Operating a profitable online business is extremely challenging; yet running an online business provides many benefits over its offline counterpart.
First, and usually what most think of when considering creating an online business, is the ability to work from home on your own computer and on your own time.
Secondly, you have the potential to make more money than if you were working for someone else – who wouldn't like the sound of that, right?
Before venturing into the online entrepreneurial quest game, it's advisable to look at the various online business opportunities available and decide which would fit you best.
Check out the 10 factors to creating a top profitable online business to learn why. While it's plausible that a profitable and legitimate online business can be operated successfully by one individual, the most effective tend to involve a collaboration of skills and input that comes from a team environment (remote or local).
10 Factors for Solopreneurs to Consider When Creating a Profitable Online Business
For Solopreneurs, making money online is an attainable reality, but there are some important factors to consider before diving into an online venture (in no particular order):
1. Will you sell a service?
Unless you have a well-developed skill like writing, web design, graphics design, or some other skill with a creative or artistic flair, you'll have to concentrate on finding or developing a service to sell.
To sell your services, you must first determine whether a willing, paying market exists for these services. Some research is required and looking at similar services potential competitors/partners are currently offering.
A good indication of a solid profitable idea is that there are countless similar services available. This suggests a viable market, but may not always be the case.
You can send a friendly, yet inquisitive, email to a few established service providers in the industry you're considering. This move could give you a stronger insight into the situation.
Investigate existing competition. Check out the quality of their work:
- Can you compete?
- Could you do it better?
- Could you team up?
- What prices are they charging?
- Could you do it cheaper?
- Would you want to do it cheaper?
If you can effectively do either of these you're on your way to building online wealth.
2. Will you sell a product?
More people than ever buy products online, but what you need to consider is whether you want to sell a virtual product or a tangible product.
Just as selling a service, you need to determine if a viable market exists for your product. Look at similar products then decide whether there's room for another player.
Can you bring a new twist to the game? All products will have to be sold through a website, from which your audience can place an order and make a secure payment. If you have the knowledge and necessary skills, you can easily create the website yourself, or simply hire a professional.
A tangible product is something that your consumer can hold in their hands, therefore you need to consider packaging and shipping for your product.
Processing orders are very time consuming and you may have to keep inventory (or at least track of it), which can be very expensive since you'll need to locate storage space.
The alternative is to sell virtual products. These include downloadable videos, e-books, and information products. You'll still need a website with ordering and credit card processing facilities, but you will not need to keep any inventory and it won't take up any space (except on your computer's or server's hard drive). Many successful Internet marketers use this method to maximize their effectiveness.
3. Selling someone else's product
Some of the best online business opportunities are very simple to set up and run and among these is affiliate marketing. You simply find some existing products that are being successfully sold on the Internet, and sign up for their affiliate program.
A straightforward process. You complete an online application form and you're given a reference number, which you can embed into your own marketing links. The host company will also track your sales and pay you commissions.
All you have to do is sell their products. Working with successful affiliates can help ease much stress – especially for beginners.
But be forewarned…
Some people overdose on affiliate programs, trying to sell anything and everything they can sign up for. I advise concentrating on a few related items such as e-books on a similar topic or skill set. When that particular enterprise begins to make money online, start all over again with a set of different products.
With careful consideration and clever marketing, affiliate programs can be the perfect way of making money online. You need to have a vested interest in this type of venture and be active in creating content and driving traffic to the product. One good place to start is Click Bank.
They even have some articles and videos to help newbies get a successful start!
4. Buying into an established business or franchise
If you'd prefer to buy a pre-made business that someone else has jump-started for you, there are many to choose from. Some established and profitable online businesses will gladly sell you a franchise.
This will most likely be a clone of their existing business, but beware! Owning a franchise business online will prove useless unless you have territorial rights. Sounds strange for a web-based business, but this has proven vital to the success of operating franchises.
The problem with online franchises is your limited on what you can sell. You must sign an agreement with the franchisor, that you, the franchisee will only sell their range of products. Check out the various franchise opportunities at Franchise Solutions.
5. Online investment opportunities
Not strictly a business opportunity, but investing in real estate or stocks and shares has become big business in itself. The Internet has opened up all kinds of opportunities for investors, and it's so easy to go online and find stock brokers willing to advise you where to put your hard-earned cash for the maximum return.
The big consideration with investing is to remember that prices can fall just as quickly as they rise. For all the information you need on investments, visit Investor Guide.
6. Finding the right audience
Whichever product or service you decide to offer your audience, you must first establish whether a need exists. If there so, you need to work on an effective strategy to get your product in front of your prospective audience before your competitors do!
Small is big – this has been proven. The small, or niche, market has been responsible for many people being profitable online. Also remember, that a niche market online might be well over a million potential devoted supporters.
Just 5% of a market this size, each buying a product with a $10 profit margin, would return $500,000 in profits.
Some examples of niche markets include: Holidays for singles over 55, fashion and sportswear for children 6-24 months, or easy car maintenance for young teen drivers.
7. Online Auctions
The remarkable success of online auctions, eBay in particular, is groundbreaking. Not only are online auction companies making massive profits, they give individuals an opportunity to sell something to anyone worldwide. From collectibles to fashion accessories to sports equipment to memorabilia, there appears to be a market, although limited, for everything.
The key to success is buying wholesale and sell in volume. When you've gotten to the point of making good money from online auctions, tell folks by writing a book so they can know how you did it. Check out eBay to get started in online auctions, click on wholesale, buy some stock and resell individually back on eBay. (If that's your thing!)
8. Paid Surveys
Some people might discredit clicking boxes alongside questions as a valid business opportunity. However, if you consider it work, and survey companies are willing to pay you, then it can pay to consider this form of business. Almost anyone can do it, doesn't require any specialized knowledge or skill, and it can be done remotely.
The downside of this type of business is, it's tedious and don't count on it making you a fortune. Regardless, it's an ideal part-time opportunity for folks with a few hours to spare or to run alongside a new venture during the ‘quiet' periods. To sign up for online surveys check out Survey Club.
9. Commitment, Enthusiasm, and Self-Discipline
Looking at the various online business opportunities and learning how you should evaluate them is simply part of the larger equation for online profit building. Working for yourself will require actual commitment, enthusiasm and copious amounts of self-discipline. Whichever opportunity or route you consider, all will require a degree of ‘do-ability'.
Be prepared to spend increased time at your computer, particularly in the early months, building your online business and getting your products in front of a prospective audience. If you do it right, an online business can pay you great monetary rewards.
10. Accounting the costs
If you plan on establishing and operating an online business as your main source of income, beware!
The tax folks cometh and they don't play games! In reality, an online business is no different from a bricks and mortar business… in the eyes of the IRS.
If you establish an online business and you're making a full-time income, you NEED to inform the authorities. A business name, although this could be your own name, preferably a business bank account, and you're required to inform the IRS.
Keep records of all your business transactions for accounting purposes and you'll need to set aside a percentage of your profits to cover taxes.
Microsoft's Excel program is perfect for keeping records of this nature (should you not want to deal with accounting software), but don't forget to keep a back-up of your files, just in case. Bottom line: play it straight and keep it legal.
Marketing is important too!
Of all the things you should consider, when planning to start an online business, the most important is undoubtedly marketing. Marketing strategies can make or break a business. You need to find a way to reach your audience, but you don't need to empty your bank account on this either.