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  • Introduction

    Starting an online business can be simple, if you have the correct understanding of what is required. Missing just one of the steps, can mean the difference between success and failure. Its unfortunate to see someone give up on their online business, simply because they were unaware of one item, which was required for their success.

    STEP 1: Identify a Niche To Fill

    If you are truly planning on having a successful online business, you will need to find some sort of need to fill. On top of this, you will need to fill the niche/need better than your competitors. Once you have a few ideas in mind, discuss them with some friends. The one that seems to stand out and makes you think, "Wow, thats a good idea" is probably the right one to go with. But, before you are completely sold your idea, you should research your competition. In some cases, you might not be able to outdo your competition. So, getting the right niche is very crucial.

    But, before even deciding on a need or niche, it is wise to understand the enviroment you will be working in. Check out a few of your product niche ideas online by browsing some of your competitor websites. Jot down some of the key needs they are filling and think of how you can do it better. Also, consider in your mind what type of customers will be looking for your product(s). The key to making the sale is understanding your customers. Possibly, you can think of a few ways to fulfill their needs better than your competition! Another way to understand your selling enviroment would be to join newsgroups and discussion groups related to your product niche. Finally, it is wise to take a step back and look at e-commerce as whole on the web.

    CHARACTERISTICS OF A GOOD PRODUCT NICHE: Its unique; It fills a need better than the competition; Seems to have high demand and few sellers; Stands out greatly from other ideas; A small business idea thats doable; Has great cash flow potential.

    NICHE STORE FOR EBAY: Use the nich store concept in conjunction with ebay - Bans - Build a Niche Store.

    STEP 2: Determine Which Product(s) You Will Sell

    As you are defining your niche market and who your customers will be, you need to determine what product or products you will sell to fill the niche. The key is to make sure your product is superior to your competitors atleast in ad copy. If you can make sure your product features more benefits to meet your customer's needs and display this in ad copy, you will be one step ahead of the competition.

    Another key to success is to make as many products as you can covering the product niche. It is not wise to put too much benefit into one product or to ignore some of the product niche. For instance, if you were selling a software item, it would be wise to cover various genres within the product niche. For instance, if you were going to sell a recipe software product, it would be wise to make various versions, some covering Concession Stand Recipes, Restaurant Recipes, Desert Recipes, etc. Covering more genres in the product niche can generate even triple the revenue. Another example would be selling bigscreen TVs. Covering more variety of TVs, such as Plasma, HDTV, Home Theater, etc would also multiply your profits.

    How to Manual for Dropship items:
    Ad Materials for listing the items on ebay or other auction websites:
    How it Works and an Example:
    Where you go to buy it from me after customer pays:

    STEP 3: What Are Your Online Objectives?

    What are your objectives with this online business? Obviously, one of the primary objectives is to make money, but more specifically, how are you going to acheive this? A more formal way to do this is to make a Business Plan.

    To create a Business Plan, you will have to ask yourself several questions: Why am I starting an online business? Why are you starting it online, rather than brick-and-mortar? What would the average person buy online and how would you advertise it?

    Business Plan Format:

    1. Give a brief description of your company and its mission statement.
    2. Develop a solid marketing strategy and a time frame to meet various goals.
    3. Make a financial projection, including the costs required to do your steps and a budget to do it in.
    4. Correlate your marketing strategy with your budget limits and if needed, submit your business plan to a bank to obtain a line of credit. I had to submit my business plan to about eight banks and only one gave me an offer, so you have to be persistant.

    STEP 4: Obtain Tools & Services Needed For Your Business

    One of the main tools you will need for your online business is a web hosting service for your website and email. Now, if you are serious about making money, you can not just get the "bare minimum". The bare minimum would be something you would use for a "personal website". Some companies that offer the bare minimum are Yahoo's Geocities or Free Webspace. Often, people will just sign up for one of these free websites, thinking it will be adequate for their business. I would disagree. If you are going to build an online business, you will need a real website. So, I would suggest finding a solid web hosting service like Ultra Website Hosting, CI Host, Fortune City or Tripod. There are several reasons that you do not want a free web hosting company. First, nothing is free. If you are not paying money to them, you are paying in some other way, generally in advertising banners that seem to take away from your website. Further, they have limitations on bandwidth and the amount of space you have to use. This is essentially putting a ceiling on your success. As soon as you have some real bandwidth on one of these "free" websites, they will cancel your account.

    Another tool would be a desktop computer and peripherals(scanner, printer, etc). It should be obvious to most, but you should have your own computer, as you will be spending some solid time building your business. Using a friend's computer or a library computer is the same as trying to get a free web hosting website. Again, you get what you pay for. The point is to not cut corners. If you are wanting to truly build an online business, you have to put some money into it, along with some good planning.

