Starting an online business can be one of the best small business ideas
If you came into this website looking for small business ideas in general, you might wonder why I only talk about internet or online businesses here. It's not that traditional brick-and-mortar businesses are dead -- far from it. Those can be successful with enough work put in.
The same is true of internet businesses -- effort is required to make money too. But for people who want to start a business from home, like work-at-home mums or retirees or those wanting a side income, online businesses carry convincing advantages that make them among the best home based businesses to build. Such as:
Low Cost, Low Risk: if you have a very limited budget, building a business online is the way to go. You can put up and maintain your own website for as little as $9 a month, on the following basis:
Domain name registration: about $10 a year Website hosting: ranges from $8 to $25 a month
Depending on the business model you adopt, there might be other costs, such as for advertising or tools to help your business. But you can decide to buy those or not. Typically, a couple of hundred dollars will get you started. That's cheaper than for most other small business ideas.
It's cheaper to run too. You don't need to rent space or equipment, nor employ people unless you grow big. Personally I love the fact that I can run my websites from one single small notebook, AND that I can do it from my bedroom or a Starbucks cafe. Neat!
Global Reach: you are not limited to your neighbourhood in your waking hours. You work where and when you want to, but your online business reaches out to a worldwide market, round the clock.
Millions of people around the world shop on the internet for items they can't get locally, or just for sheer convenience. Those numbers are growing as the internet expands.
The internet gives you, a small business located perhaps in some little unknown town, the chance to play globally. It's even better if you sell digital products which are downloadable straight from a website -- in which case it really makes no difference where you are, whether in New York, or the Yukon.
Direct Sales Model: if you have your own product, it's a very good idea to sell it yourself from your website. That way, you cut out middleman costs. Traditionally, retail and distribution make up the bulk of a product selling price.
If you're able to sell it directly yourself, you can cut out much of that cost, make the product cheaper, and still pocket more.
Automation: an internet business can be set up to practically run on autopilot. That's because so many parts of an online business can be automated, such as product presentation, order processing and fulfillment, payment, even following up with customers. There're tools for all that.
Which means that your business can run round the clock, without needing to employ people, or you being tied to mundane operations. This alone makes it one of the best home based businesses there is.
An online business can be started as a past-time while keeping your day job. No face to face selling required either! (A lot of people hate that -- myself, for one.)
But do bear in mind that the initial set up will take time, and you do need to spend a few hours each week to maintain it subsequently. No business will ever run itself completely without going downhill.
Multiple Income Streams: arising from the above, the fact that you can set up a business to run mostly by itself, means you are freed to set up more of such businesses, or to explore other online small business ideas.
Which means you don't rely on just one income stream (in case it fails suddenly), AND you can get more money. Some of the more established internet marketeers have almost a hundred websites selling different product lines. Imagine the kind of income they get!
Having listed all the good stuff about internet businesses, we should also look at the not-so-good side of it:
It's not for everybody. You do need to have the self-motivation to work at it. It takes time and effort and knowledge and perseverance to make any business profitable. Being online does not exempt a business from those basics.
Unfortunately, the abundance of get-rich-quick schemes around do people a disservice as they lead them to expect instant profits with little effort. So when it doesn't work out that way, people give up.
There's a bright side to this, though -- it weeds out competition!
It's not as easy as many of the internet marketeers make it sound. And it's getting more difficult.
It was easier a few years ago to make money on the internet. But growing competition has made it harder to drive free traffic from search engines, and raised the price of paid traffic from ads.
However, it's easier now than it will be later on. There is still room for new businesses on the internet. If you want to set one up, it's best to stake your claim as soon as possible.
The important thing is not to go into it blind. Many websites set up to make money online fail. Those that succeed do so by equipping themselves to choose well-defined niche markets, position their products, automate processes, and do website promotion. We talk more about it in the rest of this website.
The internet community is growing. More buyers come online each year. According to Forrester Research, U.S. online sales grew from $45 billion in 2000, to $132 billion in 2006. Online spending for Europe was about $70 billion for christmas 2007 alone. The rest of the world is catching up.
A large portion of this more than $18 billion per month goes to the small internet businesses, one-person shows, which make up three quarters of all online businesses. Being small on the internet is not such a handicap as in traditional brick-and-mortar businesses. So long as you deliver, your customer would not know, nor care, whether you operate from your home or a posh downtown office.
