3 Books +1: Starting an Online Business 11 in 1

Finding a business that’s your type
You can pursue a variety of businesses to earn money online.
Almost all types of income-generating opportunities fall into one of two categories: Business to consumer (B2C): Customers are typically the individual consumers who make up the general public.

They buy products or services designed for personal use. Business to business (B2B): Customers are most likely other businesses.
They might buy steel by the ton, employee uniforms, or anything that would be used primarily by a company. Crossover between the two categories can occur.

Sometimes, either type of customer can use the products or services you offer,
as is the case with office supplies.
And with more businesses now shopping online, this crossover occurs frequently.
Knowing whether your primary customers are individuals or businesses helps you to create more effective marketing campaigns.

Typically, these two groups buy from you for very different reasons.
By marketing to each individual group, you can better target your advertising messages for increased sales.
You may find that your primary customers require (or respond better to) one type of marketing and that your secondary customers require another type.

Within the two primary categories, you find the different types of businesses you can operate. Here are a few examples of the ways in which you can generate revenue online: Online retail:
When you have a bricks-and-mortar store and offer your retail products for sale online as well, you enter the world of online

retailing. You’re responsible for hiring the resources and purchasing the tools needed to sell your wares over the Internet.
One example of an online retailer is the Barnes & Noble bookstore — you can buy your books online or visit the bricks-and-mortar store. As mentioned, most traditional businesses now have some component of revenue that comes from online sales.

E-commerce storefront:
E-commerce is a broad term used to describe the transaction of business via the Internet.
E-commerce can also refer to any website where you sell merchandise but lack a physical location for customers to visit in person (bricks-and-mortar store).

The term commonly used for this type of online business is an e-commerce storefront . (Offline, the retail industry uses this term to describe the outside of a building, which includes its signage, front door, and overall image.) In this book, a storefront is a one-stop shop for setting up an online presence to sell products.

Etsy.com and CafePress.com are examples of storefronts.
Both storefront sites provide you with a custom page that displays all your wares.
Etsy.com allows you to customize the page from which you sell your handcrafted
or vintage wares. Your page on CafePress.com has a structure that matches the overall CafePress.com site.

Think of it as a flea market or one of those small kiosks you see in the mall — you get your very own little shopping area that you can customize, and visitors to your page see your merchandise and can learn a little about you if you choose to include personal information about yourself or your business.

We discuss storefronts in more detail in Book VIII, “Storefront Selling.
For now, you need to know that good storefront providers offer the following: Templates for your website: You don't need to build a site from scratch.

Many storefront providers provide you with wizards or HTML files that you can customize for your storefront. Hosting options: Many storefront providers have a variety of options for you, some free and some for a fee.

These options might include shopping cart systems, phone support for your storefront, and discounts on fees if you pay rent by the year rather than monthly.
A shopping cart solution:
The method that customers use to purchase products from you.
Payment options (possibly):
The capability to accept online payment (credit card or debit card) is an absolute must. But other options allow payment to be deferred or even allow financing of purchases. Products (in some cases):
Your preferred storefront solution may offer you everything but the kitchen sink, as the saying goes. Increasingly, you have the option to use a provider that also supplies the product. Your contribution is providing unique artwork or content (as with CafePress), or simply providing traffic, or customers (as with an Amazon storefront)

An auction:
The way your customers buy products is somewhat different when you auction items. Your customers can bid on the final purchase price, as opposed to buying at a price you set. (eBay, the daddy of all online auction sites, has become so popular, however, that it has blurred the lines among auction, storefront, and online retail. We discuss eBay in Book VIII, Chapter 4.)
Service business: You don’t have to sell products to have an online business.

From doing taxes to writing brochures, most professional services can be sold online, just like physical products. Web-based services or applications, also called software as a service (SaaS), is another type of service business and is often sold business to business (B2B).

Content site: Charging a fee for all types of content and information products has become an accepted business model, especially in the last few years.

And as a content site becomes more popular with visitors, options such as paid advertisements on the site can also generate income.

The growing use of electronic readers (such as the Kindle and Nook) as well as Apple’s iPad are helping create more acceptance and demand for paid content in the form of e-books (electronic formats of books or manuals).

Similarly, the popularity of YouTube and other social media sites is driving interest in video. When you consider types of content to offer for sale, include video as an option for your paid content offerings.

Social commerce:
A growing online moneymaking opportunity is found in a category labeled social commerce. People are discovering ways to earn revenue from Facebook, Twitter, Pinterest, Instagram, LinkedIn, and other social sites (online venues that connect and engage consumers).

Whether it’s selling games and apps through social media sites or boosting online sales through engagement in social networks, one thing is certain: Social commerce is a real opportunity for a viable online business.

E-commerce applications: If anything lends itself for sale over the Internet, it’s technology.
E-commerce (or electronic commerce) applications continue to provide lucrative growth for innovators.
Think of e-commerce as any type of technology product that makes doing business online (and offline) easier. Inventory programs, shopping cart solutions, and payroll management software are all examples of innovations that fit nicely in this category.

In Book IV, we explain how to create a revenue model for your business; you can apply this model to any of the types of businesses in the preceding list.

As you can see, you have no shortage of opportunities to satisfy your urge to start a business. After you officially decide to take the plunge, you can narrow e field and get started.

Getting Started Even after reading this entire chapter, you might still consider having an online business to be a dream — a vision for your future.

You might want to take small steps, testing the water to see whether an online business is right for you, just as you dip your toe into a pool before diving in.
At some point, though, you have to decide to go for it.

To that end, this checklist describes what you need to do to begin wading into your own online business:
Make the decision to commit.
Although you don’t have to quit your day job, you need to acknowledge that you’re ready to pursue your goal. Say aloud,
“I want to start an online business!” Set clear goals.

Write down why you want this business and what you expect to gain from it.
These goals can be related to financial objectives, lifestyle goals, or both.

If you know what you’re looking for, you can also more easily choose the right business to meet your needs.
Talk with your family.
After you commit to your idea and establish your goals, share your plan.
If you’re married or living with a partner, talk about your vision for the future.
After all, your dream for an online business affects that person’s life too.

Discussing your plans with family is also a helpful step in making your business a reality.
Create an action timeline. Unlike the broad goals you set in the first item in this list, writing down specific action steps can help you realize tangible results.
From researching business ideas to obtaining a business license, assign a targeted date of completion to further ensure that you make each step happen.
(Figure 1-1 shows an example of an action timeline for use with your business.) Identify a business.

As we show you in the preceding section, you can choose from different types of businesses to operate online. Before going any further, however, you have to decide which business to pursue.

Narrow your choices by thinking about what you enjoy doing or which specific qualifications you already possess.
Consider your professional experience and your personal desires.
You might even have a hobby that can be developed into a moneymaking business. Develop your business idea.

Define your idea and determine how you will turn it into a profitable online business. (Read Book I, Chapter 2 when you’re ready to evaluate whether your idea is feasible.) After you make it through this checklist, you’re ready to go to work and transform your dream into a legitimate business.

Turning Internet Dreams into Reality
In This Chapter Training yourself to think like an online entrepreneur
Evaluating your business idea’s chances for success Scrutinizing your future customers Picking apart your competitors Congratulations!

After you make the emotional commitment to get started, you have to shift gears and concentrate on the next set of actions that will make your Internet business a reality. From evaluating the potential success of your idea to identifying who will buy your products, in this chapter you gain the tools to help get your idea off the ground.
In the process, you begin thinking like an online entrepreneur and find
out how to start your business on the right track.

Thinking Like an Online Entrepreneur
Using the Internet to conduct business is similar in many ways to operating a traditional company.
In fact, many traditional offline businesses now conduct part of their business online. Today, consumers research products and services online and expect to be able to buy products or services online, even from bricks-and-mortar stores.

For those reasons, the lines between online and offline businesses are increasingly blurred. Profitability (or how much money you make after subtracting your expenses), taxes, marketing, advertising, and customer feedback are other examples of factors that affect your business whether it’s online or offline.

However, some exceptions set apart an online business, particularly with regards to how you deliver products and service your customers. Even the most experienced entrepreneur can get caught in the trap of forgetting those differences.

Your attitude and how you approach the business as an online entrepreneur can make a huge difference in how successful you are online. Adjusting your attitude slightly and viewing business from behind the lens of an online entrepreneur isn’t difficult.
Doing so is simply a matter of recognizing that the Internet changes the way you can and should operate your online business. When you think like an online entrepreneur, you See the invisible storefront. Although the doors, walls, and even the salesclerk for your online business might be invisible, they definitely exist. In fact, every part of your web business leaves a distinct impression.

Yet rarely do you hear or see the response to your storefront directly from customers. Consequently, and contrary to popular belief, a website demands your continual care and attention — adding products, fixing bugs, replying to e-mail, and more. Understand who your customers are.
Even if you don’t personally greet your online visitors, don’t be fooled:
The Internet offers the unique opportunity to learn and understand almost everything about your customers.

You can learn where else they shop, how much time they spend on your site, what products they’re interested in, where they live and work, how much they earn annually, whether they are parents, and which magazines they read.

Online entrepreneurs collect and use this information regularly in an effort to increase sales and better serve their customers. (When you’re ready to meet your customer, turn to Book VI, where we explain how to get and use this wealth of customer information.) Respond to fast and furious changes.

The way people use the Internet to buy, sell, or search for products and services changes rapidly. Also, the rules for operating an online business as imposed by both the government and the business world in general are modified almost daily.