    Now that you have a web hosting service, you will need to buy software to build your website and upload it to your web hosting server, putting your website online. If you are looking for a very quick route, which requires no understanding of HTML, here are a few programs to use: Web Studio , Macromedia Dreamweaver or Microsoft FrontPage . Essentially, with any of these programs, you can design a website in a drag-n-drop enviroment and upload with ease. Far more simple than the method I utilize. I do my HTML at the code level and use more of the techy tools to create/update my websites. Some of the techy tools I use: Edit Plus - HTML and programming code editor, WS FTP - Website File Transfer from Computer to Server , Shell Telnet - for logging into server to edit code, permissions, etc on the server. and Corel Photo Paint - for editing graphics and photos.

    So the object is to get just enough quality tools and services to cover all your bases when building your online business. Don't try to cut corners by getting things free or really cheap, unless you really understand the software or service. Also do not just buy something because you think you need it. Rather, spend the time figuring out exactly what you need before you buy it.

    STEP 5: Educate Yourself

    Even though there are programs like Dreamweaver, which make it possible to create a website in 24 hours, it is definitely worth your time to get educated on topics pertaining to internet selling. Reading a good book on internet marketing or how to improve your website is worth its weight in gold. If tweaking your website only a little increases your sales by 10%, was it worth it? Of course! My policy is to always stay up-to-date with the latest in internet sales and marketing and continually improve my websites and auctions. Even if you do not find any new information to improve your sales, you might just find something to reduce the amount of workload you have. Either way, you win!

    Sometimes it pays to have a technical consultant assist you in getting your website and/or sales on the right track. Even just asking another internet seller if they have any ideas for improving your website could work wonders. If we try to do it all on our own, we might miss something that is obvious to another. The more minds, the better. Be careful, though, if you choose to hire a technical consultant. Make sure they are on the same page you are. It is always a good policy to find a consultant who thinks like you and who understands where you want to go with your online sales.

    Finding the right people to help out needs to be done with precision when on a shoe string budget. There is a fine line to walk when you are starting an online business. Just how much help do you need? How much can you afford? Possibly, the latter question comes to mind first. A good source of help could be your family (wife, sister, etc). Sometimes, they are willing to help out for little or no pay. But, the trick is to balance between making money, knowing your own ability limits, understanding that family will only help out so long if there is no pay, etc.

    For me, I at first did most of it myself. When I got to the point where I was making good money and the work load was getting larger, I hired a relative to help out. For legal and tax issues, I hired a friend of the family, who was a CPA. The idea is to hire someone who is reliable and who would be willing to do the work long term. One thing to learn right now is that starting a business takes work, but once it is going, you can hire people to do most of the workload. So, work now, have fun later. Or, the other alternative is to work for the rest of your life.

    STEP 6: A Truly Compelling Website

    Just building a website and putting it onto a few search engines is not going to bring in the business. This might get you a couple sales here and there, but definitely nothing large enough to generate real income. Thats where true internet marketing enters the picture. A few marketing techniques that should be applied to your online business: killer ad copy, maximizing position on top search engines, building your e-mailing list and developing seemless marketing strategies through trial and error.

    All the above marketing techniques are discussed in separate articles on this website. Please click on the corresponding links above to see the topic. Often, this is the part of internet selling that is never fully understood. Things like finding a program to build and upload your website are required to even see your website online, but marketing successfully is not. So having a successful internet marketing campaign is the most important component to your online business success.

    STEP 7: Create Systems For Handling Online Transactions

    Another very relevant aspect to your website is how to process orders and fulfill them. There are several secure online payment systems on the internet to choose from. I chose to use Paypal ( for my merchant company. The last I checked, Paypal has some of the lowest fees for online transactions under $200. Through Paypal, you can receive payments by e-check, credit card and instant payment transfer. One of the great things about Paypal is that you can deposit the money into your bank free of charge.

    A few other good online payment solutions on the web: 2 CheckOut, World Pay Internet Payment Solutions and Electronic Transfer, Inc.

    Something else to consider is having enough items in stock to sell. Our natural tendency is to not buy much, as we worry about money and risk. But, what if you are met with great success when you start your sales online? Believe it or not, this does occur on occassion, as I have had it occur to me. So, having more than enough supplies and a system set up for future purchase is very relevant. Of course, the ideal would be to sell something which requires little work to deal with, but do not let this go to your head. Some products might take more work, but at the same time could make you a lot more sales. Consider the fact that your competitors are also looking for the easiest item to sell. There could easily be market saturation if everybody and your cousin is trying to sell some easy to deal with item. Sometimes, it is wise to ask yourself, "What are they not selling, which seems to be in good demand?"

    Once you have sales up and running and are receiving payments, take time to get to know your system and think of ways to imrpove it. Often, you will find simple things here and there to improve the system. On numerous occassions, I have found myself in the situation where I assumed I knew what was best and then after a little reading, noticed that there was a better way. Rather than being stubborn, it is good to check for ways to improve the system.

