Home Based Business Success

Welcome to Part 3 in my series on starting an Internet business. In the previous post I looked at 2 extremely important steps, finding products to sell and driving traffic. Slip up on either of those steps and you'll not be quitting your day job any time soon. Weather you're putting the mop in the bucket one more time, or attending your next board meeting, that's probably not in your plan. To get your out of the daily grind, and into a whole different sort of grind (but a very satisfying and exciting one), here are the next steps to take as you start and grow your Internet business:

Steps to Starting an Internet Business # 7 – Analyze

One of the keys in any business is to determine where your business is coming from, how you can be more effective at marketing to this group of consumers, and what other markets you can tap in order to grow your business. In order to do these things, you'll need to do the next step in the plan; analyze the results of your marketing. There are several key metrics used by most Internet marketers for analytical purposes.

Unique Visitors –
The number of unique visitors to your web site. Not to be confused with hits or page views.

Page Views –
The number of times a page was accessed (not the same thing as 'hits', which is the number of times files were accessed. A single web page can be made up of dozens of different files)

Referral -
The last page looked at by a visitor before they came to your site. Now we're getting somewhere. This is the kind of information you need to go over with a fine toothed comb in order to maximize your marketing efforts. Are there new traffic sources that you were unaware of? Are your current marketing efforts bearing any fruit?

Conversion Rate -
Conversion is the percentage of visitors to one of your websites or web pages that took the desired action. That can be buying something, signing up for your news letter, filling out a lead form, or any other thing that you want them to do. If you'd like them to stand on their head in front of the mirror, and you have such a great sales page that they actually do it, count that as a conversion. The conversion for your site(s) and every sales page, product, or offer within it will be different. In addition, the conversion rate will be usually be different depending on the traffic source. The more information you have regarding the conversion rate for every page, offer, and product on your site, the better you can calculate CPM.

CPM - Cost per 1,000 visitors.
Obviously this is one of the most important metrics when you're analyzing your traffic. If you know the amount of revenue generated by a visitor to your site, you'll know how much you can pay to acquire a new one and still generate a profit. The thing to be aware of is that traffic from different sources will usually generate different CPM figures.

For example, traffic to your sales page from your forum may generate more or less revenue than traffic from PPC advertising, article marketing, or blog posts. This is because different traffic will have different conversion figures and different acquisition costs. The more granularity you can get when determining your CPM, the better, so make sure you know not only where your traffic is coming from.

Location - Where is your traffic coming from?
This is very important, and more important with some types of sites than others. If you have a geographically oriented site such as a local real estate information website, is most of your traffic coming from the area that you're targeting? If not you may have a large number of visitors but relatively few conversions. That can lead you in one of two directions; you can refine your marketing to bring more traffic from the area that you're trying to target, or you can change the scope of your offerings to more effectively convert the traffic you're getting.

Browser / resolution - While this may seem techy and unimportant to many marketers, it's actually very important. You need to be sure that your site is properly displaying in all the browsers that your visitors use, and especially the more popular ones. The same is true with screen resolution. You want your page to be optimized for the more popular resolutions used by your visitors. If you originally made your page to appeal to visitors running 800 x 600 monitors, you're probably losing sales to those running 1,440 x 900, or 1280 x 1024 monitors because some of site's features just won't be displayed correctly. Going forward, keep in mind that most of the new monitors are wide screen in either 1280 x 800, 1440 x 900, 1680 x 1050, or 1920 x 1200 resolutions. Make sure your site displays well in these resolutions so it's ready for the future.

Duration - How long are visitors staying on your site? If you have a site with a 4-page sales letter and the average duration is 30 seconds, the reason your site isn't converting well is that no one's reading your sales letter. You better hire a copywriter and revise the thing, because it's most likely crap. It's the same with any type of site. You can tell an awful lot about how well your site is holding a visitor's interest by how long they stick around.

