Do you have an idea for an online business? Great. Because the power of the Internet allows you to reach literally every corner of the globe inexpensively. Even so, how do you know if your business will be successful? Unfortunately, most businesses barely make it two years before failing.
You need to do your research before rushing into an online start-up. It is true that you can start and manage an online business with a limited budget. However, even shoestring budgets need to be protected. Take the following steps before you launch an Internet biz and you drastically improve your odds of success.
Understand How the Web Makes You Money
You need to see if your service or product can use one of the proven web models for making money. Shoe stores are viable brick-and-mortar businesses. On the contrary, shoes do not always sell as well on the web. People have to physically try on shoes to make sure they fit. So you need to see if your business idea can fit one of the following methods for proven profit generation on the web:
- Selling information
- Selling online services
- Reselling another company's products (retail and drop ship)
- Referring people to make a purchase somewhere else and receiving a commission (affiliate marketing)
- Selling your own products online (for shipping or download)
See if There Is a Viable Market Online
If there is someone already selling a product or service similar to your offer online, you may think that is a bad thing. The opposite is true. Research the web for businesses similar to yours. Then see if they are spending money on advertising and marketing. A business that knows what it's doing won't throw good money after bad, so a continued advertising campaign shows that a business is making money with the goods or services it is advertising. This is a positive indication that the business may be a profitable one for you to enter.
Do Smart Keyword Research
Google claims 75% to 85% of all desktop and mobile web searches, so we will start our keyword research there. Type “buy ____ online” and “online ____ business” into Google. Fill in the blank with the name of your product, service or offer. Use other variations of keywords and phrases related to the business you want to start. You want to see thousands, or even millions, of search results. Multiple advertisements by different companies also reveal you have a good idea for a potentially successful web business.
Figure Your Costs
How much does it cost to build a website? How are you going to get traffic, through generic or paid channels? What is your product fulfillment process? How much will that cost you? You need to understand your start-up and management costs for running an online business to find out if it is a smart or financially disastrous idea.