Web-based businesses are arguably the most overhyped and underperforming in the world. How is it reasonable for someone to expect to make a living via the Web?
People misunderstand the idea of what it is to have an Internet business. Making money online means having a proper business, which means perusing your target market, finding out what these customers want and providing them with the information or the services or products they want. But people jump in without having any idea of business or of marketing, and they think they’re going to make a quick buck.
They’ve got to look at it as creating a real business that services their customers. If they do that, then it’s extremely easy to make money online.
What are the opening steps to starting an online business?
The first step is always to choose a target market. You have got to define what type of people you want to provide solutions to. The second step is to identify what they want, and the third step is to create that solution. The fourth step is to connect that group of people to your Web site through the Internet.
It’s a fairly straight-forward process, but most people completely miss the first three steps and jump straight to the fourth step, thinking, “Oh, I’m just going to sell a bunch of stuff online.”
How can you determine whether what you want to sell delivers something people are looking for?
Pay for a bit of advertising — Google AdWords or Facebook advertising or Yahoo! advertising. You might pay a couple hundred dollars to get three or four hundred clicks. Then you get the feedback from buyers — do they ask for a refund? Do they like it?
Out of 400 clicks, you could maybe expect to make five, six, maybe eight sales. If you’ve made zero sales, then you know that hasn’t worked.
What startup costs should you expect to incur?
You could start off with just $1,000. That would give you enough cash for your first couple of months of advertising, promotion and setting up the Web site.
What measure should you use to determine if you’ve got a successful venture and can quit your day job?
A straightforward formula is the number of subscribers on your mailing list. Typically, for every subscriber, you can expect to make 50 cents to a dollar per month. If you’ve built up a mailing list of 2,000 subscribers, you can expect to make an average of $1,000 to $2,000 a month.
Another rule of thumb is if you can get 400 visitors a day to your Web site, you should be able to quit your full-time job. That’s an average number to make a full-time living. It’s incredibly easy to achieve because there are hundreds and hundreds of ways of getting traffic. It takes a few months to get to that tipping point.