Average Views - This also called depth, and it's the number of pages a visitor to your site views, or how deep into your site they go, when they are there. If you have a 1 page sales letter site, well, that number is always going to be 1, but it lets you know if visitors are just hitting the page they entered on, then clicking away, or are they seeing more of your content.

There are more analytics, which I'll get to in a future post, but the upshot is that you absolutely need to know as much information about your visitors and customers as possible in order to maximize your marketing effectiveness. There are many packages you can use but I like Sitemeter and Google analytics, both of which are free or have free versions that are very good. Other well regarded analytics used by marketers include Quantcast, Weblog Expert, and Compete. Most web hosting companies also have analytics of some sort you can use. Whichever package you choose, make sure you analyze, so you maximize your site's profits and minimize your efforts.

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Welcome to part 2 of the steps to starting an Internet business. In the first post, I covered the initial 4 steps you’d need to begin your Internet entrepreneurial career. In case you hadn’t thought about it yet, one of the biggest plusses of an Internet business is that if you’re successful you won’t have to fill your gas tanks with $4.50 swill for the drive to work everyday. You’ll be ahead right from the start!

Here are the next steps you’ll need to take on your journey toward Internet business success.

Steps to Starting an Internet Business # 5 – In the previous step you found a niche to market to. In this step you’ll determine exactly what you’ll be marketing to your (if you did your research right) hungry niche. You have a few choices. You can either:

A - Find products you can market as an affiliate. Affiliate marketing for those of you that are just looking into the whole Internet business thing, is when a company will pay you money when someone takes a specific action based upon your referral. They can buy a company’s product or sign up for their service by going through a link in your ad or from your website. You can also generate affiliate revenue by referring qualified leads to a company. How you make affiliate revenue is determined by what the company that pays you is looking for; sales or leads.

B -Develop your own product. For most people in the beginning that means writing software, a script, or an e-book that you can sell via download. As you progress you can also create info products that also incorporate physical media, such as books, pamphlets, CDs, or DVDs. In most cases you’ll be rewarded for the extra effort and expense it takes to create, package and distribute the physical products by being able to command much higher prices for them. The hard costs are not that high, so you will make much higher profits. Be advised that if you create crap, you will quickly get a (well deserved) reputation for creating crap and your customer list will dry up.

C - A 3^rd option to profit from your niche is selling products that are drop shipped. If your research indicates that products in your niche are able to be sold for a nice profit, you may want to fid what’s known as a drop shipper. A drop shipper will take an order from you and ship the product directly to your customer. Many drop shippers will even include a packing list from your company, complete with your logo and address, so as far as your customer’s concerned, their order came from you. The obvious benefit is that you’ll not need to stock or fulfill any product. Keep in mind that you will still need to handle returns.
 
One way you can mitigate that risk is to choose products that are unlikely to break and come in few varieties. This will minimize the chance that a customer gets the wrong item. Items such as consumer electronics definitely break or cause customer confusion. I was in a warehouse a few years back and one of my vendors had taken back pallets of TiVOs because the customers either couldn’t hook them up correctly or weren’t properly informed that the device required a monthly service fee. Trust me, you don’t want to be in this position, it gets expensive in a hurry.

D - A 4^th way you can market to your niche is to just create your website, make it full of good, quality content, and put Adsense or some other contextual ads on it. When people click on these ads you’ll be paid a small amount. Typically this is used as more of an icing on the cake than primary revenue stream, though. You’ll have to generate substantial traffic in the right niche before you can make very much money from this business model. If you are getting that much traffic, you can usually more effectively monetize it through other means, such as affiliate marketing or selling visitors you own product(s).
 

No matter what you determine will be your marketing method of choice for your online business, or if you do as many marketers do and sue a combination of methods, you’ll eventually have to move on to:

Steps to Starting an Internet Business # 6 - Driving traffic
This is obviously a supremely important step, because nothing else matters if no one shows up. You’ve got 2 main choices, pay for your traffic or get it free. Most marketers try to excel in both choices.