    Also, watch out for scammers. The best way to describe them is that they are like bloodhounds. Bloodhounds that can smell money a mile away. Generally, I receive atleast 20 scam emails a day. Most scammers on the internet tend to be from the former USSR or Africa(particularly Nigeria). Scammers from the former USSR generally are interested in stealing your identity or credit card information. They will send you emails that appear to be from a bank, eBay, Paypal or some other online transaction company and they ask for you to log into your account through the email. The problem is that it goes to their website and then they have your identity and credit card information. The amazing thing is even if you do not fall for this scam, they still can get you buy attempting to buy something from you using someone elses stolen credit card. I have had it occur several times. It is wise to learn how to adapt to their ways and avoid them. Scammers from Nigeria usually try the Western Union or bank transfer trick, where they send you a large amount of money and then ask you to send a smaller amount back to them. What occurs is the initial large amound of money they sent you is blocked a few days later and you are out the amount of money you sent back to them. I personally know a few people who have lost over $5000 from these type of scams, so this is not something to ignore.

    Once you have sales going on larger scale, it is wise to become a good bookkeeper. This way, you can track your progress and how much net profit you are really making and implement improvements, if needed. Also, at the end of the year, you are going to have to do taxes and if you can not account for the business you did in the year, you are going to have one large mess. Currently, I have a CPA that I hired to help out with the books and taxes, so I do not have to do it. Also, using Online Payment Solutions like Paypal makes it much easier to keep books on sales.. At any rate, you should use a software package of some sort, such as QuickBooks to keep your books.

    In the excitement of your online success, do not forget to treat your customers right! Automation only goes so far and there are going to be customers who will get annoyed at your automation and want to talk to a "real" person. All I can say is talk to them. I usually do it over email, as it is the easiest way. If required, I will talk to them by phone, but its only on a rare occassion. Now, I am not one who entirely agrees with the policy, "The customer is always right", but I do agree that you should try to please your customer and avoid fighting with them or inciting anger. Trust me, once you start seeing the emails pile in, it can become easy to get aggitated with customers. But, do not let it go to your head. Rather, make it your policy to always be nice and helpful. Over the years, this is what I have learned. Further, actually help them or try to bring things to resolution. Some sellers make it a policy to ignore the customers that seem to bother them, but I would not recommend this route, especially if you are seling anything over $15.

    Try to be consistant with your timing of email responses. A good schedule would be to download email daily, allowing the autoresponders to answer some. Then, you personally answer emails every other day. This way, you get a rest from email every other day.

    STEP 8: Promoting Your Business Through Advertising

    There are many great ways to promote your business online. One great approach is to use Google Adwords( or Both of them are essentially competitor cost per click advertising mediums, which interface into the most popular search engines on the internet. Together, they cover all the prime search territory on the net. Overture covers Yahoo!, MSN, Altavista, CNN and Infospace. Google Adwords, on the the other hand, covers Google, America Online, Netscape, Earthlink, Compuserve and more. From the research I have done, cost per click services like these two are far better than using banners or cost per impression. With both Google Adwords and, you will be able to control the cost per click, how much money per day you want in the campaign, keywords and more. You can even track how well your advertising is doing, so you can optimize your advertising dollar.

    Another cost effective way to advertise is through building an opt-in email list. Even if you have little to moderate traffic coming into your website, you can over time build a great email list, which will eventually bring in more sales. It has been said that 10% of those who are added to your opt-in list will eventually buy from you. This is assuming you maximize your email ad copy and regularly use your opt-in mailing list. A very cost effective way to build sales for the future!

    Submitting your website to all the top search engines is also very relevant. But before doing so, it is wise to prepare your website to be the ideal candidate. One of the keys is to have good meta tags. When you submit your website to a search engine, it sends a spider to your website to log documents on your website. The meta tags tell the spider information that will be logged into the search results, such as the title, a short description and keywords. That is why it is a good idea to optimize the meta tag. Here is a tutoral on this topic.

    Over the years, I have noticed a trend. Generally a websites traffic is proportional to the amount of websites that link to it. So, the more websites you can get to link to your website, the greater the traffic. This, of course, means that they need to be legitimate links. A link from your Uncle Joe's personal website probably will not make much difference. We are talking about websites that have some sort of presence on the net. One way to do this is to just ask other webmasters to exchange links. Another way would be to offer something in return if they link to your website. The best way is affiliate advertising, where you offer to pay for leads from their website that leads to sales on yours. They are able to track this through cookies.

    STEP 9: Analyze Your Success

    Before you can judge whether you have success or not with any endeavor, you must first define what the standard for success will be. So, it is good to set goals in the beginning to judge how far you have come by a certain time period.

    A good time scale is 12 months. Make a chart of your goals for the next 12 months. You can make smaller weekly and monthly goals. Look at it as an incremental thing and that your website is going through evolutionary change. It starts as maybe a simple website and you continually improve it in ways to improve your sales.

    The best approach is to continually improve your business until it meets your ultimate large goal. Once it acheives your larger goal, you can choose to leave it there and do upkeep or develop a new ultimate goal. As soon as you meet your ultimate financial goal and are able to hire people to do most of the work, you have freed up your time to pursue whatever, as your time is free and your money is working for you.

    Related Resources

    1. Simple Sites, Big Profits
    2. Buy Complete Websites
    3. 10-step Tutorial for Starting an Internet Business
    4. Starting an Internet Business
    5. Start a business, Write a business plan, Free entrepreneur's guide
    6. How to Start an Internet Business

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