Step 1 - Fundamentals of Starting Your Home-Based Internet Business
Starting an internet business is much like starting any other type of business. There are several steps that need to precede taken before you even start about thinking 'Internet'.
These are the topics we'll be looking at as part of the Fundamentals:
Fundamentals 101 - What type of internet business are you going to set up
Fundamentals 102 - Research the viability
Fundamentals 103 - Writing a business plan
1. What Type of Internet Business are you going to establish
This is a fundamental question which you should ponder for some time, because once you choose what your business is going to be about, it will take hundreds, even thousands of hours to set up - and that's before you make a cent.
The internet as a platform for setting up a business is not dissimilar to that of an off-line or brick-and-mortar business. Most people who start an online-business however, usually still have a 'day job' and are not going to be able to spend the typical 40 hour (plus) per week building their own home-based internet business. This is one reason for why your business idea has to be exiting, motivating and inspiring to you.
If you're planning to set up a home-based internet business just to make money, it will more than likely fail. Why? because the motivation, inspiration and excitement that will keep you working into the early hours of the morning are simply not there and at the end of the day you won't have the stamina it takes to break through the challenges - and believe me, there will be challenges.
So, let's spend a moment on thinking about what will become your business. Deciding on what your business is going to be about is key. What is it that you love doing? What hobbies that could be a business do you enjoy engaging in? Are you an expert on a particular topic such as 16th Century European painters... Or are you an engineer that works on developing sustainable green technology? What ever it is, you need to find a topic that you are very interested in and have information, a service or product(s) that you can offer.
Let's say in your spare time you make wooden toys for small children. You've developed an assortment of toys and absolutely love to make nice things from wood.
This is a great place to start. You have a product, you have an interest in making things for children that then get a lot of fun and joy from what you've made and you get a real kick out of seeing the kids pick up one of your wooden toys for the first time.
This is the beginning of an idea for an internet business.
If Accountancy is your 'love-child' then you may have a special area where you have gained exceptional insight and information. An on-line business can help you get information out to people that would otherwise not have the means of getting your specialised knowledge. You could run on-line courses in this specialised area or promote workshops, etc.
The key is you need to identify something that you're very good at, enjoy doing, and that if you chose to turn it into a business would keep you going even thought times may get tough occasionally.
2. Research Your Potential Business
Now that you've decided what your business is going to be about, it's time to find out if there is a demand for what you're planing on offering.
This research can take several forms: Internet-based, Community-based, etc., however, you'll need to find out if what you are planing to offer for sale is actually something that people are willing to buy.
In addition, you need to find out if the demand is not already met and there is a place for you that allows you to make sufficient amounts of money to support your business, it's running costs and has the potential to replace or substantially improve your current income.
So, how do you go about this?
Firstly, depending on what it is your planning on doing, you may already have a good idea of whether or not people are looking for what you'll be offering. For example, if you planning to turn your hobby of making wooden toys into a business, you may already know that there is a big demand for such toys. Maybe you're asked to make toys by your friends who have children. Or, you may feel that there are a lot of folks out there that would buy wooden toys for their kids if only they were available.
There is a growing market for eco-friendly, natural products that do not contaminate the environment and still perform the function for which they were intended. This is one of the big growing markets out there.
Quick ways to test your business idea
Use search engines such as Google, MSN, Yahoo to see if 'wooden toys' are currently being offered.
As you can clearly see, there are currently 29.7 million pages that contain the word wooden toys (you can see that on the right-hand side in the pale-blue area above the search results). ... Results 1 -10 of about 29,700,00 for Wooden toys. (0.13 seconds). Don't let this put you off though. We'll cover this issue in much more detail later.
For the moment, this tells you that you won't be the only one offering wooden toys and that you do have at least some competitors.
Another way to find out if your business has potential is to talk to the small business office. In Australia, there is the Small Business Advisory Service that is provided free of charge by the government to help small businesses to set up and get established without falling off the wagon before they've even got started. Check your Government pages for contact details - if you happen to be in Australia, NSW, start here: <http://www.smallbiz.nsw.gov.au/>. In Victoria: <http://www.business.vic.gov.au/BUSVIC/HOMEPAGE//> or just use the phrase "Small Business Advisory Service" and add the name of your State to the phrase, for example: "Small Business Advisory Service +NSW" exactly as it is typed here, not including the quotation marks, but including the '+' sign.
Talk to shop keepers that sell toys and ask them if they stock wooden toys and if not whether they would be interested in stocking yours. Similarly, talk to the parents of children that you're kids are friends with. You get the point.
3. Writing A Business Plan
Let's face it, there are hundreds if not thousands of small businesses that operate without having a clear business plan. But one thing is certain - you are more likely to fail without a business plan than if you've taken the time to plan a running track for your business. I would go as far as saying that in today's business environments not having at least a basic plan for your business, you're facing a steep up-hill battle and are making it unnecessarily difficult for yourself to succeed.
Below are some ideas to start your plan with. I have not included all the possible questions/heading that could be included, but depending on the complexity of your business idea you will need to answer additional questions. You can always consult a business advisor or accountant to help you in this process.
Probably one of the simplest ways to start is to answer questions to:
- What am I going to do?
- Where am I going to do it?
- How am I going to do it?
- What do I need in order to do it?
- What will I need to generate in income in order to make a profit?
- How long is it likely to take before my business will start to break even and how long before it will start to make a profit?
In addition to the questions above, you may also want to consider some of the risks and ask yourself the following:
- How much money will I have to invest?
- How do I raise this money?
- What would happen if the whole thing falls apart and I lose the money I've invested?
- Is there some way I can insure against this possibility?
Setting Milestones is another part of your business plan that you should consider. Ask yourself some of the following questions:
- By what time will I have finished my research into the viability of my potential business?
- How long will it take to create a website where I will have my business on show to the world?
- By what date do I want to have my home-office set up and ready to start running my business from?
- When will I get my business name registered and how do I do this?
- Do I need insurance and if so, where will I go to get the right insurance?
- At what stage will I need to make sure the insurance is in place?
You may be able to think of other questions that I've not raised above and if so, that's good. The more detail you can put into your plan the better - But don't write War and Peace. You business plan must be first and foremost USER FRIENDLY. It is not a document that's set in concrete, rather it is a work-in-progress.
Just remember, 'a ship without a rudder is doomed to be directed by the shifting winds'. If you need some help now to get started, visit this site: Guide to Business Planning, or type "how to write a business plan" into Google.
Lastly, once you've put together you business plan it's time to take ACTION and have FUN.
GO TO STEP 2 -> Starting Your Home-Based Internet Business.