Getting traffic free is a combination of getting good search engine results and getting linked to by other sites, e-zines and blogs. The links to your site, known as backlinks, are doubly important because not only do the links drive traffic to your site, but they are one of the most important factors used by search engines (especially Google) when ranking your pages. You can get links through a number of strategies including article marketing, asking, joint ventures (JVs) with other marketers, guest posting on other blogs, blog carnivals, commenting on blogs, forum post signature links (these are “nofollow”ed so they give you traffic, but are not used in calculating your search engine rankings), and of course ‘Web 2.0’. The web 2.0 methods are using social sites such as YouTube, Facebook, Digg, del.icious, propeller, Mixx, Yahoo answers, StumbleUpon, reddit, and flikr.

I’m sure I missed some, but you get the point. These are extremely effective at getting you brand exposure and driving traffic. In some niches, the traffic from site as Stumble Upon and Digg doesn’t convert as well into sales as with other sources of traffic, but in some cases there’s so much of it, it doesn’t matter.

The other way of getting free traffic is to get good results in the search engines when people search for words or terms relevant to what you’re selling or offering. As I mentioned you’ll need links in to your site to help get good rankings. The more authoritative the site the link comes from and the farther up the page the link is placed (all else being equal) the more it is worth in terms of search engine ranking. You also want to carefully optimize your keywords and their use throughout your web pages and blog posts, especially the titles, title tags, meta tags and page / post content. I’ve done several posts on getting targeted traffic.

Your other traffic generation strategy is to pay for your traffic. You can do this in several ways, but the most common are to use pay per click advertising (PPC) such as Yahoo Search Marketing (formerly Overture) or Google Adwords, or to pay for your links to be placed on sites that would drive the kind of targeted traffic you’re looking for. You can use either paid text links or banner ads.

A few years ago paid text links were all the rage because of their positive effect on search engine rankings in addition to the traffic they generated, but they don’t seem to be as popular for this purpose now, as the search engines seem to have revised their algorithms. In any case, paid text links are definitely not my area of expertise.

If you choose to do PPC advertising I strongly advise you to learn as much as possible about what you’re doing because while this can be one of the most powerful wealth generating strategies on the Internet, and you can turn it on and off at will, you can also lose more money that you can possibly imagine, in record time, if you’re not careful. Get some good books on the subject, such as Perry Marshal’s Google Adwords, and definitely go to the AdWordsExcellence site.

One of the most important changes to have come down the pike with regard to Adwords in recent years is that Google looks at the quality of your landing page. It need to give a good user experience and relate exactly to the keyword in your ad otherwise your quality score will suffer, and your cost per click will go through the roof. The other thing is make sure your ad is relevant and your headline is extremely compelling because one of the other key things that Google uses to determine how much you’ll be charges is the click through rate. The better the click through rate the less you’ll pay per click.

Stay tuned for part 3 of this series on the steps to starting an Internet business.

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I've had posts featured in a number of business and finance blog carnivals recently. Here are links to some of these carnivals -

How to Make Money Doing What You Love - Issue #4

Blog to Earn - Friday Edition

Internet Business Blog Carnival #14

Featured my post Free Blog Traffic - How to Get More Traffic to Your Blog

Carnival of Business and Entrepreneurship 23 

Carnival of Sales and Management Success - May 31st Ed 

Internet Business Blog Carnival - 16th Edition 

Featured my post  Creating a Customer Loyalty Strategy – How to Reach Your Business Profitability Goal

Working at Home Blog Carnival #84 

Making Money Online Business Ideas - May 7th Ed 

Featured my post Increase Targeted Web Site Traffic – It’s All in a Name 

 Thanks to all of them - There are some great posts in these carnivals. Give them a visit. You never know what you'll discover; you may find the next idea to explode your business!

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These are the steps to starting an Internet business. Interestingly enough they are roughly the same steps you'd take to start any business, on-line or off. Many people will tell you it's all about working hard, and they're right, however it's more about working smart. You will scale your effort ap as your business grows, but you can only add your own effort to a certain extent. You will reach your limit and if your entire business is based upon the effort you expend, the growth phase of your Internet business will be over. so far.

