The Six ‘Startup Rules’ for Launching an Internet Business
It is easier and more appealing than ever to start a web-based business.
The number of households connected to the Internet has reached near total saturation. What’s more, an increasing number of consumers are choosing to remain always-connected through smart phones and similar devices. For a web-based business, that translates to a larger market of customers who are available whenever and wherever they may be.
The cost of the technology required to start an online business has plummeted. The fee for hosting a website or a blog is negligible by almost anyone’s standards. Free options, capable of supporting a startup, are widely available. Equally important, the level of technical training required for building a website, blog, or online store is no longer an insurmountable barrier. You can start a web-based business without a software engineer.
If you’re thinking of starting a business, recognize that while many things have changed, there are some important business principles that remain the same. Below are guidelines that have served new business owners for decades. They still apply today and can help you get your business off to a great start!
Startup Rule #1: Your new business must solve a problem for a customer.
What is it that your business will do that is so compelling that people will reach into their wallets, get out their credit cards and send you their money? Don’t start your business until you have a convincing answer to that question. Answering this question will literally help you define your business and identify your most important priorities. Those priorities will be focused on helping your customers solve a problem.
Startup Rule #2: Know your competitors strengths and weaknesses.
Too many new business owners think they will have no competitors. Every business has competitors. A competitor is not just a business that is very similar to yours. Rather, it is any business that solves the same problem, or fills the same need as your business, for the same customers.
The Java programming blog, that sells a series of webinars, competes with the bookstore and the online university. They all fill the same need for the same customers, just a little differently.
Beyond knowing who your competitors are, you must know where each competitor excels and where they come up short. To see the path of least resistance for you new business, map out your competitors strengths and weaknesses.
Startup Rule #3: Know who your customers are and how they make buying decisions.
It’s one thing to know who your customers are and yet another to know how they make their buying decisions. The most successful business owners know how their customers think.
What matters most to your customers? Price? Convenience? Quality? Service? Who makes the purchasing decision? What other factors influence their decisions?
Don’t be content to simply know WHO your customers will be. Know why they buy and why they will buy from you.
Startup Rule #4: Create one budget for starting the business and one for operating the business.
If you were flying an airplane across the ocean, would you want to know how much fuel you needed to take off, or how much fuel you needed to get all the way across the ocean? The answer is obvious. Yet, many new business owners focus on startup costs and lack the capital to sustain the business. They have no money for advertising or promoting the business.
The Small Business Administration reports that the number one reason businesses fail is a lack of capital.
As a new business owner, be sure your budget takes into account how much will be needed to start and sustain the business until it reaches profitability. Have contingency plans if your revenue ramps up more slowly than anticipated, as is often the case. Don’t let a planning oversight put you out of business.
Startup Rule #5: Have a revenue model that adds up.
Once your startup and operating budgets are created, you’ll know how much revenue your business will need to generate to sustain itself. Now you can do a quick reality check.
Estimate the average revenue from each sale you’ll make and subtract any outside costs. This is your gross profit on each sale. Divide your monthly operating costs by the gross profit per sale and you’ll see how many sales you’ll need to make each month to break even.
For many new business owners, the result of this simple equation is startling. They were thinking they could generate 200 sales per month and the ‘reality test’ shows they’ll need 400 just to break even. Yee-ouch! It’s time to revise the plan.
Make sure your plan adds up. Know how much you’ll need to sell and how you’ll get those sales.
Startup Rule #6: Do it because you love the game.
Having a passion for what you do is essential to being successful. The reason is simple: succeeding in business takes perseverance. When things get tough, you have to love what you do to stay with it.
Most successful business owners will tell you that it took longer than they had expected before they really started making money. If they didn’t love what they were doing, they would have changed course long ago.
If you have the drive and passion to start a new business, follow these six guidelines to help start your new Internet business right. Few if any career paths are more fulfilling than starting and succeeding in your own business.
Topic Tags:
how to start internet business, internet marketing, make money online
I’m Keller Hawthorne, Founder of FresheVenture.com. Whether you’re new to the world of Internet Marketing or already have your own Internet Business, I’m here to help you make a living online! 
Subscribe to My RSS Feed!