Sustaining success online means that you must take the initiative to keep up with new trends; laws and regulations; safety and security concerns; technology; and even marketing and social media tools.
Speak the language.
Communicating to your customers through a website can be challenging.

Your buyers want and expect quick and easy access to information.
Because attention spans are limited, content should always be relevant, easy to find, and to the point.
Communicate visually.
Equally important to the words you choose are the images you incorporate into your site.
Whether you use purchased stock photos or pictures that you take yourself, you want images to be crisp, clear, and relevant to the message you are communicating.

In addition, product images should be the best quality possible.
As an entrepreneur, you must choose both your words and images carefully.
Your site’s content, including the words and pictures you use on your web, will Help sell your products or services to visitors.
Serve as interesting and useful content to share on social media, which is an important method of marketing your online business.

Play a big role in search engine optimization (SEO), or the way you can increase visits to your site by placing higher on the list of rankings by Internet search engines.
(Yes, images, like words, are searchable and can help increase your rankings in search engines!) Know when (or whether) to innovate.

You might be able to develop a new or different method for doing business online, although it’s probably not necessary. Innovative tools already exist, and you can often find them on the Internet quickly and cheaply.
You don’t need to reinvent the
wheel — you just have to know how to find and apply the tools that are already out there. Reap repeated rewards. Establishing multiple streams of revenue or maximizing a single source of revenue is a common practice online.

For instance, you might have an outstanding information product for sale on your site.
The same product can just as easily be sold on other websites in exchange for a small percentage of earnings.

Or you can choose to add a product from another website to your site and pay that site a percentage of earnings.
(To begin increasing your earnings, read about affiliate programs in Book IV.)
Similarly, you may decide to sell cloud-based or web-based services to other businesses on a monthly basis.
This software as a service (SaaS) online business model provides recurring revenue for your online business.
Putting Your Business Idea under the Microscope Every successful business begins with that first idea.

From fast-food restaurants to selling cosmetics from home, Ray Kroc first dreamed of hamburgers at McDonald’s and Mary Kay visualized selling makeup door to door. When the Internet first provided similar opportunities, Jeff Bezos visualized a way for consumers to buy everything from books to clothing and have it delivered straight to their doorsteps through Amazon.

Your dream for an innovative new business is no exception — and the Internet has continued to make it easier than ever to launch a successful business. Maybe you have several unique concepts to choose from or are firmly set on a single one.
Either way, how do you decide whether you should quit your day job and focus on your brilliant idea?

You have to pick apart the idea, observe closely, and determine whether it merits a full-time (or part-time) business.
One question often asked is whether or not the idea has to be original. Innovative, never-before-broached ideas for an online business certainly exist.
But being the first to have and implement an original idea is not a guarantee for success.

Ultimately, your concept for the business, whether it’s a new idea or a twist on an existing idea, must be well thought out to increase your probability for success.

This section describes the three methods you can use to decide whether your idea has potential.
Using informal research to verify your idea
The best place to begin gathering information is from sources closest to you.

Be prepared to receive varying opinions — both positive and negative. Use this input as a general gauge of whether to continue reaching out to the next source of information. You and your idea are in the center, surrounded by three rings from which to collect input, as shown in Figure 2-1. If the ring closest to you provides mostly positive input, proceed to the next ring.

Figure 2-1: Using your close contacts and moving outward is a good method for gathering information.
Ring 1 consists of your friends, family, and coworkers.
Ask them these questions: Have you ever heard of this type of product or service? Would you buy this product or service ?
Do you think it’s a good idea ?
What challenges do you think I will encounter ?
What are the benefits ?
Can you envision me selling this product or service ?
Why or why not? In Ring 2, seek input from industry professionals, investors, other entrepreneurs, and organizations that offer support to small businesses.
Ask questions similar to those listed for Ring
1. Because of the experience of the people in Ring
2, you should give more weight to their responses.
Small-business support resources include
Small Business Administration (SBA) at www.sba.gov :
The SBA, a government-sponsored organization, helps small-business owners
with loans, paperwork navigation, free seminars, and other services.

Small Business Development Center (SBDC) at www.sba.gov/sbdc :
The SBDC is a partnership between the SBA and universities.

Together, they provide support, mentoring, training, and educational services to both new and established small businesses.
SBDCs are available through local branches, often located in a partnering university or Chamber of commerce.

Chamber of Commerce at www.uschamber.com :
From small towns to large cities, all local chambers help owners develop their small businesses. SCORE at www.score.org :
This network of retired executives matches small-business owners with business-exec retirees who volunteer their time to help small businesses develop and prosper. In Ring 3 are your potential customers.
Ask them these questions: Would you use this product or service ?
Have you used something similar ?
How much would you be willing to pay? How often would you use it ?
Where would you normally go to buy this product or service ?
Would you order it over the Internet ?
If you find that you’re receiving a majority of positive feedback from sources
in all three rings, you can consider your idea worthwhile.
Or at least you have enough validation to continue to the next phase of your evaluation process.
Applying a SWOT analysis to your idea Another popular method for determining the pros and cons of an idea is referred to as SWOT analysis.
(SWOT is short for strengths, weaknesses, opportunities, and threats.)

Companies use it for several reasons, including as a decision-making tool
for product development.
The simple process also lends itself to a more thorough investigation of your
business idea.
This section covers how you can put your idea to the SWOT test !
Create your own SWOT chart by following these steps:
On paper, draw a cross (or a box divided in half both horizontally and vertically)
to create four quadrants, and label them as shown in Figure 2-2.
After you draw and label the chart, you can begin to fill in the details.

each quadrant, write down the factors that influence or contribute to each of your four SWOT categories.
Strengths and weaknesses are considered internal factors that control or specifically contribute (good or bad) to the business concept.
Opportunities and threats are external factors that are influenced to some extent by the environment or are otherwise outside of your control.
Analyze the information you filled in.

Ask yourself the following questions to start developing your SWOT analysis: Strengths What advantages does the product or service offer?
Do I have expertise in this business or industry?
Can I get a patent to protect the idea?
Weaknesses How much does developing the product cost?
Is getting suppliers difficult?
Am I learning a new industry from the ground up?
Opportunities Does my idea take advantage of a new technology?
Is my product or service in demand?
Have changes in policies or regulations made my idea necessary ?

Does my product or service have established competitors?
Do my competitors sell the product or service for less than I can?
Will changes in technology make my product obsolete?
Use the feedback you receive from your informal research
(during the Three Rings exercise) as factors in your SWOT quadrants.

Combining other people’s opinions with your own provides a more
comprehensive — and useful — SWOT analysis.
After you fill in the categories of your first SWOT analysis, take a look at which quadrants contain the most factors or the most significant factors.

The listed strengths and opportunities indicate the advantage you might have in the marketplace. If you’re lucky, they outweigh your weaknesses and challenges.

Perhaps you can now see what you must do to offset those disadvantages if you really want your idea to work.
Whatever the outcome of your analysis, you should have a better feel for the value of your business idea after viewing the completed SWOT analysis.
Creating a feasibility study to validate an idea After your idea gains a nod of approval from friends and family and the SWOT analysis indicates that your product has merit, your idea must jump through one more hoop for complete validation.

A feasibility study is a somewhat formal, written process that helps you determine whether your idea is realistic.
The goal of the study is to provide you with final proof that your business concept is viable. A feasibility study answers these basic questions:
Will the product or service work?
How much will it cost to start?
Can your idea make you money?
Is the business concept really worth your time and energy?

A feasibility study kicks your analysis up a notch.
It relies on in-depth research to provide more detailed answers to questions in five primary areas, as shown in Figure 2-3.
Now you know how much information you have to gather in your feasibility study.

As you answer all these questions, make sure that you back up those answers with detailed research.
Then write your results in a one-page summary that discusses what you discovered. Your summary should answer the five basic questions in each category and provide proof of whether you have a viable idea.

After the validation process is complete, you can turn your attention to the next piece of the business success puzzle: potential customers.

Identifying Your Market and Target Customer
The terms target market and target customer are defined as the entities that buy
your product or service.
Although these phrases are sometimes used interchangeably, market is often
used to describe a collection of individual target customers.
The term buyer persona is also used as a way of providing a detailed description
(or persona) of your typical customers.

You most likely have several types of customers, each with a unique persona — and you mostly likely have several buyer personas that make up your target customers. Classifying your customer Knowing your target customer is an important advantage when you begin marketing.
As we explain in earlier sections in this chapter, recognizing your primary customers lends credibility to your business concept.

The more you know about your target customers, the more easily and cost-efficiently you can build your business and market to these folks.

How do you decide who this person is or who the groups of people are?
You can create buyer personas by describing or segmenting your customers based on different traits or classifications.

The two most common classifications are Demographics:
Age, income, gender, and occupation are examples of common factors used to describe your customers.
Music choices, hobbies, and other preferences make up this category.
Usually, psychographics reflect lifestyle choices.
You can describe your customers in other terms as well, such as these categories: Benefits:
Describe why customers use your product or service.
For example, customers might need it for medical purposes.
Or they might receive a luxury benefit, where they don’t need the product or service but choose to invest in it for perceived benefits.
Geographic preferences: Point out where people live.

The location can include a specific neighborhood, city, state, region, or even country. Customers can also be segmented according to home (or residential) locations versus business locations.

Technology has made it easy to target your customers by location.
Knowing where your customers are in terms of geography can be a critical competitive advantage. Use-based preferences:
Specify how frequently customers want or need your product.

