Starting your own online business Stage 1

[Chatmaster]

Planned content for this tutorial will include:

• What makes the Internet such a good platform for online business
• The laws of Internet Entrepreneurship
• Planning your online business
• Finding your niche
• Compiling a marketing plan for Internet business
• Conversion Factors
• Designing a website
• Acquisition Strategies
• Traffic conversion strategies
• Retention Strategies
• Maintenance Strategies
• Multiplying your income streams

Stage 1

What makes the Internet such a good platform for online business

This is a topic that a complete set of books can be written about, but I am going to do this as simple as possible. It is however very important as it explains to any person starting out simple rules that do not apply to the Internet game.

Low risk = High return

The Internet is a complete contradiction to what you will hear many economists and business leaders tell you. The generalization that High Risk equals high return does NOT apply to the Internet. Although never said, this is one of the reasons the dotcom bubble burst. Anyway lets look at the reasons the Internet is an ideal platform for any entrepreneur.

Less financial risks

If you start out a business in a landbased environment you often need money and in many cases you need lots of it. You need to purchase stock, in some cases you might even need to rent office or shop space. In most cases people would then go to a bank or financial institution to borrow the money.

One thing that financial institutions do is they ask you to hand in a business plan. You can go to most of their websites and even download a template of a business plan. This business plan is a simple thumb suck of how your dreams would become a reality, but to the bank it is a document that proofs to them that you have done some planning before you start your business. Now I need to highlight something very important here.

A business plan as they see it, is in 95% of the cases a meaningless document that simply put your dreams down on paper. They essentially don’t care that much about it because their risks are mainly covered by the security you provide them with for the loan. This means that no matter what the outcome is of your business they still have your assets to sell if they do not get their money back.

Do not make yourself believe for one second that they carry large risks, essentially in this case you as the borrower is the one that carries the risk of losing your home, property and assets not the bank or financial institution.

How does this compare to the Internet. The Internet requires very little start-up costs. You do not need to have any stock, nor do you need any office or furniture or anything that are expensive. In many cases your risks involves things that you already pay for, internet and a computer. The only additional money that you need to part with is at most about $10 a month for hosting and a domain.

Do you need to resign to start your own Internet business? No, you need to dedicate at least an hour or 2 each day and you are able to manage your own time as you go on. Is it wise to resign? It is never wise to increase risk, so the secret of internet entrepreneurship is to lower your risks as far as possible, keep your job!

Marketing

In terms of marketing, the land based environment has always required lots of money in order to get your business exposure. Advertising avenues like printed media, radio, television and other like advertising boards and flyers can cost a lot of money and results are never guaranteed. This is increased risk that doesn’t form part of the Internet business.

If you look at the biggest advertising platform of all, television you are looking at the biggest TV station in South Africa which is SABC 1. Then you look at reaching about 18 million people on a weekly basis. The actual of this figure is highly debatable though as it is an estimate and cannot be counted. A further challenge that you will have is the demographics of the viewers of this channel. Although they will make certain claims about the demographics it is highly debatable on how accurate this is. Costs to advertise will run in their millions as you would look at about R100k per advert and then it excludes the cost of producing the advert.

The Internet however has accurate statistics. It is very cheap and affordable marketing avenues. It has the power to explode your business, and a quarter of the world’s population has access to you. All you need to do is create the roads to your business and the traffic will start coming.

Essentially the entire idea of Stage 1 is to make you understand that the Internet offers massive value as a platform, but very little risk. The little risk is however very important to remember throughout every decision you make in future.