Thinking of starting an "online business"? Consider this first:

by DRP
14 replies
This place is flooded with starry eyed noobs who dream of fast internet riches. I hate to rain on your parade, but most of you clearly need a reality check.

Sure, it's possible to make some beer money. It's even possible to start a profitable business...like an actual incorporated business. But you need to understand that it's not very likely, and you need to understand this before you put yourself (and possibly your family) in dire financial straits.

Here are just a few questions to consider before jumping off the deep end:
  1. Will you be a sole proprietor? Or incorporate?
  2. What business idea can you run with realistically?
  3. What business model will be most appropriate?
  4. What are the costs associated with starting up?
  5. What equipment will you need to start up and operate?
  6. What are the costs associated with operation?
  7. What special licenses and permits do you need? If any?
  8. Who will pay for all of this? And how?
  9. Will you need to tap into your retirement accounts? Beg family? Friends? Investors? Or foot the bill yourself?
  10. What will be your MVP - minimum viable product?
  11. How will you acquire customers?
  12. What is your brand?
  13. What is your USP - unique selling proposition?
  14. How will you build brand awareness?
  15. How will you deal with industry disruptions? (ie. AdBlocker)
The list continues, and it only gets more complicated. This is just in determining if you should even bother getting started. As you can see, the reality is far more complex than what people here would have you believe. But remember that 99% of the people online are basement warriors making pocket change, if anything.

Making beer money or being a sole proprietor is one thing...incorporating is a different monster altogether...and not as glamorous as most people think it is. But that's the difference between a real business and just freelancing. The whole "online business" thing is a farce. Business is business. Cut and dry.

Run the numbers and be brutally honest..the numbers won't lie. If you don't, just remember that you're only hurting yourself. ::drops mic::
#online business #reality #starting #thinking
  • Profile picture of the author Steve B
    Originally Posted by DRP View Post

    Run the numbers and be brutally honest..the numbers won't lie.

    Telling noobs to "run the numbers and be brutally honest" is like telling a child to solve a quadratic equation.

    Unless they are led by the hand and shown what the numbers are and how they can be used to answer the questions you have raised, they won't have a clue how to validate their business idea.

    Steve
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    • Profile picture of the author joykhan
      Originally Posted by Steve B View Post

      Telling noobs to "run the numbers and be brutally honest" is like telling a child to solve a quadratic equation.

      Unless they are led by the hand and shown what the numbers are and how they can be used to answer the questions you have raised, they won't have a clue how to validate their business idea.

      Steve
      right now. i like online business and i agree to this.
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  • Profile picture of the author danieldesai
    While the OP mentions some great points, such as determining what business model is most suitable, the cost of operation, etc., I must say that if a newbie were to try answering ALL the points raised before starting, he'll never get started at all.

    I have family and friends who run brick and mortar businesses, and all these things are important to know but...

    Here's the kicker.

    A lot of people who started and later built ventures into something profitable could not for the life of them answer all these questions initially.

    I'm not saying to disregard all these points, I'm just saying that it's easy for established business owners to look at all of this and think it's necessary to get started with (because they take for granted how long it took them to understand everything).

    I know a lot of successful business owners who would not have what they have today if they attempted to answer all these questions before they got started.

    Regards,
    Daniel
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  • Profile picture of the author Regional Warrior
    Bonafide Expert pffft does not get what it is all about ! the whole process is learning not some ego rant And the biggest and most valuable lesson you need to know is every one is a newbie and will always will be.

    And like Steve mentioned most new players in the market like to have there hands held thru the process

    >>Picks mic up and hands back so it does not get mistreated and works next time!
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  • Profile picture of the author Smart Income 101
    You're going about this wrong. Get started then address your points as you have to. I think Tai Lopez says something about this, paralysis by information overload - true stuff.
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  • Profile picture of the author Sempeneh
    The answer to that all is : Just Do It
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    • Profile picture of the author superowid
      Originally Posted by Sempeneh View Post

      The answer to that all is : Just Do It
      Yeah. I agree with this. Just Do it! And Just Forget That Numbers!
      I did that way. I made it. And I'm happy with my result now.
      Most success & famous people in the world did it without though of that numbers when they started their dream!
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      • Profile picture of the author awesley
        Interesting discussion. I think so many people want to try online business even with zero experience is because of the low initial capital and the attractiveness of it.

        Though it is a long journey to be really successful online, perhaps people need to learn this for themselves to decide if it is for them or not (hopefully they won't waste too much in the process) but my feeling is that it is difficult to convince anyone not to start an online business without thinking through everything.
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  • Profile picture of the author Mark Singletary
    I disagree with the tone that the OP takes in many of their posts. For example, they blast teachers in their sig yet this post is also a form of teaching. So by their own words, they must not know what they are doing.

    However, I'm surprised at the backlash this post has received. Why?

    Nearly every day we are faced with people wanting to know how to turn $7 into rent money by Friday and it needs to be recurring. These are people with no plan, no clue, no skills, no money, no website, no nothing but some guru promised them riches. The great majority of these people turn into the folks in the next paragraph.

    All the time we read goodbye cruel forum posts or posts begging for help. These are last ditch cries for salvation after spending months or years going in circles, spending all their money, losing all hope, and so they come here to post their last hope thread.