Typically, your target market includes customers described by a mixture of the terms and categories in this list, which you use to develop your buyer persona.

For instance, if you sell trendy men’s clothing at discounted prices, one buyer persona for your target market might be described this way:
Male Age 25 to 30 Professional Owns home or rents high-end apartment, with a total annual household income of $50,000 or more Lives in urban area or major metropolitan city Buys clothing at least monthly and updates style seasonally to enhance appearance.

Going to the source In the preceding section, we talk about the components of a market description.
Where do you get the information to build this type of description, though ?
You can use any or all of the following methods to gather information for your customer profile: Survey potential (or existing) customers.
Conduct a focus group in which you interview a small group of likely customers.
Or distribute a survey or registration form online to gather the data.

Observe competitors’ customers.
Stake out your competitors by visiting them online.
You can often discover exactly what competitors think about their own customers by reading through their sites. (This information is often readily available on competitors’ websites in sections labeled About Us or Company Information.)
For competitors with retail locations, visit their stores and observe the customers and their habits in person.
Use published market research.

To identify the types of customers most likely to buy your products, read about trends in reputable market reports.
You can find much of the research for free online.
Larger research firms charge a fee (which can range from several hundred dollars
to several thousand dollars per report) for detailed reports. If this type of research interests you, start with companies such as Gartner (www.gartner.com), Forrester (www.forrester.com), or IDC (www.idc.com).
Use this information to pinpoint who your customer is.

Competing to Win:Analyzing Your Competition If you’re serious about developing a successful online business, you need every advantage possible.
That means getting to know not only who your customers are but also who else is after their business.
Start by writing down a list of your top three to five competitors.

Keep this list on hand, and document basic information, such as Website address Physical address (if they have one) and number of locations
Annual sales Number of employees.

Types of products or services offered (with full description) Strengths and weaknesses Copies of ads, flyers, and brochures Special promotions (especially online offers) Pricing information for products or services similar to yours As a quick and easy way to keep up with your competition, visit their websites and sign up for their newsletters and other promotional offers by e-mail.

You can also follow them on social media sites such as Facebook and Twitter.
Be sure to maintain a list of your secondary competitors, too.
These companies don’t sell your exact products or services but come close enough
to compete for your customers’ dollars. Hooray!
You completed your due diligence and have a fat file of information about your stiffest competition. What now ?
This kind of data does you no good when it just takes up space in a filing cabinet.
Use it to your advantage.

Sift through your collected information again to refresh your memory (because you probably have lots of information), and then follow these steps:
Compare apples to oranges. Using the information you collect, compare both your strengths and weaknesses to that of the competition.
(You can even do a complete SWOT analysis on each of your competitors !)
This comparison identifies where you fit in the marketplace relative to other players in your area of interest. Plan your marketing strategy.

You have access to your competitor’s marketing material, so use it to define your own marketing strategy.

Play up your company’s strengths in ads; advertise in markets that your competitors missed; and plan to educate your customers on the benefits that separate you from your competition. Create a competitive pricing model.

Maybe you discovered that you could beat a competitor’s price.
Or perhaps your research shows that you must price lower to survive.

Use a competitor’s pricing data to map out the best pricing model for your product or service. Determine growth models and financial requirements.
Suppose that a major competitor is ready to partner with a big distributor.

Although you might not be able to compete immediately, this information helps you plan for growth. Use this knowledge to better understand your competitor’s growth and financial strategies, and then adjust yours accordingly.

Getting Real: Creating a Usable Business Plan
In This Chapter Understanding the purpose of a business plan Organizing the pieces of your dreams into tangible goals Determining when you need help and what to expect Getting long-term value from the plan you make today One big complaint from entrepreneurs, especially those running small companies,
is“Why do I have to write a business plan?”
Quite honestly, you don’t. Some entrepreneurs who choose to forgo a business plan do just fine, but others struggle.

In this chapter, we tell you why having a business plan is a good idea and show you the benefits you can reap from not only having one but also reviewing and updating
it regularly.

We can’t possibly cover everything about writing and using a business plan in this chapter. After all, entire books are devoted to business plans. In fact, a good one to look into is
Business Plans Kit For Dummies, 4th Edition, by Steven D.

Peterson, Peter E. Jaret, and Barbara Findlay Schenck.
Understanding the Value of a Plan Starting and managing a business without a business plan is, like it or not, the same as searching for a buried treasure without a map: Although you know that the gold is in the ground somewhere, you’re wasting an awful lot of time by randomly digging holes in the hope of eventually hitting the jackpot. Without a plan, the odds of success aren’t in your favor.

Why, then, do people resist using this tool ?
They resist it for two reasons: Having a plan involves a great deal of work.

Don’t despair:
You can minimize the amount of work involved, which we get to momentarily.
They don’t understand the importance of having a plan.
To help you overcome your business plan angst, we provide these reasons for having a plan — you can decide whether to take another step without one:

You can more easily secure money.
This goal is probably the most common reason for the creation of a business plan.
If you decide to ask strangers to lend you money, whether those strangers are bankers or private investors, they want to see a plan.
Lenders have a better chance of protecting (and recouping) their investments when a formal strategy documents your projected income and profits.

Even if you’re counting on family members for a loan or are using your own funds, having a business plan confirms that you have thought about how to use the money wisely. A plan creates a vision that gives you a well-defined goal.

Coming up with a great idea and transitioning it into a viable business opportunity can be challenging.
Having a written plan forces you to fully develop the long-term vision for your product or service. With those clearly defined goals in place, you stand a much better chance of accomplishing your vision.
A plan can provide timeless guidance.

Done correctly, this document provides a concrete plan of operation for your
business — not only during your start-up phase but also for three to five years down the road. Keep in mind that the plan might need occasional tweaking
(as discussed at the end of this chapter).

However, investing the time now to create a strong foundation ensures that you have a barometer to help you make decisions for managing your company.

Chances are that at least two of the three reasons on this list are valuable to you. Even if you don’t plan to attract investors, you’re already forming a picture about what your company looks like, and you’re setting goals to make sure that you get there. The only remaining step is to make your thoughts more permanent by writing them down in a business plan.

Recognizing That the Parts of the
Plan Make a Whole A traditional business plan is sectioned into seven or eight
major parts.
At first, that number of parts might seem a bit overwhelming.
Consider, however, that most experts recommend keeping a finished business
plan to fewer than 20 pages.
(You can usually get by with many fewer pages.) When you break down that recommendation, each section becomes only 2 or 3 pages long, which
translates to 5 or 6 paragraphs per page.

It’s not so much after all.
Each part plays a critical role in your overall plan.
Although each section can almost stand alone, the sections work together to present a complete picture, or vision, of your business.
Don’t even think about omitting one of them.

Please Purchase the full book on Amazon Kindle.

Continue reading the following book.

Your Business in Context
In This Chapter Analyzing the feasibility of your business idea Figuring out your industry Doing research on your industry Determining where you fit in
Targeting a new product for the market This chapter starts at the very beginning, looking at how to step back and see a potential start-up business in the context within which it operates.

If you’ve already started your business and are committed to it, or if you know exactly what kind of business you want to run and nothing will change your mind, or if your idea is to start rather small, with a modest idea that doesn’t require finding much funding to get you going, you can skip this chapter.
Good luck to you.

But it could be to your advantage to stick around anyway, because the fact is, not every business is a good idea at the time and place where it is born.

You could save yourself some heartache by examining the external factors that will affect your business whether you like it or not.

If you choose the right business at the right time and the right place, your chances
of success are much higher.
Every successful business operates inside an environment that affects
everything it does.
The environment includes the industry in which the business operates, the market the business serves, the state of the economy, and the various people and businesses the business interacts with.

Your business doesn’t exist in a vacuum. Now, more than ever before, understanding your industry is a critical component of the success of your business venture.

If you position your company well inside a growing, healthy industry, you have a better chance of building a successful venture.

By contrast, if your business niche is a weak position in a hostile, mature industry, your fledgling business may be doomed.
Conducting a feasibility analysis can be a good way to get a clear picture of the landscape.
The first section of this chapter provides an overview of this process.

An Overview of Feasibility Analysis Feasibility analysis consists of a series of tests that you conduct as you discover more and more about your opportunity.
After each test, you ask yourself if you still want to go forward.

Is there anything here that prevents you from going forward with this 
business ?
Feasibility is a process of discovery, and during that process you will probably modify your original concept several times until you get it right.

That’s the real value of feasibility — the way that it helps you refine your concept so that you have the highest potential for success when you launch your business.

Today, you can often go for financing on the strength of a feasibility study alone. Certainly in the case of Internet businesses, speed is of the essence.

Many an on online business has gotten first-round financing on its proof of concept alone and then done a business plan before going for bigger dollars in the form of venture capital. But even if your business is a traditional one, feasibility can help you avoid big early mistakes.

Executive summary
The executive summary is probably the most important piece of a feasibility analysis because, in two pages, it presents the most important and persuasive points from every test you did during your analysis.

An effective executive summary captures the reader’s attention immediately with the excitement of the concept.
It doesn’t let the reader get away; it draws the reader deeper and deeper into the concept as it proves your claim that the concept is feasible and will be a market success.
The most important information to emphasize in the executive summary is your proof that customers want what you have to offer.
This proof comes from the primary research you do with the customers to find out what they think of your concept and how much demand there is.

