Chapter One
GET THE SCOOP ON ... Is an online-based business right for you? * How to invest your time and money * Do all businesses work on the Web? * Defining your business idea and making it work for you
Making the Right Business Choices
So you've heard all the hype about the World Wide Web and the profit potential of starting a business on the Information Superhighway. You might have also heard about all of those "dot-bomb" companies that lost a fortune and folded a few years ago.
What's the real truth about the profit potential for an online business? In today's fast-paced business world, can someone still earn a profit by launching and operating an online business? As you're about to discover, the answer is most definitely yes!
Perhaps you've heard the opportunities available to small-business operators on the Internet equated to the Gold Rush, or you've seen statistics that depict online businesses as being the best moneymaking opportunities for the 21st century. The prices of computers continue to drop rapidly, while with each new generation of microprocessor chips, their technological capabilities have improved dramatically. Thus, the equipment needed to operate an online-based business is minimal-far more affordable than ever before to get started. In fact, you can launch an online business with little more than a basic PC that's connected to the Internet, a great idea and a product or service to sell. Inexpensive PCs are available from mail-order companies, like Dell and Gateway, as well as from retail superstores, like CompUSA, Best Buy, and Circuit City.
Thanks to faster dial-up Internet connection speeds, DSL, and broadband Internet connections, surfing the Web is faster than ever. More and more people of all ages are becoming computer literate, and they're beginning to explore the Internet on their own. People from all walks of life and from almost all income levels are finding their way into cyberspace in record numbers, thanks in part to the popularity of America Online and the tremendous marketing efforts of other Internet Service Providers (ISPs), such as MSN, Earthlink, NetZero, Galaxy Internet Service, and many others.
Thousands of new people are making their way into cyberspace every week. These people, just like you, are consumers. Most have major credit cards, a checking account, and a PayPal (a secure online-based payment method) account for making online purchases using their computer.
The Internet's fast-growing popularity has made it an attractive and viable marketing tool for companies looking to reach a broad audience of computer users, plus niche markets made up of people with very specific interests, wants, and needs.
As you're about to discover, if you're planning to launch a successful online business, targeting niche markets with products that a specific group of consumers wants or needs offers a very viable business opportunity for you as the online business operator.
What's involved with starting an online business?
Just a few years ago, establishing a business online (or an "e-commerce website") was something that only large, well-funded companies were able to do; this is no longer the case. These days, virtually anyone with an idea for an online business, an inexpensive personal computer, access to the World Wide Web, and the tools for creating a website can launch their own business venture in cyberspace, with relative ease and with a potentially minimal financial investment. This book will show you how!
Every seller is welcome
The e-commerce industry is truly open to everyone; however, just because it's available doesn't guarantee that your online business venture will make you rich, no matter what the statistics show or how good your idea is. Out of the hundreds (or even thousands) of online businesses launched each month, only a handful will ever become profitable. An even smaller number will make their founders wealthy.
The good news is that starting an online business typically involves far less risk than opening a retail store or traditional mail-order business. But, launching an online business venture that has the potential for success will require a substantial investment of time and creativity on your part. It could also turn into a significant financial investment, depending on the decisions you make and the type of business you'll be launching. As you'll discover, you can start an online business, using a turnkey solution, for a very small initial investment.
Anyone who has explored cyberspace or studied the stock market has heard about all of the online businesses that have launched, gone public, and made their investors a fortune. But most online businesses don't become profitable. Those that have generated profits have done so only after being in business for several years. In many cases, sizable financial investments (in the millions of dollars) were also put into marketing, advertising, and promotion. You don't need to launch your business on a massive scale to earn profit. Millions of online businesses achieve success by starting out very small, targeting a niche market and growing over time.
Online businesses such as America Online, Yahoo!, Amazon.com, eBay.com, Priceline.com, and 1800flowers.com, for example, weren't launched as small start-up businesses. They were created by already-successful business entrepreneurs who raised millions of dollars in investment capital and invested that money in the formation and marketing of their online business ventures.
Still, don't let this discourage you. Whether you're contemplating starting your own online business as a full-time career move or as a part-time way of generating additional income, you certainly have many opportunities available to you in cyberspace for launching a business on a smaller scale that will make money. A great number of small-business operators have successfully established and profited from e-commerce websites. The majority of them have avoided competing head-on with large, mass-market-oriented companies such as Wal-Mart or Target. Instead, they've found a niche market and have sold their unique, customized, or narrowly focused products or services to a well-defined target audience.
As you'll quickly discover, there are no hard-and-fast rules about what works or why. Any product or service you're looking to sell on the Web can be viable if you design your website correctly, target the right audience, and do extensive marketing, advertising, and promotion.
Just having a good business idea isn't enough. Likewise, having a professional-looking website but a poor business idea isn't going to work, either. For an online business to be successful, every aspect of the business has to be well thought out and designed for a specific purpose-to reach your target audience with information, products, and services that they want and need, plus that they can't easily find elsewhere.
Every product is welcome
Since the Internet has become popular, virtually everything-yes Everything-you could possibly imagine has been bought and sold over the Internet. If you surf over to eBay and browse through some of the auctions happening right now, you'll see the vast range of products for sale by companies as well as individuals.
On the Web, you'll easily find car dealerships successfully selling autos. You'll also see real estate (houses, apartments, condos, timeshares, and land) being sold, as well as yachts, jewelry, artwork, insurance, financial services, collectibles, and furniture.