Instead of merely working harder, you need to work  smart. The smartest thing you can do in an Internet or any other business is to leverage other people's resources to make money. It's the same weather you're in business online or you have a traditional bricks and mortar (nice old phrase from the '90's) business.

With that in mind, here are the steps you'll need to take in order to start your Internet business and make it a success.

Step 1 to Starting an Internet Business -  Set specific, quantifiable goals. It's not enough to say “I want to make alot of money” or “I want to make enough to quit my current job” Although you may, in fact, want to do both of those things, you'll need to be far more specific when taking this step.  Something on the order of “I want to make $12,000 a month in gross, monthly, revenue by the end of 2008” is more appropriate. The next thing you'll have to do as part of this step is actually write your goals down. It works well for many people to post them in a prominent place, so you'll have a constant reminder of where you're going in your business.

Step 2 to Starting an Internet Business- Resolve to take action. This is important, but in many cases it never gets done. You have to make a resolution to yourself that you will achieve the goals you've set for yourself and your business.

Step 3 to Starting an Internet Business- Determine what action you're going to take -  This is actually an action in an of itself. You will have to actually show some initiative and take action just to determine what action you'll be taking as you begin to move your business forward. Set a time limit on this, lest you suffer from "analysis paralysis". This is a very common problem, as many people get overwhelmed and never actually do anything.

To combat this tendency, break up your requirements into a series of small tasks you'll have little trouble completing. Focus on only one of these at a time. Make sure it is complete before moving on the next. When this step is complete, you'll have a plan of attack that you can follow. Again, make sure you write this down. This plan will actually become the marketing plan component of your overall business plan.

Step 4 to Starting an Internet Business – Take action. This is the most important step. The vast majority of people out there watching game Wheel of Fortune and playing the Lottery, while letting thoughts of wealth run through their minds will be doomed to eternal failure for the single reason that they never actually took any action. They just plain never showed initiative and actually did anything, besides wish for success. Unfortunately for these people wishing won't drive people to your website, yank the credit card from their pocket and fill your Pay Pal account with cash. You actually need to market a product or service to make that happen.

If you just decide what action you're going to take and actually take it, you'll be ahead of 95% of the population that sits on the sidelines thinking rich people are lucky. Well, to a great extent you make your own luck. A moron that does everything wrong, but actually does something stands a far greater chance of becoming a success in their Internet business, than a genius that does nothing.

Step 4a to Starting an Internet Business - Research a niche. In fact you'll probably research many niches before you find the one that you'll start with. How do you research a niche? That's been the subject of more than a few reports books, and special bonus offers, but you use the tools at your disposal on line. For example, there's a little website you may have been to on occasion called Google that's worth it's weight in Gold when you're doing research. They have a tools section with many resources for just such an occasion. In time you'll begin to use more advanced tools for niche and keyword research, such as Wordtracker and Keywordspy to determine exactly which keywords are profitable, but for now you won't need to go to this level of sophistication. That's for a later step in the process.

When researching niches you'll want to look at a number of things. Does the niche receive traffic? If people aren't looking for a solution or showing interest in the niche, your chances of making money in it are severely limited. The key is to find people that are looking for a solution and are willing to pay for it. If you market correctly, they'll pay you for it, or you'll be paid for it by those actually selling the product, but more on that later.

How do you determine how much traffic a prospective niche gets? You can use Google's webmaster tools, such as Google trends and "Top Search Queries" reports, to determine the relative amount of traffic the niche receives. Trends is great because it tells you weather no not the traffic is trending up or down. Other great tools to use for help in this area include eBay Pulse and Technorati.

The next question that you'll answer is weather or not the traffic in this niche is looking for a solution you can provide or help to provide. If people are looking for solutions that include products that can be sold over the Internet or information that you can provide to them over the Internet, than the niche has possibilities.