The other key piece to emphasize is your description of your founding team. Even the greatest ideas can’t happen without a great team, and investors put a lot of stock in a founding team’s expertise and experience.

For an online business, you may want to prepare what’s called a proof of concept. This is essentially a one-page statement of why your concept will work, emphasizing what you have done to prove that customers will come to your site.

That may be in the form of showing hits to your beta site or a list of customers signed up and ready to go when the site is finished. Similarly, if you’re developing a new product, your proof of concept is your market-quality prototype.
Business concept In this first part of the body of your feasibility analysis, you are developing your business concept.

Essentially you are answering these questions:
What is the business ?
Who is the customer ?
What is the value proposition ?
How will the benefit be delivered ?
It’s important to be able to state your business concept in a few clear, concise, and direct sentences that include all four of the components of the concept.

This is what is often called your elevator pitch — a conversation that begins when the elevator door closes and ends when the door opens at your floor.

That means you have only a few seconds to capture your listener’s attention, so you better be able to get it all out quickly and confidently.
If you’re preparing a feasibility analysis that will be shown to investors, you should to state your business concept right up front in the concept section.

Then you can elaborate on each point as a follow-up.
Here’s an example:
Rural Power Tools is in the power equipment business, providing contractors and developers solutions to power needs in remote areas through rental equipment outlets. As you find out more about your business concept, you’ll also want to consider the various spin-off products and services you may be able to offer.

One-product businesses often have a more difficult time becoming successful than multi-product/service companies.
You don’t want to put all your eggs into one basket if you can help it, and you want to give your customer choices.
Industry analysis Testing whether or not the industry in which you will be operating will support your concept is an important part of any feasibility analysis.

Here you look at the status of your industry, identify trends and patterns of change, and look at who the major players in terms of competitors may be.

Also, don’t forget that one way to find a great opportunity is to study an industry first. More details on how to do an industry analysis are covered in the section “Researching an Industry,” later in this chapter. Market/customer analysis Here you will be testing your customer. Ideally, inside your industry, you find a market segment appropriate to your business.

Then you identify a niche that is not being served so that you have an entry strategy with the lowest barriers possible and the highest probability of success.
In this part of the analysis, you also look at what your potential customer wants and what the demand for your product/service is.
You will also consider a variety of different distribution channels to deliver the benefit to the customer.

To find out more, see the section “Defining Your Market Niche,” later in this chapter. Genesis or founding team analysis Investors look very carefully at the founding team because even the best concept won’t happen without a team that can execute.

In this part of the analysis, you want to consider the qualifications, expertise, and experience of your founding team, even if that consists of only yourself.

Be aware that today’s business environment is so complex and fast-paced that no one person has all the skills, time, and resources to do everything him- or herself.

Product/service development analysis
Whether you’re planning to offer a product or a service or both
(and that’s usually the case), it’s going to take some planning.
Consider which tasks must be accomplished to prepare the product or service for market, whether that be developing a product from raw materials and going through the patent process or developing a plan for implementing a service concept. Identify these preparatory tasks and figure out a realistic timeline for completion of them.
Put that timeline in your analysis.

Financial analysis In this part of the feasibility analysis, you figure out how much money you need to start the business and carry it to a positive cash flow.
You also distinguish among the types of money, which will be important in defining your financial strategy.

You can find out more about finding funding in Book II Chapter 2.
Feasibility decision After you have gone through all the various tests that comprise the feasibility analysis, you are ready to make a decision about going forward.

Of course, throughout the process of doing the tests, you may have decided
to stop — because of something you found out from analysis of the industry, market, product/service, and so forth. But if you’re still on the mission, now’s the time to define the conditions under which you go forward.

Timeline to launch You always need to end a feasibility analysis with an action plan so that you’re sure that at least something will happen.

Establishing a list of all tasks to be completed and a time frame for completing them will increase the probability that your business will be launched in a timely fashion.

The research you have done along the way will help you make wise decisions about the length of time it takes to complete everything and open the doors to your business. Understanding Your Industry New industries emerge on a regular basis.

In fact, with e-commerce holding so much of the attention of young businesspeople today, you may well ask, “Is e-commerce an industry ?
” That’s a great question. If you define an industry as a group of related businesses, then all e-commerce businesses have one thing in common: the Internet.

But retail businesses, manufacturers, wholesalers, and service companies are all on the Internet, so every member of the value chain is found in one location.

All retail businesses have retail in common, and all manufacturers have manufacturing in common.
Are retail and manufacturing industries as well ?
Within retail, you find clothing retailers and book retailers among many others.
Is clothing an industry ?
Is publishing an industry ?
The answer to all these questions is yes.

Actually, there are layers of industries, starting with the broadest terms and working down to the more specific terms.
Take an e-commerce business that almost everyone knows:
Amazon.com. If you consider e-commerce to be an industry, a grouping of like businesses, then Amazon is definitely part of that industry.

Within e-commerce, Amazon is also a retail business that happens to be using the Internet as its marketing/distribution channel.
Within retail, it operates in the publishing, music, toys, and video industries,
among others.
What this means to you is that when you study Amazon’s industry, you’re really looking at three distinct industries, and it’s important to understand what’s going
on in each.
You need to study the industry you have chosen for your feasibility study. Start at the broadest level of industry definition and work your way down to the segment that includes the product or service that you are providing.

Using a framework of industry structure One way to begin to look at the industry you’re interested in is to use a common framework.

One useful framework is based on the work of W.H.
Starbuck and Michael E. Porter, two experts on organizational strategy.
This framework steps you through analyzing your potential industry by assessing the outside forces that work upon it and then assessing the countermeasures that
you’ll need to implement against those outside forces.

According to Starbuck and Porter, new businesses must be constantly on the
lookout for forces that affect them in every area.
The business environment, especially the entrepreneurial environment, often looks like a battlefield.
But for every threat there’s a countermeasure.

The first step is to look at what these outside forces really are.
Carrying capacity, uncertainty, and complexity
This first environmental factor explains why so many industries today are changing, moving more rapidly, and making it more difficult for businesses to succeed.

Carrying capacity refers to the extent to which an industry can accept more businesses. Industries can become oversaturated with too many businesses.

When that happens, the capacity of businesses to produce their products and services exceeds the demand for them.
Then it becomes increasingly difficult for new businesses to enter the industry and survive.
Uncertainty refers to the predictability or unpredictability of the industry — stability
or instability.
Typically volatile and fast-changing, modern technology industries produce more uncertainty. But these same industries often produce more opportunities for new businesses to take advantage of.

Complexity is about the number and diversity of inputs and outputs in the industry.
Complex industries cause businesses to have to deal with more suppliers, customers, and competitors than other industries.

Biotechnology and telecommunications are examples of industries with high
degrees of complexity in the form of competition and government regulation.
Threat to new entrants Some industries have barriers to entry that are quite high. These barriers come in many forms.

Here are the main ones: Economies of scale:
These are product volumes that enable established businesses to produce goods more inexpensively than a new business can.

A new business can’t compete with the low costs of the entrenched firms.
To combat economies of scale, new firms often form alliances that give them more clout. Brand loyalty:
If you’re a new business, you face competitors that have achieved brand loyalty, which makes it much more difficult to entice customers to your products and services.

That’s why it’s so important to find a market niche that you can control — a need in the market that is not being served.
That will give you time to establish some brand loyalty of your own.
Later in this chapter you’ll find out more about niches, and Book V Chapter 4 covers branding in detail.

High capital requirements:
In some industries, you encounter high costs for the advertising, R&D (research and development), and plants and equipment you need
to compete with established firms.
Again, new companies often overcome this barrier by outsourcing expensive functions to other firms.
Buyer switching costs: Buyers don’t generally like to switch from one supplier to another unless there’s a good reason to do so.

That’s why once a person invests the time to learn and use the Windows environment, for example, he or she is reluctant to start all over with a different platform. Entrepreneurs must match a need that is not being met with the current product on the market to get the customer to switch.

Access to distribution channels: Every industry has established methods for getting products to customers.
New companies must have access to those disdistribution channels if they are going to succeed.

The one exception is where the new business finds a new method of delivering a product or service that the customer accepts — for example, the Internet. Proprietary factors: Established companies may own technology or a location that gives them a competitive advantage over new companies.

However, new ventures have often entered industries with their own proprietary factors that enable them to enjoy a relatively competition-free environment
for a brief time.
Government regulations:
In some industries, a long and expensive governmental process, such as FDA approval for foods and drugs, can be prohibitive for a new business. That’s why many new ventures form strategic alliances with larger companies to help support the costs along the way. Industry hostility:

In some industries, rival companies make it difficult for a new business to enter. Because they typically are mature companies with many resources, they can afford
to do what it takes to push the new entrant out.
Again, finding that niche in the market where you’re giving the customer what your competitors are not helps your company survive, even in a hostile industry.

Threat from substitute products/services
Remember that your competition comes not only from companies that deal in the same products and services that you do, but also from companies that have substitute products.

These products accomplish the same function but use a different method.
For example, restaurants compete with other restaurants for consumer dollars, but they also compete with other forms of entertainment that include food.

You could go out to dinner at a restaurant, take in a movie, and stop off at a pub
for a nightcap.
But there are movie theaters now where you can do all three of these things.
Threat from buyers’ bargaining power Buyers have the power to force down prices in the industry when they are able to buy in volume.

Established companies, if they are worth their salt, have this kind of buying power. New entrants can’t purchase at volume rates; therefore, they have to charge customers more.

