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So, you've decided to start your own business on the Internet. Congratulations! It will probably be the best decision in your life. Only working for yourself can give you independence, stability and satisfaction that you always dreamt about. With your own business, you can define your lifestyle and work schedule yourself. And with internet business, you can do it with less efforts and more fun. But of course, as with every other serious undertaking, you first have to educate yourself, and do it well.

How to make money on the Internet

Everyone knows that the Internet has become something more than the information source. Today, many people make money on the Internet, and even more people want to join them. Not all of them succeed, unfortunately. You must have heard about lots of "dot-bombs", failed e-commerce startups. They are big in number, mainly because most people don't devote enough time to self-education.

Another common reason for loosing money on the Internet is the large number of "Get rich quick" schemes, which all promise large income with little or no effort, with only a few dollars to spend for some kind of manual or "program membership". You will never get into this kind of trouble, if you understand one simple thing:

The only guaranteed way to earn money on the Internet or elsewhere is through honestly selling a valuable product or service to a proper audience. Period.

Read the previous passage once again. Think about it. It's pretty obvious, isn't it? But many people could save their money and time if they ever thought about that.

So, let's make an important conclusion. To make money on the Internet, you need to decide what to sell, and then, start your own business.

Someone would say, "But that's all so complicated! I have never been taught to run a business! I even don't know how to start!" Well, how do you think, who are those people that run all businesses on the Internet? Are they all geniuses? No! Geniuses don't happen to be born that often. Are they some super-creatures, mutants, or aliens from the stars? Not likely. Most of them are common people like you and us. The only difference between them and those "dot-bomb" runners is that they learned more, and they carefully plan their actions. So should do you. If you don't know what to start from, read the articles on our web site to learn the big picture, then use search engines to learn the details.

You don't have to be a professional web designer, software developer, or marketing expert to run a successful e-business. There are lots of hired professionals who will gladly help you, and there is inexpensive software that will do all the necessary automation for you. Your starting investment can range from a few hundred dollars to zero. The balance here is between your time and money. If you can invest some money, you can hire some experts or buy some software. If you don't want to spend too much money, but have a lot of time to learn, then you can do most of the work yourself, and do with only minimal automation at the beginning.

In general, if you can read and write (or have someone near you who can), then you can run a successful e-business. The only important thing that is up to you in most cases is a good product idea.

There is one more important choice for you to make: should you sell a product, or your service? There is no single answer, both choices are viable, and you can choose what you like better, or what you think you can do better. But there is a large difference between these two types of business.

When you sell a product, your income is only limited by the target audience size, and by the efficiency of your selling process. With e-business, you can automate the selling process almost fully, and free up most of your working time for more important things, such as business growth, research, or new product development. Well, when you come to think you are satisfied with your income and don't need any more growth, you can simply relax and watch your business work while you are enjoying your life.

When you sell your service, your income is strictly limited by the amount of time you can devote to it (probably not more than 8-12 hours a day). And working 8 to 12 hours a day continuously is not much fun, as it leaves you little time for your rest, hobbies, and family. That's why we recommend you to try and create a product, even if you always sold your working time and never thought about creating a product.

If you have difficulties inventing your own product, the least thing you can always do is "materialize" your work experience. You can structure and write down the tips and tricks of your everyday work, or your hobby, and give your readers the advice how to succeed in that field. You can teach them how to save their time, or how to earn extra money with little efforts, or something else you think they would be willing to pay for. Then, you can sell your book on the Internet in either electronic or paper form. Everyone knows something valuable for other people, and you are not an exception. We'll describe the process of creating your own information product in another article.

How can a small home business prosper on the Internet

There are natural differences between large and small businesses. When you run a small business, you don't have a multi-million dollar advertising budget, and you don't have a lot of personnel to handle the sales and other paperwork. The good news is that with electronic business, you need very little resources to succeed!

The secret here is to find a good market niche, and to create a great product for it. These two actions are strongly interconnected, because each market niche corresponds to a product, or a set of products, and vice versa.

So, what is a "good market niche", and how can you find one? Market niche is your place in the market, your target audience. It should be big enough to generate good income, but not too large. You could ask, "Why? The larger my target audience, the larger my potential income, right?" Right, to some extent. But you can't be everything for everyone. You simply don't have the resources for that. So, if you try to take up too large niche, you'll have to compete large corporations, which is impossible for a small business. Here is a small example. If you try and open an online universal book store, you'll never have a reasonable market share, because works in the same market and has much more resources. But if you specialize and pick a smaller niche (say, old comic books reprint), your chances to succeed are much higher. In this case, your target market will be too small to attract, and you'll be able to write stylish targeted ads, promote your business in online comic books community, and do other things that your larger competition will never even think to do.

And, in addition to having a proper size, a good target market for e-business should be easily reachable online. This means that you must be able to locate the specific web sites, online forums, mailing lists, newsgroups and other forms of Internet communities where your target audience hangs out. You'll want to advertise in those places, because you need pre-qualified visitors on your web site. From this point of view, for example, "Beatles fans" are a better audience than "30 to 40 years old men with a belly", because Beatles fans are easier to locate on the Internet.

Targeting a small niche also has another advantage: it is easier to become a recognized expert in a small field. For example, it is hard or impossible to know everything about all cars, but it is easier to learn everything your customers need to know about recent models of one manufacturer of your choice. You can eventually become one of the world's leading experts in your field, and that will give you the respect and trust of your customers.

Whatever the size of your target market, you must learn the wishes and needs of your audience, and find a great product that would solve some of their problems, or otherwise give them what they want. If the product you sell to your customers is really great, they will trust you better the next time, and will be more likely to buy from you again. This way, you can constantly grow your business not only by attracting new customers, but also by offering new products to the existing ones.

What should I sell on the Internet?

You can sell virtually anything on the Internet, but there are several things that tend to sell the best. The first such thing is information. That's easy to explain. People usually search for information when they browse the Internet. The information is what they need at that time, so it is the product they are most likely to buy. Another advantage of information products is that they are fairly easy to create.

The next best product to sell on the Internet is computer software. This is also self-explanatory: many Internet users are computer owners, and they often need some software to solve their problems. It is logical for them to look for this software in the Internet, and buy it there if available. Software may not be an appropriate product for most e-business startups, as it requires special technical skills and significant resources to produce and support.

Information products and software have one more huge advantage for startups. They can be distributed electronically. This means faster delivery time for your customer, easier sales process and smaller expenses for you.

Of course, you can sell many other things. A good idea would be to sell your services on the Internet (translation services, or business consulting, for example). Or, you can use the Internet as a new media for your previous offline (brick-and-mortar) business. In this case you can either only promote your products on the Internet, or automate the sales process and accept online payments.

Proudly bought to you by:Helen Salamakha and Val Danilchuk,
Niche Marketing Research Center

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