Starting an online business
Starting an online business
This post is about starting an online business – it is not about how to build a website, or start a blog!
An important first question is……why would anyone consider setting up an online business, or any type of business for that matter?
There is a whole range of reasons why people do this, for example, they:
- Are already in a traditional business, but realise that in order to be competitive there is a need to take their business online as well
- Want an alternative to a 9 to 5 job
- Would prefer, or need to work from home
- Don’t have a job at present, but do not want to go back to the 9 to 5 type of existence
- Realise that the digital economy presents an unprecedented opportunity for the ‘little guy’ to successfully compete for business with the large corporations
- Have a disability which prevents them from working in a more traditional job
Therefore to assist people who want to do this, whatever their reasons for doing so, I am sharing with you in this first of several posts what I know, and have learned about starting an online business.
Different perspectives for doing this?
Some people will decide to develop and engage in doing business online because they are genuinely interested in this type of thing. It relates to an area of life or career interest.
Or, they realise that the online world provided the best means for them to reach and provide services to their clients. Yet others, will decide that developing this kind of business is a means to an end – it doesn’t as such represent an end in itself.
Let me explain.
For many people, their online business is a vehicle or the means that enables them to create lifestyle choices. Properly set up, doing business online business can be done with minimal time commitment. With the right strategies, it is also possible to set up an online business that has a residual or passive income stream.
When you have passive,or residual income you have lifestyle choices. Why, because you have both time freedom (the business is fully automated) and you have financial freedom (your income is on auto pilot).
Online business – the three essentials
I’m not going to get into the whole web site or blog development thing here – at a later stage however I will share with you what I know.
There is plenty of self help information available on the internet to assist you with this kind of thing though, or you can outsource this work to someone else and get your website or blog built for you.
Having a website is literally the tip of the iceberg when it comes to starting an online business.
In my opinion, and what I’ve learned through experience is that that a critical first step is to have clarity about your overall business strategy.
The strategy that I’m utilising involves 3 elements – all of which are need to be included if your online business is to be successful. These are:
- An integrated or linked suite of products and services that are in demand that you can offer for sale
- A list building system that is automated and which you use to progressively build a list of buyers who are ‘qualified’. You then can market to the people on your list by delivering value to them
- Having a system that closes your sales
In future posts I’ll discuss each of these three elements in much more detail, but following is a very brief description of the part each will play in your business.
An integrated suite of products
The simplest way to explain this is as follows:
A customer is attracted to your website by some sort of offer you have made to them, probably through some form of advertising, or email marketing, or some other means.
That offer might usually be some free information in the form of an e-book, an information video, a free course or webinar – something that the customer considers to be of real value.
In reality though this is a strategy whereby you progressively introduce your customer to a basket of other closely related, or integrated products and services for which that customer will be prepared to pay.
In the online world, the marketing which results in this initial interaction is sometimes called creating a “Lead Magnet”.
What happens next is where the planning you have put into your business strategy comes into play. Your plan ideally is how you want to lead the customer into what is called a ‘sales funnel’.
The Sales Funnel
As explained above the customer first interacts with your initial offer something that costs, no, or very little money. Then, using an automated email service, they are presented with another offer, a a bundle of offers highly relevant to their needs.
Think of this as providing an extra bit of value for them in the solution they are seeking to their problem. And, after that next purchase ……the process repeats. Even more value is offered, but at a slightly higher price.
In summary, the idea is to offer customers not just one product or service, but a series of them in an increasing value chain.
An automated list building system
The initial marketing strategy is to attract the attention/interest of customers with a lead magnet (see adjacent column on the left).
You set up your business system so that the customer can only access your initial (free) lead magnet offer by providing you with a valid email address.
The idea is that you use an automated system for storing these email contact details – personally I use Aweber, but there are others e.g. Mail Chimp.
As my mentors explain, and as many astute business owners know, when you have an list of customer email addresses you have the ability to continue to market to them – whenever you like.
The sales funnel and your automated list
You’ve probably experienced how this works for yourself if you have ever signed up for some type of online offer.
