Becoming a successful entrepreneur in the online world is no different than becoming a successful entrepreneur in the brick-and-mortar world. Both tasks require vision, determination, and hard work.
The online world of the web offers many exciting opportunities for entrepreneurship because it is fresh, new, and exciting. The cutting edge of development has always been the most fertile ground for growing a new enterprise. In the 1800’s, the new frontier was the American west and many fortunes were made there. In the 2000’s, the new frontier is the web, where many fortunes have yet to be made.
Jeff Bezos of Amazon.com is worth 4.85 billion dollars. Pierre Omidyar of eBay is worth just over seven billion dollars. David Filo and Jerry Yang of Yahoo are both billionaires. These men made fortunes on the web, and so can you.
The path to becoming a successful online entrepreneur has changed in the last few years. The over-optimism which characterized the late ’90s and ultimately led to the subsequent crash in the technology sector has matured into a cautious and reasonable optimism grounded in traditional business values.
The party is over; it’s time to get to work.
What Are You Going to Sell?
The #1 thing you need to succeed in business is the customer. Whether you have one customer, fifty customers, or millions of customers, it is critical to remember that customers are the foundation of any business. Without customers, you don’t have a business; you have a hobby.
Going into an online business, people usually either know what they want to sell or know how they want to sell it. If the online business is an extension of a brick-and-mortar business, the entrepreneur knows what he or she has to sell and is looking for a new channel for their good and services. If the entrepreneur is looking to start a new business online, they may not yet know what product or service will offer the best opportunities for success.
Product or Service
Every business sells either products or services, a few businesses sell both. Products are easier to sell online because they can be more easily commoditized. People have become comfortable buying known commodities online. Services which are sold online are sometimes delivered online and sometimes delivered offline.
Selling Services Online
If you choose to sell services, the next decision to consider is how the services you sell will be provided. You can choose to:
- Sell your own services
- Sell the services of others
- Sell an automated service
Selling Your Own Services Online
Each of us has specific talents, abilities, and skills which can be useful to other people. These things which we have can be offered to others over the web. Perhaps you are a lawyer, a web designer, or a painter. It should be the easiest thing in the world to create a web page to tell the world about who you are and what you can do for them.
The key to success in selling your own services over the web is to focus on the needs of your customer. For every sentence you write about yourself online, write an entire page about what you can do for your customers.
Selling the Services of Others
Selling the services of others allows us to leverage a larger workforce, and ultimately to build revenue more quickly.
Perhaps you run a lawn-care business where you sell monthly lawn-care packages to home-owners. Your lawn-care staff may be employees, or they may be independent subcontractors who do business with you at pre-negotiated rates. In fact, you may not be in the lawn-care business at all, you may simply be in the business of being paid for generating referrals to existing lawn care firms.
Selling Automated Online Services
Selling automated online services presents a very lucrative business proposition, because it represents a potential revenue stream with very low maintenance costs. The trade-off is often in the form of considerable up-front development cost.
If you have the right idea, and the determination to follow it through to a successful conclusion, there can be no better business opportunity than selling an automated online service.
The first step, of course, is to determine what people want and what people are willing to pay for. Will people pay $9.95 for an online personality test? Will they pay $19.95 for an online personal wardrobe analysis? What would someone pay for a personalized online horoscope? How about an automated resume writing tool?
Selling Products Online
If you choose to sell products, you are not limited to selling products which you manufacture. If you are already in the manufacturing business, that is a significant advantage and the web is an excellent sales outlet for many products.
Greater opportunities exist for the rest of us by working with the distribution channel. We may buy products from manufacturers and sell then over the web, or we may buy products from wholesale distributors and sell them over the web.
We may inventory our products and oversee their shipment to customers, or we may send a request to have the products drop-shipped from our suppliers to our customers. We may never even see the products we sell.
Setting up IT
Information technology is daunting to many entrepreneurs. Each little sub-field of IT has its own culture and terminology. It is difficult for the novice to understand all of the jargon and to determine truth from hype.
You will not be successful if you try to separate yourself completely from the technology, but you will also not be successful if you immerse yourself in it. You must understand IT decisions from a business level in the same way they you understand decisions which your business makes in terms of setting prices or acquiring real estate.
The most obvious need for your new online business will be a company web site. This will introduce you to the professionals known as web designers. If your business sells more than a few products online, you will also have to work with database administrators. If you want to sell an automated service online, you will find yourself working with software architects and software developers.
From there you will learn about shared and dedicated hosting and about the plethora of services (and pricing) available to you as a hosting customer.
The key in these communications is that each of these professionals owes you, as their customer a clear explanation of the business value which they are providing for the money which you are paying them. This may be an unfamiliar concept to many techies who grew up in the public school system. Remember, there are always more vendors for a willing customer.
In many ways, IT is the easiest challenge you will face, because so many entrepreneurs have trodden the path before you. An entire industry exists to market IT services to entrepreneurs. You only have to decide what to buy.
Selling Online – Successfully
Once your have negotiated with your suppliers and you have you distribution system arranged — now comes the difficult part. Now you must bridge the gap between your business and your customers.
Most Internet traffic is currently brokered by search engines, such as Google, Yahoo, and MSN. To do well in business on the Internet, you must do well in the search engines.
This means appearing very early in the search results for the key words or phrases your potential customers will use to shop for your good or services.
Very few potential customers will look for you by name. You must determine the phrases which potential customers will type into the search engines and make sure that you rank well in the result listings for those phrases. Product types or names are common search phrases, such as “sleeping bags” or “bumper stickers.” Key phrases for services often include a geographic component, such as “real estate kansas city” or “house painter colorado springs.”
Once your key phrases are defined, you must make certain that your company’s web presence is optimized for those phrases. This consist of two sets of tasks: on-site optimization and off-site optimization.
On-site optimization is designing your web site to be focused on those key phrases. This is where your web site designer will work with a professional in the field of Search Engine Optimization (SEO).
Off-site optimization consists of networking with others in your field to make sure they know about your web site — and that they link to your web site. The top search engines use the number of links to a web site as one of the criteria for determining which web sites to rank highly in the search results. A SEO specialist can help you in this task, but no one will know your industry as well as you.
Search Engine Optimization (SEO) is critical to the success of an online business. The difference between ranking third and thirtieth for your key phrase is significant revenue for your business.
Your target keywords can also be used for Pay Per Click (PPC) advertising using systems like Google AdWords. Due to the extremely competitive nature of the AdWords bidding process, it is very easy to spend more on AdWords than you earn from AdWords referrals.
The eBay Alternative
The tasks involved in setting up a web site and driving traffic towards it can be time consuming and resource intensive for a small business. The time delay imposed by website development and search engine marketing can require many months to begin to deliver ROI.
Many web entrepreneurs use eBay and other online auction houses to short-cut this process and begin selling to online customers almost immediately.
On eBay, you create auctions for the products you are selling and potential buyers bid to determine what they will pay. You are able to set minimum prices to ensure that you will not sell products at prices below your necessary profit margin. You are also able to set up dutch auctions where you are able to sell large quantities of the same item.
The options involved in becoming a successful entrepreneur on the web are extensive. Picking the right path for you own journey is your first step on the road to online success.