transcription, there are new software suites coming out that are sophisticated enough to automatically transcribe based on the dictation model. As the doctor dictates, it will automatically transcribe. This is why even in many low wage countries, a large segment of the transcription industries is going through a seachange.
Decide between products or services
Another consideration is – what type of goods or services will you offer? This is very important because there are a lot of costs involved in certain businesses. If you are offering goods, you have to know about its shipping costs and other details, you can also get details by reading our other resource on e-commerce and how to sell physical products. There are certain products that can be shipped at a low cost, you can look at amazon.com for these products. However, your profit margin changes dramatically based on your particular product mix. Determine the type of product that you wish to sell. For example, digital products are the best fit for internet businesses because these can just be put on a remote server. When the client pays, they download the digital product. It is very easy – no fuss, no muss.
Services can go either way. Some services like writing, transcription, and data-entry can be performed separately. The report could be attached to an e-mail and sent to an email address. However, not all those types of services are conducive to an internet business model. This is particularly true if there is a high level of analysis needed and the data that needs to be analyzed or gathered on site or in realtime. So in that sense, an offline model is needed. These are the key questions you have to answer first because it really influences your profitability. Moreover, it affects your ability to deliver products or services.
Are your target buyers Internet-ready or Internet-savvy?
The final consideration is your buyers. It does not matter if all the prior factors fit, if your buyers are not already on the internet or if they are not internet-savvy, there might be serious problems. For example, there are certain industries like vending machines or certain types of gas stations that are wedded to offline business models. It means that buyers or sellers look for those services offline. Determine where your buyers prefer to buy so you will not lose money.
Building a Website
Now that you have decided to put your business online, the next step is to build a website. There are four key considerations regarding this important step in building an online business.
Round up competiting websites
First, you have to appeal to your target market. This is easier said than done. Unless you have spent a lot of time intimately knowing your target customers and people in the industry, it is really hard to shoot in the dark. You have to find out your target market’s affinities, how it likes to be approached, and how it likes to process information. Believe it or not, different types of people react and respond to marketing messages differently because these marketing messages differ from industry to industry. There are certain basic market truths that do not change from industry to industry but that’s not we’re talking about. We’re talking about a specific way to communicate with your target market. You can succeed in doing so by putting a lot of research into your target market. See what appeals to them. See what works. See what doesn’t work. Get the “best of breed” sites out there. You can learn about the best sites out there based on Alexa rankings and based on how many people actually visit their websites. Moreover, if they are public companies, look at their SEC filings, their online sales report, etc. You can deduce from there. The more research you put into target market appeal, the higher the likelihood that your website will generate sales.
Determine your target keywords
The second consideration is the keywords for your website. Your site must contain the keywords and terms that your target market actually use in looking for your type of business. You have to look at particular keywords that apply to your particular business. It is important to have the right articles and information on your website. People use the internet primarily to look for information. That is one of the most common uses for the internet; this need is not going to go anywhere soon. Therefore, you have to research your industry niche and get into the mind of your target market. Find out what they are looking or searching for and what are their needs and then write articles based on that. Write “How Tos”, and “FAQ’s” (frequently asked questions). Write about anything and everything that builds a resource for your target market so that they can go to your website. It helps you with actually providing information to your target market and getting their attention. Furthermore, it helps you steer the direction of the conversation the way you want it to go. Remember, the website that you are building is not an online business card. It is not an online catalog. It is a dialogue; it is a conversation. The information that you put says a lot about your credibility and your legitimacy. So if the information that you put in your website makes you more credible, it is not hard to make a sale. If you know what you are talking about and you fully understand your customers and their needs, the higher the likelihood that they would make a purchase.