After you have supplied your email address you might immediately receive another email from the organisation with another, related product or service offer.
Sometimes the email offer you receive might be something like “An addition to our free gift, for just a few dollars more you get………”
The automated list represents an incredible asset to your business – purely because of this ability to continue to market additional products and services to them.
A system to close sales
This is where the effort to develop a list of email addresses pays off. And in the online world email automation is heavily used to help close the sale (i.e. get the customer to take their credit card out and pay you!).
The system you use, the messages and product/service offers you build in your campaign to close sales will need to move the customer from:
Step 1 – being suspicious, sceptical, wary about being sold something – at their first point of contact
Step 2 – they have decided to opt in to your list. This means there is a small element of trust being developed, so you offer them a product or service. This usually has some sort of incentive to ‘do it now”.
Step 3 – they have now moved from being a ‘prospect’ in Step 2 to being your customer. Most automated list building systems enable you to move your clients onto a new list which consists entirely of customers. You can use this list to now make additional offers that provide additional real value to the customer.
Step 4 – with repeat purchase and ongoing contact with your customer list you begin to develop loyal fans. Because of the value, and quality of products and services you’ve provided they now know, like and trust you. You can continue to expand your sales funnel and over time make other related offer to this loyal customer fan base.
No more hard selling face to face!
This is definitely one of the more attractive benefits of having an online marketing system.
Think about it – no more cold telephone or face to face sales calls! Unless of course you really like that stuff.
Doing business online means that there are many other much more pleasurable ways to interact with your clients.
If you’re doing your marketing in the right way it will usually mean that you will be interacting with people who want to interact with you – instead of you invading their space, not knowing if you’ll be welcomed, or not.
What if you don’t have a product or service? Try affiliate marketing
This is absolutely no barrier to setting up a profitable online business for yourself.
Many of my colleagues in the SFM community have no products of their own. Instead their whole business strategy, and the income they receive is entirely built around being an affiliate of SFM – you can learn more about how they do this by clicking here.
How does affiliate marketing work?
The simple answer is that you set up your online business to promote other people’s products or services.
When you successfully refer clients to the organisation you are representing, you earn a commission on the sale of products the customer purchases.
In some instances, there are organisations that you can affiliate with who, in addition to paying commissions, will also pay residual income from the products and services you have sold on their behalf. SFM is one such organisation – and it’s one of the reasons I decided to operate as their partner and affiliate.
There are many places where you can source affiliate opportunities. Do a search for affiliate marketing businesses. A well known affiliate marketplace is Clickbank.
Which target market – high end vs low end?
When you become fully engaged in doing business online you will quickly realise that developing online marketing skills is an absolutely critical skill to develop.
Beyond that, you will have other decisions to make in terms of your overall strategy – namely will you market high-end or low-end of market products?
A natural inclination would be to conclude that the money is in marketing to the low-end of the market – that’s where the bulk of the people are. Right? After all, the bulk of the world’s population fit into the poor and middle classes.
However, when you start marketing online you will quickly realise that it takes just as much effort to market a high-end product as it does for a low-end, low value product. After all, people with big incomes shop and seek information online too!
If you do decide to specialise in online affiliate marketing you should know that there is the opportunity to earn much, much higher commissions, and generous residual income streams when you are marketing at the top end.
Many people think that starting and operating an online business simply involves putting up either a website, or starting a blog, and that the income will flow.
Nothing could be further from the truth.
Regardless of your reasons for wanting an online business, I trust this post will encourage you to think about and plan your strategy…..before you get started.
Look for mentors and coaches – there are some terrific ones out there. They are already doing what you are thinking about doing. So, learn from them. It will save you time, money and stress in the long run.
And finally – your online business might be an end in itself. Yet for others, it can be a means to an end.
All said and done, there a many compelling reasons for starting an online business, and perhaps doing something like affiliate marketing- not the least being that you are taking steps to create your own independence in a world where traditional employment opportunities are disappearing around us.