Consequently, it’s more difficult for them to compete.
Threat from suppliers’ bargaining power In some industries, suppliers have the power to raise prices or change the quality of products that they supply to manufacturers or distributors.

This is particularly true where there are few suppliers relative to the size of the industry and they are the primary source of materials in the industry.

Don’t forget that labor is also a source of supply, and in some industries such as software, highly skilled labor is in short supply; therefore the price goes up.
Rivalry among existing firms Highly competitive industries force prices down and profits as well.
That’s when you see price wars, the kind you find in the airline industry.
One company lowers its prices and others quickly follow.

This kind of strategy hurts everyone in the industry and makes it nearly impossible for a new entrant to compete on price.
Instead, savvy new businesses find an unserved niche in the market where they don’t have to compete on price.

Deciding on an entry strategy
The structure of your industry will largely determine how you enter it.
Failing to consider the structure of your industry can mean that you spend a lot of time and money only to find that you have chosen the wrong entry strategy.
By then, you may have lost your window of opportunity.

For the most part, new ventures have three broad options as entry strategies: differentiation, niche strategy, and cost superiority.

Differentiation With a differentiation strategy, you attempt to distinguish your company from others in the industry through product/process innovation, a unique marketing or distribution strategy, or through branding.

If you are able to gain customer loyalty through your differentiation strategy, you will succeed in making your product or service less sensitive to price because customers will perceive the inherent value of dealing with your company.

Niche strategy
The niche strategy is perhaps the most popular strategy for new ventures.
It involves identifying and creating a place in the market where
no one else is — serving a need that no one else is serving.

This niche gives you space and time to compete without going head to head with the established players in the industry.

It lets you own a piece of the market where you can establish the standards and create your brand.
Cost superiority Being the low-cost leader is typically difficult for a new venture because it relies heavily on volume sales and low-cost production.

A new venture can take advantage of providing the lowest-cost products and services when it’s part of an emerging industry where everyone shares the same disadvantage.

Researching an Industry Getting to understand your industry inside and out is critical to developing any business strategies you may have.
Yes, it’s a lot of work, but it will pay off many times over.
Today, it’s much easier than it used to be to research an industry because of all the sources available on the Internet.

Of course, not everything posted on a website is necessarily true or from a creditable source.
Anyone can easily put up a website, tout that he or she is an expert in whatever, and if you don’t do any checking, you may end up relying on an unreliable source.

So, how do you check on your sources ?
Here are some things you can do: Ask yourself whether the site or author is a recognized expert in the field. Ask people who are familiar with the industry you’re researching whether they’ve ever heard of that site or that person.

Compare what that site or person has said with what others are saying.
If you find a number of sources that seem to agree, you’re probably okay.
Of course, don’t assume that just because many people are saying something, it’s necessarily true — that’s how rumors get started.

By the way, when you present information to potential lenders or funders that you’ve gathered from someone else’s research in your feasibility study (see earlier in this chapter) or business plan
(see Book II Chapter 1),

you need to give credit to that person with a full citation of the title, author, source, date, and page.
Things become a bit trickier with websites because sometimes all they give is the URL. Great sites like Inc.

Online and BusinessWeek
Online always attribute articles to their authors and the hard copy source.
Be wary of sites that don’t do this.
Always be aware that not all sites archive information, so what you find one week
may be gone the next.
That’s why it’s important to have a citation that includes more than just the URL.
When it’s time to analyze your industry, you’ll find a wealth of information out there. One good place to start is with the Standard Industrial Classification Index at

This site lets you search for your industry and industry segment and then gives you the 4-digit SIC code that represents that portion of the industry.
This code can prove useful for finding information at many sites you may choose. Checking out the status of your industry As you begin to do your research, you will probably find yourself overwhelmed with data and unsure which is important and which is not.

Here’s a list of questions to guide you in defining the critical information about your industry:
Is the industry growing ?
Growth can be measured in many ways: number of employees, revenues, units produced, and number of new companies entering the industry.
Who are the major competitors ?

You want to understand which companies dominate the industry, what their strategies are, and how your business is differentiated from them.
Where are the opportunities in the industry ?
In some industries, new products and services provide more opportunity, whereas in others, an innovative marketing and distribution strategy will win the game. What are the trends and patterns of change in your industry ?

You want to look backward and forward to study what has happened over time in your industry to see if it foreshadows what will happen in the future.
You also want to see what the industry prognosticators are saying about the future
of the industry.

But the best way to find out about the future of your industry is to get close to the new technology that is in the works yet may not hit the marketplace for five years.

What is the status of new technology and R&D spending ?
Does your industry adopt new technology quickly ?
Is your industry technology-based or driven by new technology ?
If you look at how much the major firms are spending on research and development of new technologies, you’ll get a pretty good idea of how important technology
is to your industry.
You’ll also find out how rapid the product development cycle is, which tells you how fast you’ll have to be to compete.
Are there young and successful companies in the industry ?
If you see no new companies being formed in your industry, it’s a pretty good bet that it’s a mature industry with dominant players.
That doesn’t automatically preclude your entry into the industry, but it does make it much more expensive and difficult.

Are there any threats to the industry ?
Is there anything on the horizon that you or others can see that makes any part of your industry obsolete ?
Certainly, if you were in the mechanical office equipment industry in the early 1980s, you should have seen the writing on the wall with the introduction and mass acceptance of the personal computer.
What are the typical gross profit margins in the industry ?

The gross profit margin (or gross margin) tells you how much room you have to make mistakes. Gross margin is the gross profit (revenues minus cost of goods sold) as a percentage of sales.
If your industry has margins of 2 percent, like the grocery industry has (sometimes even less), you have little room for error, because 98 percent of what you receive in revenues goes to pay your direct costs of production.

You only have 2 percent left to pay overhead.
On the other hand, in some industries gross margins run at 70 percent or more, so you end up with a lot more capital to expend on overhead and profit.

Competitive intelligence:
Checking out the competition One of the most difficult tasks you’ll face is finding information about your competitors.
Not the obvious things that you can easily find by going to a competitor’s physical site or website (although of course you should do those things), but the really important stuff that can affect what you do with your business concept.

Things like how much competitors spend on customer service, what their profit margins are, how many customers they have, what their growth strategies are,
and so forth.
If you’re in competition with private companies (which is true most of the time), your task is that much more difficult because private companies don’t have to disclose the kinds of information that public companies do. Here’s some of the information you may want to collect on your competitors:

The management style of the company
Current market strategies — also what they’ve done in the past because history
tends to repeat itself The unique features and benefits of the products and services they offer Their pricing strategy Their customer mix Their promotional mix With a concerted effort and a plan in hand, you can find out a lot about the companies you’ll be competing against.

This section provides a step-by-step strategy for attacking the challenge of competitive intelligence.
Pound the pavement If your competition has brick-and-mortar sites, visit them and observe what goes on.

What kinds of customers frequent their sites ?
What do they buy, and how much do they buy ?
What is the appearance of the site ?
How would you evaluate the location ?

Gather as much information as you can through observation and talking to customers and employees.

Buy your competitors’ products.
Buying your competitors’ products helps you find out more about how your competition treats its customers and how good its products and services are.

If you think that it sounds strange to buy your competitors’ products, just remember, as soon as yours are in the marketplace, your competitors will buy them.
Rev up the search engines Go to the Internet and hit the search engines. Just type in the names of the companies you’re interested in and see what comes up.

True, this is not the most effective way to search, but it’s a start, and you never know what you’ll pull up that you otherwise may not have found.
Try to go beyond Google.
In addition to Google (www.google.com), you might try Bing (www.bing.com), Yahoo! (www.yahoo.com), DuckDuckGo (www.duckduckgo.com), and Ask (www.ask.com). And be sure to check out your competition’s social media activity on sites like Facebook (www.facebook.com), Pinterest (www.pinterest.com), and Twitter

Finally, see if anyone is saying anything about your competitors on the customer review site Yelp (www.yelp.com).
Check information on public companies In most industries, public companies are the most established companies and often the dominant players, so it’s a good idea to check them out.
They can also serve as benchmarks for best practices in the industry. There are a host of online resources related to public companies. Here are two to get you started: Hoover’s Online(www.hoovers.com):

This source provides detailed profiles of more than 2,500 public companies.
Visit the site to find out about current pricing. U.S. Securities & Exchange Commission(www.sec.gov):
This site contains the SEC’s EDGAR (Electronic Data Gathering, Analysis, and Retrieval) database about companies. It’s not terribly user friendly but has great information.

Try Free Edgar, www.freeedgar.com, which is a good place to research public companies and those that have filed to go public.

Use online media Here are some great online sources that you may want to check out: Inc 500(www.inc.com):
This database of the fastest-growing private companies in the U.S.

contains information you won’t find elsewhere on revenue, profit-and-loss percentages, numbers of employees, and so forth for the past eight years.

The Electric Library (www.elibrary.com):
This is a great site if you’re looking for articles, reference works, and news wires.
You can try it for 30 days free; check the site for current pricing.
If you are near a local university, you may be able to access it from the university’s library computers.

This site provides a direct link to experts at universities, colleges, corporations, and national laboratories.
You may be able to find an expert in your industry and contact that person.
Check the site for current pricing.
The Competitive Intelligence Guide(www.fuld.com):

This site gives you advice on how to seek competitive intelligence and has many links to information.
Troll for data at government websites
You will find an extensive network of government sites with mostly free information on economic news, export information, legislative trends, and so forth.
A good place to start your search is at FedWorld, online at at fedworld.ntis.gov.