    Many/most of these bad situations could be resolved if people ran things like a business. I don't think people need a 100 page business plan, full set of accountants, lawyers, secretaries, etc. to get started. But they do need some semblance of a workable plan. They need to know what they expect to achieve and have some reasonable hope/plan of how to get there.

    Most of the numbers and points the OP makes could be written on one page to get started.

    Some of them may not be absolutely vital in the beginning but I think that having an idea about the following ones are important (note the numbering changed automatically from the OP):

    1. What business idea can you run with realistically?
    2. What business model will be most appropriate?
    3. What are the costs associated with starting up?
    4. What are the costs associated with operation?
    5. Who will pay for all of this? And how?
    6. What will be your MVP - minimum viable product?
    7. How will you acquire customers?
    8. What is your brand?
    9. What is your USP - unique selling proposition?
    10. How will you build brand awareness?
    Isn't this the exact same advice we give to people that are new or those that are old but are about to throw in the towel?

    We ask them who their target market it and help them adjust where needed.

    We tell them that $7 may not be enough to get started so they may need to get a job or do some freelance work to earn money to fund their hosting and autoresponders.

    We talk to them about how they are going to get traffic.

    We advise them on whether their product or service is likely viable or not. We review websites and give suggestions, for example.

    For those that have no clue about which way to go we review the basic models involved in online business.

    Etc.

    So, as for me, I think most of the OP has value and is needed by anyone serious about making it online (or off). Sure there are those that can wing it but anyone that can't answer some basic questions on one page probably is never going to get anywhere in their business. And when they come back with their desperation posts, we'll remind them in various ways of what may have gone wrong. Why wait until then - why not push more self introspection upfront?

    Mark
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  • Profile picture of the author Jason Kanigan
    The real problem is jumping from thing to thing, shiny object to shiny object.

    The truth is it takes time to figure out what works, even if you know what you're doing and have experience.

    You don't need to worry about business structure, accounting, branding, any of that stuff at the start. You can do that later.

    At the very beginning, what's most important is identifying a group of people who admit to having a serious problem, and being able to solve it for them. If you can do that, you should be able to make money.

    Contrast with "I got this whiteboard video making software; I'm gonna be rich!" Huh? How? Where's the market? Where's the problem? Where's the solution?

    I got started online by using the internet as a platform--that's it, a form of media, communication--to reach people who needed help with selling. They knew they were bad at selling. They also knew if they didn't do something to fix it, they wouldn't make enough money to pay their bills. And I could solve that serious problem for them by providing expertise. It still took me 3 months of participating in the forum, not putting up any offers, learning the pain points, and formulating what that offer & solution would look like, before I put out a successful product.

    And that was after 15 years of real world business education and experience. That was over 4 years ago now.

    That's the essence of it: matching hungry market and competent solution. But people get so distracted by shiny technological objects they miss the point. I've said it before and I'll say it again here: if technology is the answer, and we're surrounded by technological solutions here, why is just about everyone dead broke??
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  • Profile picture of the author Curtis2011
    Your post is very accurate. However, there's one counterweight to all those issues that makes online business opportunities so enticing: low startup cost.

    In today's world you can literally start an online income from zero dollars of investment. There are countless stories of people who started a free blog on Wordpress years ago and today they crossed the $10,000 per month mark, or beyond.

    If you are smart and dedicated, you can build an online income source without subjecting yourself to almost any risk at all. The only risk is that your time is wasted if it doesn't succeed.
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    • Profile picture of the author Regional Warrior
      Originally Posted by Curtis2011 View Post

      Your post is very accurate. However, there's one counterweight to all those issues that makes online business opportunities so enticing: low startup cost.

      In today's world you can literally start an online income from zero dollars of investment. There are countless stories of people who started a free blog on Wordpress years ago and today they crossed the $10,000 per month mark, or beyond.

      If you are smart and dedicated, you can build an online income source without subjecting yourself to almost any risk at all. The only risk is that your time is wasted if it doesn't succeed.
      Agreed , Curtis mate you are so going to get a lot of PMs about this
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      • Profile picture of the author farichsolos
        Oppositely, there are numerous advantage of online business with the help of technology nowadays. The fact that anyone can start making money from zero is one of the reasons why many starts online business, apart from it low startup cost.

        Starting an online business does not mean you're not serious in making money or opportunity for being illegal by not registering your company or file your taxes. Internet gives you ability and facility to reach your audiences and prospects, and results that you get will be up to how much effort, money, strategy, and consistency that you put in it. Just like other businesses, online businesses have their own system too.

        The system never fails, but people do.

        If the online business is not for you, or if you think it is hard, then you have many options out there that is simpler and more suitable to you.
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        • Profile picture of the author Kay King
          Not a bad list at all - but usually many of the points are ignored by people new to working online. This is mainly due to the low barriers to entry - no education, no experience, no money required....or so you are told...to earn money online.

          If nothing else, I wish people would ask a few common sense questions... easy ones, like:

          1. What do I KNOW how to do?

          2. What do I have to offer others?

          3. Can I speak/write the language of my target market?

          4. Am I willing to read/study/learn/work in order to EARN money?
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          Saving one dog will not change the world - but the world will change forever for that one dog.

          My mind still thinks I'm 25.
          My body thinks my mind is an idiot.
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