I disagree with the feeling that all businesses should invest in an online presence. This is not to say that small businesses should stay away from a web business, but too many feel frustrated when there is low
(or no) return on their investment. In this article, I identify the reasons to have a web site, the basics of setting it up, and ways to generate new income from an online venture.
The most popular reason to be online is to be online.
That might sound redundant, but more businesses are setting up a site because of the simple fact that they feel they need one. "Our competitors have one, so
we should too." Or, "I've heard that Amazon.com became an overnight sensation! We can do that!" False and false. Your competitors might be wasting money on their web site, and Amazon.com took years to develop.
Not all reasons for being online directly translate to money. Keep that in mind as you look at the following list of effective models:
Commerce - This is a "no-brainer.
Build a site to sell a product, or bunch of products. What makes it effective is more in delivery than the product itself (assuming that your product is already sellable).
Nowadays, setting up secure online purchasing is easier and cheaper than ever. Add the advantage of having an automated merchant account to process credit card orders and the whole site can act as a well-enabled salesperson.
This is actually a very powerful way to aid clients or customers by providing support online. For example, FedEx and UPS have adopted online systems to allow their customers to track packages by typing in account numbers. This is a free service, and the two
companies get a return on their investment from having an easy-to-use system that, in turn, attracts new and repeat customers. For smaller scale businesses, it may be as simple as having a feedback form or survey that allows customers to interact. Set up a message board (there
are free forums online) and answer questions through this mechanism. Message boards also allow other customers to share information. This doesn't directly translate into profit, but just think how much time you can save by providing Frequently Asked Questions online as opposed to taking the phone call yourself.
Make the site the product
Some businesses have created a virtual version to draw in separate revenue from the online community. Big business examples are ESPN and Playboy, which offer separate content for their online magazines. They charge a monthly fee for subscription and
benefit from a separate customer base. Small businesses can use this model too: FindYourDream is the best example. We charge for advertising space and sponsorship.
This is not an exhaustive list of revenue models, but these are the most prevalent on the web. The great thing about the Internet is that it is relatively uncharted territory, and every day new businesses stake their claim to a new way of making money.
Planning the site
Without getting into a manual of steps to become a webmaster (I've briefly addressed this in another article: YourBusiness.com.) I will provide a few ideas on starting the process:
- Develop a mission for what you want to achieve online. Do you want to sell homemade crafts? Do you want to exchange information about education efforts in your state (a non-profit endeavor)? Would a technical guide for using your product in an online presentation be of use to your clients?
- Determine if you have the resources within your company to set up a site. Do you have the time and skills to build a web page? If not, you may need to outsource that duty to another business. Keep in mind that
if you want to make your online business powerful, you will need to regularly update the content, so developing a relationship with web designers is necessary.
- Work hard on content. It is difficult for new sites without a big marketing budget to get new people to visit. So for each new visitor, it is important that he stays, buys, and comes again. The best way to do
that is to provide good information and deliver it well. Don't simply regurgitate a store brochure; put some thought into how you can use the medium.
Selling a product is certainly an easy model for making money out of a site. Here are some other ideas on using your web business to create revenue:
- Generate leads
Think of the web as an interactive bulletin board that weeds out unqualified buyers or information seekers. Use your web site to draw up interest in your product or service and not necessarily expect to sell through the site. If we take real estate for example, a larger success can be seen in a site that doesn't list houses for sale
alone, but that draws in the visitor to give the agent a call. Provide information on buying or selling a home or other useful content, which will make the potential client think of you as an expert. Use lead generation software and mailing lists (by asking for email address with a form on the site) and follow-up.
Even when you sell a product or service, you can also market other sites to generate some income. For example, set up a spot on various pages to allow banner advertising that can be obtained through networks or through affiliate programs. To use the same example of a
real estate agent's site, you may consider selling books from Amazon.com through an associate program. Place a recommended book on real estate and earn a 15% commission. If you find a few relationships that really fit your readership, this can help to pay for the costs associated with keeping up a web site, or turn into real profit.
- Build relationships
Profiting online does not only mean making money. Networking with others is a powerful use of the Internet. I alone have met many individuals who have shared resources, answered questions,
provided leads for business, and all other aspects of a business relationship. Many of these peer-to-peer contacts have translated into increased readership or other opportunities that would not have been otherwise available.
If your business is doing well offline, and you have the resources to invest in this new venture (because it truly is new to you), then by all means develop a web business. As I've said, it takes considerable work, patience, time, and planning to build an effective web site. Consider your reasons for going online and weigh the cost to the true benefit.
Article by Jim Dattilo, Editor of FindYourDream.
FindYourDream is a online home business magazine written by home-based people which provides strategies, resources, ideas, opportunities, and news for the home-based community.