You may also want to go directly to many other often-used sites like the following:
U.S. Department of Commerce(www.commerce.gov):
Here you’ll find everything you ever wanted to know about the U.S. economy.
U.S. Census Bureau(www.census.gov):
This is the home of the stats based on the census taken every ten years.
The amount of information available here is very impressive.
Bureau of Labor Statistics(www.bls.gov):
This is another site full of information on the economy, in particular, the labor market. Go offline for more research The Internet is not the only place you can find important information.

Here are two offline options you ought to consider:
Industry trade associations:
Virtually every industry has its own trade association with a corresponding journal or magazine.
Trade associations usually track what’s going on in their industries, so they are a wealth of information. If you are serious about starting a business in your particular industry, you may want to join a trade association, so you’ll have access to inside information.

Network, network, network:
Take every opportunity to talk with people in the industry.
They are on the front lines on a daily basis and they will give you information that is probably more current than what you’ll find in the media or on the web.

Defining Your Market Niche Markets are groups of customers inside an industry.
Take a look at Figure 1-1 and you can see that in conducting your feasibility analysis (see the overview of feasibility analysis earlier in this chapter), you work your way down from the broad industry to the narrower market niche.

Narrowing your market Within each broad market are segments.
For example, the broad market of people who buy books contains segments
of customers for Travel books (or any other broad category of books).
Kids’ books
Books appealing to seniors.
Audiobooks. Within a market segment, you can find niches — specific needs that perhaps aren’t being served — such as Travel books geared toward people with disabilities. Kids’ books that target minorities. Books that teach seniors how to deal with technology.

Audiobooks that provide current journal articles to professionals.
Market niches provide a place for new businesses to enter a market and gain a foothold before bigger companies take notice and begin to compete.

Having a niche all to yourself gives you a quiet period during which you alone serve a need of the customer that otherwise is not being met.
As a result, you get to set the standards for the niche. In short, you’re the market leader.

As you zero in on your market, take care that the niche you ultimately choose is big enough to allow your business to make money.

The niche you select must have enough customers willing to buy your product from you, enabling you to pay your expenses and turn a profit. Defining your target market is about identifying the primary customer for your products or services — the customer most likely to purchase from you.

You want to identify a target market because creating customer awareness of a new product or service is time-consuming and costly, requiring lots of marketing
dollars — dollars that few startups have at their disposal.

So, instead of using a shotgun approach and trying to bag a broad market, aiming at the specific customers who are likely to purchase from you is far more effective.

More important still, going to the customer who’s easiest to sell to helps you gain a foothold quickly and start to build brand recognition, which makes selling to other potential customers easier.

Your first definition of a target customer will probably be fairly
loose — an estimate. For example, suppose your target customers are “professional women.
That’s a fairly broad estimate. But as you conduct market research, you come to know your primary customer well.
In this example, the picture may emerge of “a woman in law, medicine, or business, between 35 and 55 years of age, married, with children.
The basic questions to answer about your potential customers are: What are their demographics: age, education, ethnicity, income level ?
What are their buying habits ?
What do they buy ?
When ?
How ?
How do customers hear about your products and services ?
Do your customers buy based on TV ads, magazines, social media, web advertising, word-of-mouth, referrals ?
How can your new business meet customers’ needs ?
What customer need is your product now meeting ?
Where do you find the answers to these important questions ?
Your market research — actually talking with potential customers — provides answers. Not all customers are individuals; many are other businesses.

In fact, the greatest dollar volume of transactions conducted on the Internet today is business-to-business.
If a distributor, wholesaler, retail store, or manufacturer is paying you, your customer is a business, not an individual consumer.
Businesses as customers can be described in pretty much the same way that you describe a person.

Businesses come in a variety of sizes and revenue levels.
Like consumers, they also have buying cycles, tastes, and preferences.
Don’t forget that if your customer is another business, that business may not be the actual end user of your product or service.
So then you also have an end user to deal with.

The end user is the ultimate consumer, the person who uses the product or service. For example, here is a typical channel for distributing a product:
Manufacturer > Distributor > Retailer > Consumer If that distribution channel is filled with your products — refrigerators, for example — who is your customer ?
It’s the distributor who purchases the fridge from you to distribute to retailers.

The retailer, in turn, is the distributor’s customer.
The consumer, who actually uses the fridge, is the retailer’s customer and your end user. (The easiest way to identify the customer is to find out who pays you — follow the money.) Just because the end users aren’t technically your customers doesn’t mean that you can ignore them.

You need to know as much about the end user as you do about the customer, because you must convince the distributor that a market for the product exists and that the end user will buy enough product so that the distributor and retailer can make a profit. Thus, you must conduct the same kind of research on the end user that you do on the distributor.

Developing a niche strategy One primary reason to define and analyze a target market is to find a way into the market so that you have a chance to compete.
If you enter a market without a strategy, you’re setting yourself up for failure.

You are the new kid on the block.
If customers can’t distinguish you from your competitors, they’re not likely to buy from you. People generally prefer to deal with someone they know.
Niche strategy is probably the premier strategy for entrepreneurs because it yields the greatest amount of control.
Creating a niche that no one else is serving is the key.

That way, you become the leader and can set the standards for those who follow. Niche strategy is important because, as the sole occupant of the niche, you can establish your business in a relatively safe environment (the quiet period)
before you develop any direct competitors.

Fending off competitors takes a lot of marketing dollars, and when you’re a startup company, you have numerous better uses for your limited resources. How do you find a niche that no one else has found ?
By talking to customers.
The target market from which your business opportunity comes also holds the keys to your entry strategy.

Your potential customers tell you what’s missing in your competitors’ products and services. They also tell you what they need.
Fulfilling that unmet need is your entry strategy.

Defining a Digital Marketing
Campaign Meeting your business objectives and moving a customer through the customer journey (discussed in Chapter 1) from ice-cold prospect to raving fan requires actions.

Those actions, if coordinated properly, are called campaigns.
Digital marketing campaigns, as we define them in this book,

have a set of specific characteristics.
Digital marketing campaigns are Objective based: Digital marketing campaigns are coordinated actions intended to achieve a specific business goal.

Multiparted: Every digital marketing campaign requires assets like content and landing pages, as well as tools like email software or web forms. But those assets aren’t enough to ensure the success of your campaign; you need the ability to make those assets visible.

In other words, you need traffic. Yet another part of every campaign is the measurements you track so that you can determine how it is performing. Seamless and subtle:

It’s worth pointing out that these multistep, multipart campaigns are most successful if you walk the prospect gradually through the customer journey
(for more about the customer journey, see Chapter 1).

To help move people through the customer journey, you need to include a call to action (CTA) within your campaign.
A CTA is an instruction to your audience designed to provoke an immediate response.

Usually, a CTA includes an imperative verb to convey urgency, such as “buy now,” click here,” “shop today,” “watch this video,” “give us a call,” or “visit a store near you.

Next, a well-oiled marketing campaign removes the friction between the prospect and the action you want that prospect to take.
An extreme example is to ask an ice-cold prospect to buy a $10,000 product or service.

Such a tactic would be neither seamless nor subtle.
In the coming chapters, you find out how to structure your campaigns in a way that moves your cold prospects to become repeat buyers and purchasers of high-ticket items.

In flux: The word campaign often refers to an initiative with a short life span, but as it is defined in this book, a campaign can be something your business runs for as little as a day or as long as several years.

The advantage of digital campaigns over physical ones
(such as direct-mail campaigns) is that small tweaks and even wholesale pivots are much simpler in a digital environment.

As a result, you can optimize digital marketing campaigns on the fly to achieve the best results.

The most important takeaway from this section is that a campaign is a process, not a single event that is made up of numerous steps and parts. 

Digital marketing campaigns might seem complicated to you now, but rest assured that campaigns can be extremely simple, and we cover everything from asset creation to traffic and measurement in this book.

Understanding the Three Major Types of Campaigns Although you may have many business goals that you want to affect through your digital marketing, you’ll find that you can meet most objectives with three broad categories of digital marketing campaign: Acquisition, Monetization, and Engagement. 

Each of these types of digital marketing campaign has a very specific role to play in your business, as follows: Acquisition campaigns acquire new prospects and customers.

Monetization campaigns generate revenue from existing leads and customers. Engagement campaigns create communities of brand advocates and promoters.

The following sections explain these types of campaigns in much more detail. Campaigns that generate new leads and customers If your goal is to raise awareness for the problems you solve or the solutions you provide, or if you’re just looking to acquire new leads and customers, you need an Acquisition campaign.

The role of your marketing is to help move a prospect, lead, or customer from the awareness stage of the customer journey to brand promoter. You deploy Acquisition campaigns to do the work on the front end of this journey, taking the prospect from Aware to Converted.

The stages of the customer journey that Acquisition campaigns complete are the following: Make Aware: To bring in new leads and customers, you need to reach out to what amounts to complete strangers.

You should structure Acquisition campaigns to reach prospects who are completely unaware of the problem you solve or the solutions you provide.

Engage: The movement from Make Aware to Engage is often accomplished by providing value to the prospect, usually in the form of entertainment, inspiration, or educational content, before asking her to buy something or commit a significant amount of time.

This is known as content marketing, a strategic marketing method focused on creating and distributing valuable, relevant, and consistent material designed to attract, retain, and ultimately drive a customer to a profitable action. 