Write your website to SELL
The next consideration in terms of building a website is really the tricky part – writing to sell. A website is not an online brochure. This is a very fatal mistake that many newbie webmasters and online business owners commit. They think that they just put on something like a menu, an online catalog online, or just some generic About Us business page, then people would buy. Wrong! It doesn’t work that way. Your website must be written to sell. There is a big difference between the sales dynamics that is at work here. In the offline world, for example, a salesman approaches you. There’s eye contact. He feels you out. Then he drops in some hooks and you fall for the hooks. Afterwards, he drops in some more and then he gets you to buy. It doesn’t work that way in online sales although the process is the same. There is a specific way of writing your website so that you get the people’s attention and interests, then make them decide to commit to an action. This is an art; this is not a science. Constant experimentation as well as the devotion of time, effort, and energy is needed. Money is not necessarily needed although you could outsource this to other people who have years of experience under their belt making a webpage sell. But if you’re going to do this on your own, you have to devote yourself to constant experimentation to get your page to come out correctly.
Select a Payment Processing system or Provider
Finally, when it comes to building a website, payment processing is very important. There are many options available now to enable your website visitors to pay you. Originally, these involve just taking credit card payments, which can be very tricky. You have to have a merchant account, go through a risk assessment, fill out paperwork, etc. It’s hassle. With the rise of Paypal, Payoneer, and Alertpay, among many others, it’s easier to put payment buttons on your website. Your customer just clicks up the payment option, puts in credit card or account information there, and at a click of a button, they make the payment to you. Make sure you read up on these various services’ terms and conditions so you can avoid those that have lots of fees or hidden charges. One obvious fee is the exchange rate if you are taking international transactions. Payment processing systems normally exchange currencies (US dollars or Euro) at a much lower rate than through a bank or normal exchange means. They will also slap you with service fees and all sorts of charges. It is wise to compare services very carefully.
Online Traffic Generation: No traffic means No money
You now have built a website, picked an industry, and done on assessments regarding what works in that industry and how to build a website for it. Your website will still be worthless and you’re not going to make money if you don’t get traffic. That’s the bottom line and that’s the painful truth. Many people can pick out a successful business; some could design a great-looking website while others could write a great sales copy for a website. Nevertheless, very few can generate traffic. This is the bread and butter of your online business. Many pathetically designed websites out there generate money. They could be making more if they were designed and engineered better but they’re still making money because they get traffic. And this should take 99% of your time if you are serious about your online business.
We are not going into a very detailed discussion of how to generate online traffic. However, in this short guide, we will step you through a simple list and some key general principles you need to follow in order to get the best results in this area.
Harness the Power of Opt-in Email
The most powerful way to make money off your website is not through instant sales. It is a very rare situation where somebody goes to a website and, right then and there, buys instantly or directly. Most of the time, somebody would visit your site and then they would leave and gone forever. They will never come back. All the time, effort, and money you put in your site is wasted. However, the more people that go to your website, the higher the chance that somebody would click through and buy something.
So how do you boost this probability? You qualify people. You do this by collecting e-mail from your website. There are many online tools available on how you can effectively do this. The key is to offer some sort of incentives, freebies, or benefits for them to want to be added on to your mailing lists. Once you have compiled your mailing list, you must be able to give them something tangible to encourage them to come back to your website. You can do this one by announcing updates. Publicize key changes to your website. Regardless of whatever way you do it, you have to consider having an email collection. This is really the tried and proven way to generate traffic and sales.
Paid Advertising Options
The other ways to promote your site and generate traffic are divided into two camps: paid advertising and unpaid advertising. Paid advertising is pretty straightforward. You go to Google Adwords, Yahoo publishing network, or any other program. In exchange for payment, your text link will show up on a search result or in a webpage. When people click it, a fee will be taken off your balance. If they click the text link, it will lead them to your site. If they like your site and place an order, you will earn from that. The same model works for banners, for large ads that are placed on specific websites, and sponsorships.
There is a slight twist to this model when it comes to pay-per-lead. There are certain websites where the only thing they do is collect email. You pay them money to send an email to people interested in your particular category or niche. That’s how those people then go to your website and, if they like what you have to offer, buy.