Companies have also found success selling all sorts of mass-market products and services to the general Web-surfing public, such as
* Airline tickets and vacation opportunities
* Antiques
* Books
* CDs
* Clothing
* DVDs
* Electronics
* Equipment/supplies for hobbies
* Luggage
* Makeup and fragrances
* Movie/theater/concert tickets
* Pets and pet supplies
* Toys
* Videos
* Vitamins and other healthcare products
Chances are, if it can be sold via mail order, at a retail store, or at a flea market, someone has already tried selling it on the Web.
If the idea of operating your own business is appealing, you have at least some level of computer literacy (programming knowledge isn't necessarily required), and you have a good idea for an online-based business, you have most of what it takes to get started. You'll also need a computer with access to the Internet (preferably with a high-speed broadband or DSL connection), some type of website development tools, and a product or service to offer.
This book is designed to take you step by step through the process of launching your own online business, from the initial concept stages to the actual development of your website, its ongoing maintenance, and the promotion of the site once it goes online.
It won't be easy
No matter what you've heard about the ease of starting a business Online-how quickly it can be done, how much profit you can make, how little time is required, and how it can be done for little or no money-don't believe it! Establishing a successful online business will require much of the same efforts and resources as starting a traditional business, only the risks are potentially much lower.
As you get started, you'll need to develop a well-thought-out business plan, invest a significant amount of time, make some type of financial commitment, and do an incredible amount of research about your product (or products), your target market, the viability of your overall business idea, and the Web itself.
There are a lot of mistakes you can make when trying to establish an online business and create an online presence for that business. There are also many scams out there targeting would-be entrepreneurs looking to go online in pursuit of riches.
This book will help you avoid many of these common mistakes, scams, and pitfalls. It will also point you directly to hundreds of useful resources available to online business operators.
As you read this book, try to formulate in your mind (and write down on paper) ideas about what type of online-based business you'd be interested in creating, what resources you already have at your disposal, and what useful skills and knowledge you possess. Also, consider what information, skills, knowledge, and resources (financial and otherwise) you know you're lacking.
Once you come up with what you consider to be a brilliant online-based business idea, test it, do research, become an expert regarding who your potential competition will be, and learn everything there is to know about your product or service. Most importantly, you need to understand your target audience and what needs or desires your online business will be fulfilling (or what problems your product/service will solve).
For the purposes of this book, an online business refers to any type of business venture being launched on the Internet. An e-commerce site refers to a website designed to accept orders for products or services. A shopping-cart application is the part of your website that contains the order form and is used to process orders along with credit-card, check, or PayPal payments. PayPal (www.PayPal.com) is a service, owned by eBay, which allows members to easily and securely send and receive money online for purchases made online. Once a PayPal account is created by a Web surfer, he or she can quickly make payments for items purchased online using funds from their checking account, credit card, debit card, or money stored in their PayPal online-based account. PayPal offers an assortment of value-added services to make online financial transactions more secure, especially if items are being bought and sold via online auctions or e-commerce websites.
E-commerce sites typically accept credit-card payments from customers and allow visitors to shop directly online without having to call a toll-free phone number, send a fax, or mail an order form to place an order. Keep in mind, however, that there are countless other terms tossed around this industry to describe online businesses or e-commerce sites, such as
* Virtual businesses
* Virtual stores
* E-stores
* Electronic malls * E-businesses
No matter what type of online business you're hoping to launch, the level of planning, the steps you'll need to take, and the amount of effort required will basically be the same, although, as you'll learn from reading this book, there are many options available to you.
As an entrepreneur, you have taken the first step in identifying the Web as offering boundless opportunity. The next step is discovering how to focus on one aspect of the e-commerce industry in order to find a specific business opportunity that's viable-and of interest to you.
Is an online-based business right for you?
Just as there are many types of traditional businesses, there are many types of online-based businesses and e-commerce sites you can create. Actually planning and establishing an online-based business requires a lot of time and effort. Once the business is operational, the time and money you must invest to keep your business running on a day-to-day basis will vary greatly, depending on the focus of your business-what you'll be selling or what services you'll be offering.
As you investigate the online business opportunities available to you, you'll need to determine whether operating the type of business you have in mind fits your lifestyle. Just a few of the questions you'll need to ask yourself include the following:
* If you're already juggling a full-time job and a personal life, will you have the necessary time to dedicate to the operation of an online business?
* Are you prepared to operate your business for several months (or perhaps several years) before generating a profit?
* Do you have the computer technology necessary to access the Web and maintain your online presence?
* If you'll be operating your business from home, at least initially, do you have the available space to create a home office that will provide a conducive work environment?
* If your business will require you to maintain an inventory of products, do you have room in your home to store that inventory and enough money to maintain it?
* If you'll be selling a specific product, do you have access to adequate suppliers or manufacturers?
Launching your online business venture will take time, money, and plenty of preparation. In this business, knowledge is power. Enter into your business venture fully understanding the basics of online commerce, your target audience, and your products. It's also important to choose a business opportunity that you're excited about and truly believe in.
How best to invest your time and money
There's an age-old saying: "Keep it simple." This is especially true if you'll be launching a start-up business on the Web and have limited business or e-commerce experience. There's no need for you to invest a fortune in creating a website that is cutting-edge (from a technological standpoint) in order to test the viability of your business idea. Using an off-the-shelf Web-page-development and management software package, such as Microsoft FrontPage, or an inexpensive e-commerce turnkey solution (such as Yahoo! Stores or GoDaddy.com's Quick Shopping Cart), you can get your business online inexpensively and relatively easily. These and other options are all explored later in this book.
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Excerpted from Unofficial Guide to Starting a Business Onlineby Jason R. Rich Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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