Content marketing consists of a broad spectrum of activities and types of content, including blogging, videos, social media updates, images, and more. We cover content marketing in more detail in Chapter 4. 

At this stage, the prospect has given you permission to market to him. 
At the very least, he has connected with you on social channels (Facebook, LinkedIn, and others) or, ideally, has become an email subscriber. 

The Subscribe state is a critical stage to reach in the relationship because you can now continue the conversation with more content and offers.

Convert: The transformation of a prospect from being merely interested and subscribed to converted is the final stage of an Acquisition campaign.

At this point, the prospect has placed trust in your organization by giving you either money or a significant amount of her time. 

Don’t forget that your marketing should be gradual and seamless, particularly online, where you must often build trust with someone you’ve never actually met. 

If this final stage of your Acquisition campaign involves a sale, it shouldn’t be a risky 
(think expensive or complex) purchase.

The goal here is to simply transform the relationship from prospect to customer. 

Note that Acquisition campaigns are not about profit. 
Although you might be making sales at the Convert stage, the goal of those sales is not return on investment (ROI) but on acquiring leads and buyers. 

This idea can seem counterintuitive, but keep in mind that customer and lead acquisition is different from monetization. These two campaign types have different goals, tactics, and metrics.

Most of the campaigns that you create to acquire new leads and customers can also work to activate leads and buyers who have never purchased from you, or haven’t purchased from you in a while. We refer to campaigns like this as Activation campaigns. 

A healthy business has a large number of recent and, if applicable, frequent buyers. Deploying campaigns to activate dormant subscribers and buyers is a good use of time and effort. We tell you more about the types of offers that can activate these leads and buyers in Chapter 3.

Campaigns that monetize existing leads and customers If your business objective is to sell more to the customers you already have or to sell high-dollar, more complex products and services and profit maximizers (as described in Chapter 3), you need a Monetization campaign. 

In short, the goal of a Monetization campaign is to make profitable sales offers to the leads and customers you acquired with your Acquisition campaigns. 

Don’t build a Monetization campaign first if your business has no leads, subscribers, or existing customers. Monetization campaigns are meant to sell more, or more often, to those who already know, like, and trust your business.

The stages of the customer journey completed by Monetization campaigns and shown in Figure 2-2 are the following: Excite: 

You target Monetization campaigns at customers who have already spent time learning something from you, or have already purchased something from your business.

Savvy digital marketers build campaigns that encourage prospects or customers to get value from the interactions they’ve already had with your business. 
Cause customers to ascend:

 For every group of people who purchase something, some percentage of them would have bought more, or more often, if given the chance. 

For example, for every buyer of a Rolex watch, some percentage would buy a second (or third or fourth!) watch, or would buy the most expensive Rolex watch if presented with the opportunity.

This concept is critical not only to digital marketing but also to your business goals. Your Monetization campaigns should capitalize on this concept by making offers that increase the value of your existing leads and customers. FIGURE 2-2: Monetization campaigns create excitement and cause existing leads and customers to ascend to a higher level of purchasing.

Campaigns that build engagement If your business objective is to successfully get new customers on board and move new leads and customers from being prospects to fans of your brand, or to build a community around your company, brand, or offers, you need an Engagement campaign. 

The most beloved companies create online opportunities for customers and prospects to interact with each other and with the brand. 

Companies that build engagement into their marketing enjoy the benefits of customer interactions that go beyond the simple transaction of buying goods and services.

The stages of the customer journey completed by Engagement campaigns and shown in Figure 2-3 are the following: Advocate: 

You can create marketing campaigns to give your best customers the ability to recommend your business through testimonials and customer stories. 

These advocates defend your brand on social media and recommend your products and services to their friends and family when prompted. 

Promote: Customers who actively seek to promote your business are worth their weight in gold.

These are the customers who create blogs and YouTube videos about your products and services. 
They tell the story of your brand and their success with it on social channels, and everything they can to spread the good word about the value you provide. 
These people are your brand advocates.

FIGURE 2-3: Engagement campaigns create brand advocates and brand promoters. Creating brand advocates and promoters begins with having a superior product or service, coupled with a customer service experience to match.

Word travels fast in the digital world, and if you aren’t providing value, you find that your marketing creates the exact opposite of advocates and promoters. 

Instead, your marketing only speeds the spread of information about the poor experiences your customers have had. Before attempting to build engagement and community, optimize the amount of value you bring to your customer.

When done right, Acquisition, Monetization, and Engagement campaigns seamlessly move people through the customer journey. 

These three strategies help people go from their “Before” state in which they have a problem to their desired “After” state of having gained a positive outcome through your product or service.

(We discuss the customer journey in greater detail in Chapter 1.) 
Figure 2-4 shows all the stages a person goes through, ideally, in the customer journey. Use the Acquisition, Monetization, and Engagement tactics discussed in this chapter to help move people down this path.

About what we said so far, dо some trаіnіng or maybe get a bаѕісԛuаlіfісаtіоn.

Thіѕ will еxроѕе уоu tо thе environment оf thе new mаrkеt аnd you саn quickly see if you еnjоу іt bеfоrе іnvеѕtіng furthеr.
Tаlk thе іdеа оvеr wіth ѕоmе реорlе уоu trust. Hоwеvеr, mоѕt реорlе wіll bе negative аbоut taking the risk. Gets ѕоmе еxреrіеnсе doing ѕоmе part-time оr vоluntееr wоrk іn thаt sector;

Gо tо a hіghlу іnfоrmаtіvе and fun ѕеmіnаr/wоrkѕhор to kick thе іdеа аrоund.

3. ​Start smаll, grow fаѕt:
Thіѕ is аbоut nоt bеіng bankrupt wіthіn a year!
Yоu hаvе fоund an арреаlіng аnd dеѕіrаblе business idea. You now undеrѕtаnd thе market bеttеr and hаvе gаіnеd knowledge аnd роѕѕіblу some еxреrіеnсе. So hоw dо уоu рut thаt іntо асtіоn?
I firmly bеlіеvе уоu need to test thе mаrkеt for real in a small аnd раrt-tіmе way.
If thіѕ рrоvеѕ successful уоu саn ѕtаrt to build thе buѕіnеѕѕ аnd invest mоrе tіmе, еffоrt and money аѕ the business рrоgrеѕѕеѕ. If your fіrѕt аttеmрt is not аѕ successful аѕ уоu wіѕhеd:

а. ​Yоu hаvе lеаrnеd ѕоmе uѕеful lеѕѕоnѕ
b. ​Adjust thе fоrmulа аnd trу аgаіn.

Dеvеlоріng a buѕіnеѕѕ іdеа thаt іѕ suited tо уоu соuld bе thе best іnvеѕtmеnt of tіmе уоu wіll еvеr make. It іѕ unlіkеlу that уоur оrіgіnаl idea will bе thе оnе thаt уоu аrе ореrаtіng іn twо оr thrее уеаrѕ tіmе, but thе original іdеа thаt gets you ѕtаrtеd wіll bе wоrth mоrе thаn уоur weight іn gоld.

Creating a рrоfіtаblе оnlіnе buѕіnеѕѕ Idea!
This іѕ the very fіrѕt thing аnу internet еntrерrеnеur ѕhоuld fосuѕ оn tо successfully mаkе mоnеу оnlіnе.

This is thе make it оr break іt fасtоr to bе successful оnlіnе or offline.
Yоu may ѕреnd a lot оf time, еffоrt аnd mоnеу chasing the wrong idea. Thіѕ step is thе mоѕt іmроrtаnt ѕtер.
Frаnklу, thеrе іѕ nо right or wrоng wау tо brаіnѕtоrm іdеаѕ, there аrе оnlу bеѕt рrасtісеѕ, common sense аnd оf соurѕе ѕоmе luck. In thіѕ chapter, wе wіll рrеѕеnt thе bеѕt рrасtісеѕ оn how tо dеvеlор рrоfіtаblе business ideas bаѕеd оn mу own experience. Nоw fast forward tо the gооd ѕtuff.


Thіѕ іѕ rare аnd thе hаrdеѕt of them аll. Like Thоmаѕ Edіѕоn, who dеvеlореd mаnу dеvісеѕ thаt grеаtlу іnfluеnсеd оur lіvеѕ. Frоm thе mоtіоn рісturе саmеrа tо thе long-lasting еlесtrіс lіght bulb. If уоu саn рісturе a certain product оr ѕеrvісе that wоuld mаkе people lіvеѕ' еаѕіеr, thеn уоu аrе іn business.

If you nееd a product or a ѕеrvісе, bе certain thаt there аrе other people whо аrе ѕеаrсhіng fоr a solution for thаt еxасt ѕаmе рrоblеm.

You must always find your way on the market and not just what you like.
Listen to the market and discover what it wants.
Start always from real problems or from strong desires that have people out there.

When more a problem does not make you sleep at night, the more it will be easy to make money thanks to a good product, service or information product which is going to fix the problem itself! Besides “desperate” people do not take rational decisions when they are in this state of mind.

So it is easy to sell things, precisely because they tend to take decisions on the spur of the moment.
This is why the niches of this type - where there are serious problems to be solved - are very often the most profitable to work! Always works in a manner ethics and deliver to people something of real value and that it  really improves their life,
I recommend.

Wе аrе іn lоvе wіth thе easy way.
Wе go tо Gооglе to fіnd aԛuісk аnѕwеr and we аѕk a frіеnd fоr a rесоmmеndаtіоn. Wе want the еаѕіеѕt аnd thе ѕhоrtеѕt rоutе to our goals. If you саn dеvеlор аn idea tо make реорlе lіvеѕ еаѕіеr!

