How to Start the Right Online Business: A 5 Step Deciding Process

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In this post, Sandip walks us through one simple way to approach starting the right online business that works for you. The post is a nice reminder of the basic steps that you must think through when launching an online business.

I like the fact that he mentions that not all business models are equal, which I agree with. I also strongly agree with the fact that you should play to your strengths and preferences when identifying the right type of online business to start.

And to reinforce what I have always said, this post emphasizes that start up costs are next to nothing when starting an online business, which is one of the biggest reasons why I am an advocate of selecting a web based business model when starting a side business. I hope you enjoy the post . . .

If you want to start an online business, a major factor that will determine your success is the type of online business you start and how that fits in with your strengths and weaknesses.

Getting this right will save you time, money and that precious motivation that’s required to build a business. This article will walk you through how to create an online business that aligns with your inherent strengths, maximizing the chances of success.

There are two routes that usually lead someone to create an Internet based business.

The first is when someone stumbles across a gap in the market. Let’s say John is a budding money-saver. The tire blows on his car and three garages give him three different prices for the same tire. Fed up, he hires a small development team that creates a website which compares tire prices all over the US.

In this example, John turns his frustration into positive action – a beautiful thing. When John decides to monetize the site, he can through referral fees, ads and more. This type of business has the potential for great upsideand it’s something that John will enjoy working on as it’s fueled by passion. It‘s not motivated by greed or by following the latest hot trend.

The second route is when you know you want an online business but you don’t know what kind of business to start. You may have been enticed by stories of a four-hour workweek and the ‘spammy’ term that is thrown around of “making money in your sleep”. This can be a risky path as unlike route one, you don’t quite know where to start and your motivations may not be based on a solid foundation.

But don’t worry – let’s go through five steps that will minimize the risk of failure and help start the right online business for you:

1) Learn about the various ways that you can make money online. One of the more popular include creating useful content and monetizing it through Google AdSense and or affiliate offers.

You could also create a site based on technology like John’s tire website example given above.

If you prefer dealing with physical goods, you could sell through a marketplace such as eBay, Amazon or your own niche store.

Alternatively, how about you create the marketplace? Bring buyers and sellers of a particular good or service together and charge listing fees or a commission on each sale.

The opportunities are almost endless.

2) Once you understand the various ways you can make money online, the next step is applying that monetization model to a type of business that interests you.

Ask yourself the question – out of all the various online business models you’ve seen, what gets you really excited? There’s no right or wrong answer here, it simply depends on your preferences. Remember, you’ll be focusing on your online business for a long time to come so it needs to be built on true passion.

Would you love to hire a team of developers to turn your iPhone app dream into a reality? Or does the thought of bug testing make you queasy?

Are you buzzing about the thought of writing insightful, 1000 word posts every week for your new blog? Or can you already feel writer’s block creeping in?

Don’t base your decision on potential profit – base it on what really interests you and what you think you can create that will make your users say ‘WOW’.

I believe that if you create something awesome, the money will come.

Many people never pass this stage as analysis paralysis or the fear of failure holds them back. Don’t be one of ‘them’. Remember, you miss 100% of the shots you don’t take. Select a business and go with it.

3) After following the first two steps, you should have an online business idea ready. Now it’s time to thoroughly analyze the competition. The essential element is figuring out what makes your website unique.

Adding value and improving on the competition will give people a reason to choose you. It’ll make it easier to get new customers and the word will spread. If you’re just another website doing the same thing as others, it’s going to be an uphill struggle.

4) Well done for reaching stage four – the refinement stage.

Start by refining your idea based on feedback from friends, family and even acquaintances. You won’t be able to take all feedback on board and you’ll need to judge what to act upon.

Next, and most importantly, speak to your target audience. If you’re creating a blog for mothers-to-be, speak to them about what they’d like more info on. If you’re creating a new iPhone case, speak to iPhone owners.

5) The final step in starting the right online business for you is the actual implementation. Depending on the type of business you want to set up, you might be able to tackle this yourself, as would be the case when launching a blog. Or you may need to hire developers (don’t fret, freelance sites make this easy).

The point to remember here is to not cut corners. Build something that looks and works great!

By following these steps, you’ll increase the chances of being able to create a profitable and lasting online business that you enjoy working on.

The beautiful thing about online businesses is that the startup costs are often relatively low in comparison to starting a physical business. Yet, online businesses still have the ability to help you generate a significant active or passive monthly income.

So, what process do you follow when creating an online business?

Sandip Singh is the founder of crowdfunding website Go Get Funding which has helped people from all over the world raise money for what matters to them. He is also a stock market investor and martial arts instructor.

5 Responses to “How to Start the Right Online Business: A 5 Step Deciding Process”

1. Thomas @ Mobile App Tycoon says:

   September 4, 2012 at 4:37 pm

   The great thing about coming up with business ideas is that there really is no “right” way to do it. This is one way (and a good way too) however I prefer to do it a little bit differently. I start with a problem and work from there – how can I solve this problem? Is there already a solution? Can I make the solution better? etc…

   Thomas

   Reply
   • Sunil says:

     September 6, 2012 at 2:23 pm

     with your approach one doesn’t really need to be an “expert” at the onset. I have seen many succeed with this approach.

     Reply
2. Theodore.N says:

   September 5, 2012 at 10:04 am

   Yea i agree with Thomas, there is no right or wrong way to go about it, the main thing is to know what you want and then plan on how to achieve it. Just find out what works for you and stick to it because sometimes what works for someone else may not work for you.

   Thanks.

   Reply
3. Bhavesh says:

   September 7, 2012 at 9:29 pm

   it really a great tips for Start the Right Online Business i will implement all the point, thanks for sharing …..!!!

   Reply
   • Sunil says:

     September 9, 2012 at 9:49 am

     welcome to the blog Bhavesh

     Reply