The next step is to determine weather you can profitably provide the products or services from the Internet. If the people are looking for information, but are unwilling to pay for it, then the niche is probably not worth your time, unless you can find a new angle that people are willing to pay for. The same holds true for products. While many products are successfully sold over the Internet there are some that are not as successful. Niches that concentrate on products with successful track records of Internet sales are the ones you want to concentrate on.

Again, Google can be a help here. Use Adwords tools to find out how much people are bidding for keywords within a niche. Chances are if other business owners are willing to pay a large amount of money to bid on particular keywords, there's a reason for it. They are either completely misguided, or the keywords are making them money. The expensive keywords can point the way to profitable niches, but don't rely on them exclusively because they can't find all the good, profitable niches, they're just  one tool to use for help in this area.

There are two schools of thought on finding a marketing niche for your business. School number one on niches says that you want to find a small, under served niche that you can dominate. The theory here is that if you narrow your focus enough there will be a group of hungry customers that just aren't getting what they need. Since there is little competition for this small, but hungry group of buyers, you can swoop in and fill their needs, while making a healthy profit at the same time.

School two, on the other hand takes the opposite tack. The followers of this school of thought opine that you'll find more success by targeting a huge, proven niche with millions of customers, and just grab a small, yet profitable piece of the pie. Who's right? Well they both are. There are many successful marketers following each strategy. In fact many marketers follow both strategies and market to different niches. Basically, you'll choose between being a big fish in a small pond and a small fish in a large huge lake.

In my next post I'll look at the next series of steps to starting an Internet business. Stay Tuned.

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Small business liability insurance is one of those things that too many small and home based business owners don’t have and frankly just can’t see the need for. In many cases this is a bad business decision that can come back to haunt you worse than any late night movie. This is especially true for anyone who owns a home based business such as consulting or one that sends employees out to work on other people’s property, such as landscaping or painting.

In many cases contractors will be required to be bonded to get a license to ply their trade, but this is not the same as insurance. Such a bond, called a surety bond, merely insures that in the event you fail to complete a contract, the contractee can recover damages from the bond. The bond does not protect you as a business owner, it protects your customer.

If you have a substantial amount of office equipment in your home office, you should at least ask your homeowner’s insurance company to give you a home office rider to protect the contents of your office. In many standard homeowners policies, the contents of you home office will not be included.

Small business liability insurance is very important for most types of small business these days, even if you have a home based business. Should you say the wrong thing you risk a defamation lawsuit, you could be sued for a product you’ve sold, or a customer could be injured on your property. All of these events could be devastating should you be uninsured. Liability insurance will protect you and your business against such a problem. There are many situations where a liability problem could arise that your insurance would kick in to protect you.

If you are a consultant, you could give advice that causes a problem. This could precipitate a lawsuit. One of your employees could damage someone else’s property in the course of business and you would be liable for the damage.

If you run any type of business out of you home that requires you or any employees to drive company owned vehicles during the normal course of business, such as process serving, delivery, contracting or landscaping, you’ll want to get business vehicle insurance. Before you hire a new employee, be sure to have their driving record checked to make sure that they are insurable or that they will not raise your rates too much. This can also protect you against any liability incurred while you or an employee are driving the vehicles. Your standard auto insurance will not cover for business related use in most cases.

If you do contracting work for some companies, they’ll require you to name them as an additional insured on your insurance policy, thereby indemnifying them against damages to the limit of the policy. That way they can be more protected against problems because they are protected by your policy. In that case you better have insurance, because you’ll need to show them a certificate naming them as an additional insured; you can’t just bluff your way through it.

The most important thing for your business is liability insurance. It only takes one slip up by an employee on someone’s property, or an incorrect consulting opinion to cost your business plenty. Typically the most cost effective option is to check with an insurance broker that represents multiple lines and specializes in small business insurance. You’ll get some piece of mind and it probably won’t cost as much as you think.

 

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