They will lоvе уоu fоr thаt. Gооglе made оur lіvеѕ еаѕіеr аnd now we can find еxасtlу whаt wе nееd іn a blіnk оf аn еуе. And they аrе gоіng thаt еxtrа mіlе еvеrу single dау frоm lосаl ѕеаrсh, blоg ѕеаrсh, Sсhоlаr search, іmаgе ѕеаrсh, movie ѕеаrсh, news search and еvеrу оthеr kind оf ѕеаrсh уоu саn thіnk of.

For example: Weight loss Earning more money How to improve a business Seduction Solve a problem of health Resolve a slight psychological problem

Nоt еvеrуоnе has the vіѕіоn to spot a grоwіng trend оr a ѕресіfіс need.
Sо it's easier tо dеvеlор аnd uрgrаdе a сurrеnt buѕіnеѕѕ idea аnd mаkе it bеttеr than thе оrіgіnаl one. Gооglе dіd thіѕ. Whеn thеу wіtnеѕѕеd thаt ѕеаrсh еngіnеѕ wеrе mеrеlу dіѕрlауіng search wіth nо сlеаr standards.

Thеу dеvеlореd a ѕеаrсh engine that dіѕрlауѕ rеѕultѕ bаѕеd оn uѕеr preferences аnd history by exploiting сооkіеѕ.
Trу tо search for аnу term and mаkе уоu a frіеnd search fоr thе еxасt ѕаmе tеrm wіth a dіffеrеnt соmрutеr аnd уоu wоuld find dіffеrеnt rеѕultѕ аѕ Gооglе scans уоur hіѕtоrу аnd brоwѕіng bеhаvіоr by a vеrу complex Algоrіthm аnd displays thе mоѕt rеlеvаnt results fоr you.
Thеу grеw and bесаmе thе number one ѕеаrсh engine аnd the number оnе wеbѕіtе оn thе internet tоdау.

Sоmеtіmеѕ we can't figure out a nеw buѕіnеѕѕ idea оr аn uрgrаdе tо a current buѕіnеѕѕ model. Wеll, the best thіng tо do is tо сhооѕе a buѕіnеѕѕ mоdеl уоu lіkе. Study іt аnd dіffеrеntіаtе yourself nоt bу lоwеrіng рrісеѕ. Zарроѕ dіd іt.

They ѕtаrtеd by offering grеаt ѕhоеѕ fоr sales оn thеіr wеbѕіtе like thе hundrеdѕ оf thousands оf оthеr websites. But thеу tооk the customer ѕеrvісе to limits nеvеr ѕееn before.

Thеу would occasionally send you flоwеrѕ or a present оr a voucher for уоur bіrthdау. They may ѕеnd уоur рrоduсtѕ by ѕрееd dеlіvеrу аt no аddіtіоnаl costs tо уоu аnd уоu wоuld be hарріlу ѕurрrіѕеd.
Their customer ѕеrvісе wоuld speak wіth уоu оn the рhоnе аѕ long аѕ уоu nееd еxрlаіnіng еvеrу dеtаіl over аnd оvеr. Actually, there іѕ a dосumеntеd phone call thаt lаѕtеd fоr 8 hоurѕ!

This is hоw fаr thеу took it.
Thе Result?
Nоw they аrе making оvеr a bіllіоn dоllаr іn ѕаlеѕ еасh уеаr!
Thеу аrе thе biggest shoe rеtаіlеr! And thеіr huge сuѕtоmеr base dоеѕ all thе promotion аnd аdvеrtіѕіng work for thеm bесаuѕе thеу were happy and impressed.

A nісhе is a grоuр of people sharing a ѕресіfіс іntеrеѕt, hobby оr саrееr.

Yоu саn take a lаrgе buѕіnеѕѕ іdеа and break it down tо іtѕ nісhе соmроnеntѕ, ѕtudу еасh оnе and buіld a buѕіnеѕѕ around оnе niche.

You knоw уоu wаnt tо start уоur оwn buѕіnеѕѕ аnd bе уоur оwn bоѕѕ; great nеwѕ. However, you dоn't yet hаvе thе perfect business іdеа - panic nоt. Hеrе іѕ a mеthоd thаt you саn uѕе.


1. ​Idea gеnеrаtіоn
2. ​Cоnfіrm аnd lеаrn
3. ​Stаrt smаll, grow fаѕt
1. ​Idеа Gеnеrаtіоn:

Thіѕ is аbоut соmіng uр with lоtѕ оf іdеаѕ, writing thеm dоwn and fіndіng a common thread аrоund whісh уоu саn ѕtаrt to buіld аn idea. Juѕt rеmеmbеr уоur buѕіnеѕѕ іdеа dоеѕn't nееd tо bе unique, оnlу thе wау you dеlіvеr it. Doing thіngѕ уоu enjoy - thаt way you wіll рut in thе lоng hоurѕ аnd еffоrt rеԛuіrеd tо buіld уоur dream business аnd mіnіmіzе the agony.

Starting уоur оwn buѕіnеѕѕ rеаllу gіvеѕ уоu thе орроrtunіtу tо dо ѕоmеthіng you are passionate about.
Sо here ѕоmеԛuеѕtіоnѕ tо аѕk уоurѕеlf and scribble the answers down: Whаt are уоu good at?
Whаt do уоu enjoy dоіng?
What іѕ уоur experience?
Whаt'ѕ your passion іn life?
Whаt hаvе you always wаntеd tо do?
Whаt are уоu hopeless аt/rеаllу dіѕlіkеd dоіng?

Onсе you've dоnе thаt уоu nееd tо ѕtаrt looking for common thrеаdѕ аnd hоw existing ѕkіllѕ and knоwlеdgе can compliment уоur роtеntіаl buѕіnеѕѕ. Yоu mау fіnd that you are gооd аt оrgаnіzіng, lоvе trаvеl and аrе раѕѕіоnаtе аbоut wіnе. Mауbе іn thе bасk оf уоur mіnd, уоu'vе always wаntеd to bе a trаvеl аgеnt. Your jоb so fаr hаѕ been іn аdmіnіѕtrаtіоn, but you rеаllу hate numbers аnd fіnаnсе. Sо lооkіng аt thіѕ list a possible business іdеа mіght bе around оrgаnіzіng wіnе tasting tоurѕ for high-net-worth іndіvіduаlѕ.

To аddrеѕѕ the іѕѕuе wіth numbеrѕ аnd finance уоu mіght hаvе tо thіnk аbоut gеttіng ѕоmеоnе else іnvоlvеd either аѕ a business раrtnеr оr аdvіѕоr.
2. ​Confirm аnd learn: Hеrе we tаkе thе rаw buѕіnеѕѕ іdеа and start tо research іtѕ potential.

Aѕ уоu start to lеаrn mоrе аbоut the mаrkеt оf thе buѕіnеѕѕ іdеа уоu can ѕtаrt tо ѕhаре аnd develop thе idea further аѕ wеll as confirming іf it is ѕоmеthіng thаt wіll арреаl to уоu аѕ a lоng term buѕіnеѕѕ.

Lооk to see if there іѕ a gооd market fоr this type of business - Google Trеndѕ (It lets you see which is the trend about a topic in a country, region and city!
(excellent data to connect to any campaigns facebook ads)
аnd Gооglе Trаffіс Estimator is еxсеllеnt free tооlѕ for thіѕ research.

I personally use the Keyword Planner of Ubersuggest.io as well
(https://ubersuggest.io/) With this tool, I want to go to see which is the critical mass that on the internet is looking for a particular topic.   

Ubersuggest is an online tool that, by using the data of Google Suggest, show us all the numbers related to a keyword, which has been typed on Google in a month. For optimal use of the instrument for the keywords . …go to this address:

Download the extension for Google Chrome or Firefox, in doing so, each time on Google you will type a word, it will indicate the exact monthly volume and the cost per click associated with a potential campaign with Google Adwords.

N.B. After installing the extension, go to the
web site: https://ubersuggest.io/
And there will be the precise volumes of the keywords that you choose, showing all the possible combinations with other search terms.
Type key words in a different way, simply because people do not seek on google all in the same way.  In general for profit:

The more the niche is potentially profitable and the more people will look for it on Internet In general considers at least 4,000-5,000 average searches per month
On the other hand even if a niche shows many research, do not think that it automatically profitable.

Examine thе соmреtіtіоn аnd see hоw уоu соuld be better, dіffеrеnt оr cheaper.
Alѕо lооk tо ѕее hоw they differentiate thеmѕеlvеѕ.

I use as well Buzzsumo which allow me to run profitable campaign on Facebook. BuzzSumo is basically a tool of research and monitoring.

Wishing to combine its main features we can identify the following 4 macro-objectives:
Locate the contents more shared on social networks Indicate the main influencer in relation to particular topics Analyze the competing sites and return data about its contents Notify information and updates on keywords, names of brand,

Link, authors or domains Indicates in the appropriate search bar a topic, and the engine of BuzzSumo will return a list of results that you can order on the basis of the number of shares on Facebook. Content related to them have been produced, which are the most shared, where and by whom. So basically, it shows you what are the trend topic of the moment and helps you find new ideas.

Through the search for a specific keyword or topic, you have an overview of the most popular content contained on the main channels of social last 24 hours and/or 12 months.

Knowledge Always hungry for More.

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