“Free” Traffic Generation Options
The unpaid way to promote your website falls into two major camps: search engine optimization and social media marketing. Search engine optimization is not exactly unpaid because a lot of the work that is needed to effectively optimize your website for search engines has to be outsourced. It’s just too tedious, too repetitive, and too numerous to be done on your own. If SEO interests you and you want to learn more read our SEO guide of everything you wanted to know about SEO.
SEO Software
However, there are certain software packages that automate this process. Alarmingly, search engines consider automated SEO as a‘spammy’ way to search engine optimize your site. You have to be very careful. Furthermore, many SEO packages carry a lot of hype. They cost hundreds of dollars but when you use the software, it doesn’t produce results and you’re out of money. Be very discriminating when considering the effectiveness of these particular products. Usually, if something is built or hyped as too good to be true, then maybe it is.
Social Media Marketing
Social media marketing is fast gaining popularity and there are a lot of myths that surround this particular free-form marketing. People think that if you just have a Twitter account or Facebook account and you spam links to your friends, people would buy. It doesn’t work that way. There are certain techniques you can use to get your brand out, read our facebook marketing guide to learn what you can and cannot do. Social network marketing and social media marketing is more about branding not direct sales. Search engine optimization is about direct sales because it allows you to take rifle shots at your target market. Social media marketing is not so much like that. There are free methods but you may end up wasting time and effort for something that doesn’t yield much results.
Take for example Twitter. A lot of Twitter e-books are telling users it’s some sort of online marketing silver bullet. It isn’t. It only works for certain types of businesses. So be very careful. Read our Twitter Marketing Guide If you want to know more about how to market something on facebook and how things.
Some Key Tips For Online Success
There are three golden rules to making it big online. If you follow these golden rules, you should be okay. You just have to be diligent. Think long term. Always remember that an online business is a marathon; it is not a sprint. Look to build something that is going to last. The efforts and challenges are going to last a long time before you can finally reaping your reward. It will be worth it. Follow these three golden tips for maximum online business success.
Provide real value that beats your competition
If you are going online and you don’t have a competitive advantage in terms of higher quality, better speed, added benefits, or lower costs, then you have no business competing. Simple as that. If you can’t offer something better than the competition, you’re just wasting your time. If a costumer wanted mediocrity, they’d get it somewhere else. If it’s going to cost the same or if it’s going to be the same quality, why take a risk on you when they can get it from somebody they know? Always stand apart from the crowd.
Customer service is crucial
Your customer is your master. This is no time to let personal pride or false ideas about a business get in the way for you to serve your customer fully. If your customer says “jump”, it’s not a question of “if”. The question that must come to your mind is “how high?” The customer is your lifeblood. Why is this? Because the cheapest source of sales are your existing customers. Word-of-mouth from somebody that is trusted goes a much longer way in getting a new sale than converting a website newbie. This is common sense. It has been true for hundreds of years and it’s going to be true until humanity ceases to exist. This is a psychological fact.
Know your market
We’ve already stepped through the process of selecting a niche and researching it. The bottom line is you have to know your market. Knowing your market means being a customer, being in the shoes of your target market, being up-to-date regarding the current trends of your market, and being up-to-date regarding the challenges that your customers face. Compassion and empathy go a long way in knowing your market and ultimately generating more sales. Do not look at your customer as just a cash cow waiting to be milked or just some unlucky clowns ripe for the taking. This wrong mentality will lead to failure. If you want to succeed in this game, know your market, get in the head of your customer, and open your heart to your customers’ needs.
The Bottom Line: How To Start an Online Business
Starting an online business must focus on the word ‘business’ in the term “online business”. It is a business. It requires commitment. It requires responsibility, reliability, and discipline. Like anything else worthwhile, the first time or the first hundred times you try, you will not succeed. The key is to keep fighting against the temptation to quit, to keep building on what you have established, and to keep going. With every failure comes knowledge and experience. These are the cornerstones of truly lasting online business success.
