This article is part of the Secrets of Creating and Growing an Online Business series. All week you will find articles that demystify what’s involved and what the secrets are to success.

There’s a lot of money to be made online and a lot of fantastic opportunity to learn along the way. In fact there is so much choice out there that it’s easy to freeze and not know where to begin. This article is intended to help you in finding the right venture for your situation and skills.

Should You Start At All?

Owning an online business is a commitment and like anything worth doing it takes time, effort, and patience to pull it off. Normal life is rarely an excuse to pass up on embarking on such a rewarding experience, but be realistic about your situation. Be sure that you can devote time each day to keep things running and that your finances match your business needs even when you find that sales aren’t coming right away.

Part-Time or Full-Time?

A great advantage of starting online is the ability to run a smaller business. If you rent a physical store then that store must be operating full-time hours to have hopes of generating the revenue to pay for the rent. Online you pay very little to have your website up 24/7, and that’s assuming your business will even have a site.

If this is your first online venture then you should strongly consider putting this advantage to use and starting it on the side first. You can accomplish a lot while still earning an income at another job, going to school, or participating in some other full-time commitment. You can always quit your day job once the money is rolling in. Do pay attention to your employment contract and check with your boss before you start or you may run into ugly issues with intellectual property ownership.

What Kind of Business Will it Be?

“Online Business” is an extremely vague term. You will need to decide whether you start at home or an office, whether you have employees, and what exactly you will sell. Whatever you do decide to take on, it should be based around a strong talent or skill that you possess. Don’t bother trying to do something that you don’t know anything about just because you hear it’s hot; your abilities and knowledge are part of your competitive advantage!

The amount of opportunities out there is rather stunning, so let’s have a look at a few:

Creating Your Own (Digital) Product

Be it an information product such as an e-book or newsletter, or a nifty shareware program, this is a really good opportunity for creative folks with knowledge and talents to share. The internet has removed the traditional barriers of manufacturing, shipping, and publishing a product by allowing everything to be done digitally. If you can find the right niche and are an expert, then creating a strong-selling product could take you only a couple months or less. You do need to be able to provide substance and not just hype, so draw on what you know and are capable of to create something new and desirable.

CustomBar is a shareware program I wrote several years back which still receives sales today. Since it’s all online the only fees I have to pay are for payment processing (I already have web servers so didn’t need hosting either) and purchasing is fully automated. This is a good example of passive-income: I make money without having to perform work for every sale. It’s a great way to build a highly scalable operation.

Creating Your Own (Physical) Product

If your strengths lie in physical output, selling online still grants you access to a much bigger market than you would achieve through local means. There’s plenty of market space for high quality hand-made goods ranging from candles to pipes, customized items, or items that you are manufacturing.

Shipping becomes an issue so be sure that your target market doesn’t live too far away, or that the cost of your product makes shipping costs negligible in comparison. Every order will inevitably take more of your time than a comparable digital product, so make sure that you are in a position that allows you the time to fulfill orders.

Contracting and Consulting

In this case you are likely selling yourself or a small group of people with a specific skill that others desire. The service doesn’t necessarily need to be performed online to take advantage of the internet, but it certainly helps. Common skill sets include graphical design, computer programming, website optimization, and marketing services, but everything up to and including love advice is fair game.

Be aware that since you are selling yourself and your time, there is a limit on how much work you can take on. Since people are often buying you the person it may also be difficult to hire others to do some of the work. This will make it harder to grow your business rapidly, but with the right skills and a great track record you are also far less likely to become obsolete than a product.

Since starting Tilted Pixel I have carved out a market for myself through providing highly manageable websites that accomplish the needs of my clients. As more people learn from trusted friends and colleagues of my services, I find myself with more and more work to do.

Online Publications

Blogging is the new phenomena sweeping the internet, but people have been making money from online content for a very long time. To do well you or your writers must be able to continuously deliver content that internet users desire and find ways to make money from doing so. Since so much information is available freely it is difficult to charge directly for content. Donations, advertising, affiliate programs, or using your publication to sell your own products or services are all ways to get around people’s expectations of free information. Whatever revenue module you choose, you will need to spend a long time optimizing and building traffic before you receive enough revenue to live on. Be patient.

ProBlogger.net and StevePavlina.com both have terrific information on monetizing content. They are focused on blogs, but much of the same applies to content sites with a more traditional layout.

Reseller & Affiliate Programs

A twist on the traditional buying and selling of product, these programs provide a mechanism for referring potential customers to a product in exchange for a commission. Instead of fulfilling the order yourself and dealing with everything that’s involved, you are merely generating sales. You often get to brand the resold product under your own business name, and some programs provide you with tools to help you sell. You can find a reseller program for virtually any product, but the trick is finding your own niche market segment to sell it to. For some products like domain names the competition is extremely fierce and profit margins are very slim so don’t assume the most popular programs will net the best results.

Be extra careful when choosing to go this route. There is a lot of honest money to be made here, but this is also a field that is plagued with scammers and “sketchy” companies. Never put your name behind a product that you don’t believe in, and never ever participate in marketing that involves spamming or deceit.

So What’s the Right Fit?

Examine your situation, research the above opportunities, and match them up with what you would like to do. If you aren’t betting the farm on this one venture then you should definitely be willing to experiment, fail, and find out what works for you. The worst thing you can do is start and quit because sales aren’t rolling in from day one. The above categories also overlap so you may find that your business is really a combination of several. This blog is an information product and a publication, as well as referring sales to Amazon.com through its Associates program.

The lesson here is that there’s something for virtually everyone that is willing to put in the time and effort to learn and becoming skilled at selling online.

Got something to say? Leave a response to this post.

 Get the latest updates by subscribing to the feed.

Semi-Related Posts

• The Secrets of Creating and Growing an Online Business
• 5 Specific Ways to Increase the Amount of Visitors Turned Customers on Your E-Commerce Website
• Intuition’s Role in Achieving Goals
• mySportSite: a Real Life Story of a Successful Business out of High School

This entry was posted on Monday, July 3rd, 2006 at 2:12 pm and is filed under Business, Entrepreneurship, e-Commerce, Startups, Business Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.