Simple online searches reveal a plethora of opportunities hyping that they are businesses, but most are not businesses at all. They are variously disguised sales schemes offering commissions. However, the lure of independence and income, wrapped with the promise that an individual will become a “business owner” confuses many would-be entrepreneurs.
Most of these opportunities lack appeal for experienced owners of traditional brick-and-mortar and service businesses. I am one of those entrepreneurs, having owned several regular-old-businesses (furniture stores) before opting to go “Internet” and leave the rents, inventory and employees behind.
It didn’t take long to see that actual business opportunities online are pretty slim. The most obvious Internet opportunities left me cold. The idea of working in sales as an affiliate had some interest, until I discovered the tiny profit margins involved after deducting advertising expenses.
Sometimes the expense was simply the involvement of hours, days and weeks of work to make a tiny amount of money by referring members to a site. Other times, when a few hundred dollars of startup money was involved, I discovered an old-fashioned network marketing company lurking behind it. Those “Businesses” might appeal to a neophyte afraid of commitment and having low expectations. However, they are not fulfilling to someone who expects their business to support houses, cars and family.
So, the question is, are you really looking for a business, or simply a scheme to make some spare cash?
If you wish to have a business, then you most likely know that businesses require startup capital, risk, operating capital, marketing, advertising and a location to interact with customers.
On the Internet, your business location is most likely your web site. If you’re thinking that’s all you need, though, consider that without customers, you will have no sales. It is a misunderstood fact that on the Internet there is no good “Location” for a business. There’s no busy street corner, no affluent town. Each business owner must use marketing and advertising to draw customers.
The downfall of most Internet businesses is not lack of a good product, or having a sub-standard web site. If the business is well capitalized, and has not blown their entire budget on web design (that’s another story completely) their ruin is simply a lack of traffic due to ineffective marketing and advertising.
Very few Internet business opportunities stress marketing more than they stress their products, but I believe that they should. One way is to have a turnkey marketing system, where the owner can pay for all services. Some franchises offer that. (Consider national fast-food restaurants who all benefit from the same huge media campaigns.) Another way is to provide training so that each owner/operator can control their own ads and marketing, either by doing it themselves or by outsourcing.
Now, given the expense of advertising and outsourcing, anyone considering starting an online business should keep an eye on their bottom line. It seems obvious, but if your profit on a sale is $50, you shouldn’t spend more than $49.99 to get that sale. So, entrepreneurs must weigh their return on investment very carefully before diving into any new venture.
The other consideration is recouping your startup costs. In traditional businesses, it typically can take years before expecting to see a profit. Internet business startup costs usually involve heavy web site design fees, and then heavy marketing and advertising budgets. If you are a “bootstrap” entrepreneur, those costs can be minimized by learning and implementing many skills, and keeping outsourcing expenses to a minimum, but there is still expense involved.
So consider what you really want when looking to start an Internet business. You will need a web site, a marketing system and high-profit products. But most of all, you will need training on how to operate your business online. There are very few packages available which provide all of that for you, but they do exist.