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The Most Common Mistake Made by Internet Business Entrepreneurs

Jul 9, 2008
Most entrepreneurs fail when they start an internet home business because they make one simple -- but avoidable -- mistake.

They decide on a product to sell without finding out if there's a market of potential customers who want to buy it! That's the "bass-ackwards" way to go about it.

Successful entrepreneurs start home businesses by finding under-served niche markets -- BEFORE they decide what product or service to sell.

Once a product or service is found that can service a particular niche market, the internet entrepreneur must do market research to ensure their idea is a profitable one.

So if you want to avoid the deadly mistake that causes the majority of Internet startups to fail, follow these three essential steps.

Step #1: Make a list of your interests and passions

Internet home business entrepreneurs are more likely to succeed if they base their business on something they have experience on or expertise in.

You won't be motivated to stick with a business that you are not interested in. Let your interest and passions guide you when choosing a niche market.

Maybe you have kicked a bad habit such as smoking or maybe you know what is required to pass the exam required to become a policeman - these are all unique experiences that can be used to teach others on the internet.

You should sit down and create a list of all of your jobs, hobbies, interests, volunteer work and any challenging situations you have overcome in your life. You will see this is a good place to start...don't be modest!

Pick out the areas where your particular interests lie. Once you have this narrowed down to a few different areas you will be ready to do your market research.

Step #2: Finding your niche

When it comes to finding a niche market, you've got to think small if you want to find big profit potential.

Specialized, underserved niche markets can be a source of large profit streams online.

An online niche market is a group of people who are looking to solve a common problem and not finding many or any useful results.

Most people go online to find useful information to help solve a problem, not to buy (at least right away).

And that's where you come in. Once you've found a group of people who are all looking for a solution to the same problem -- without much success -- you'll have discovered the "hidden treasure" that will form the basis of your successful internet home business!

If you think small you will avoid finding a market saturated with competition like you would in a large, general market.

So be patient and explore all the possible avenues. You've got to drill down, down, and down again -- until you finally strike gold!

How do you find these markets?

Use a keyword research tool like BeBiz.com and you kind find out exactly what people are searching for online - are people looking for your potential product? If so, you now need to think of a way to sell the niche what they are looking for.

If you start your internet home business this way, you'll know there's a market of eager potential customers out there who need your product even before you've spent any time or money creating it! But even when you think you've found a niche, you can't just rush off to create the hot product you think everyone will want to buy. The next step is to validate your market.

Step #3: Validating your market

Validating your market means confirming it has profit potential. In other words, can you actually make money from it?

To find out, ask yourself these four key questions:

1. Is your niche easily defineable and reachable? Most potential niches will already have places they meet online such as online groups, forums, discussions boards and special websites - use these places to analyze who your potential customers actually are.

You will have a much better idea if your market will be likely to buy from you once you know who they are.

2. Is the market small enough so there aren't many competitors, but big enough to be profitable?

You want a small pond, but it still needs enough "fish" in there to make it worth your efforts. If you find lots of competitors who are well established, well supplied, and well funded, back away! You should look for a smaller, more precise niche.

3. Are your customers willing to spend their money with you?

You need to know if these people actually buy stuff... so it's a good sign if there's some competition already selling products to the market. You'll have a much harder job selling to people if there are too many free products or free sites available.

4. Are they passionate enough about the problem they're trying to solve that they're willing to spend money on your product?

A motivated niche market will eat, sleep and breather their interest . You want a potential market who are so passionate that they will do anything to get all the information they can related to the subject.

Think about quilters or stamp collectors...their obsessive interest is a large reason those markets are so profitable.

Take away

It's essential you follow these three steps when you start an internet home business. If you can find a niche market based on your interests, you'll be able to create a business you're passionate about. And if you validate your market before you create a product, you can be confident your business will be profitable.

This simple, but effective formula will start you on the path to internet home business success.
About the Author
Derek Gehl, CEO of The Internet Marketing Center educates over 1.8 million Internet home business owners per month on how to create incomes of $100,000 to $2.5 MILLION or more per year online.
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