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Starting an Internet Home Business? Avoid These Common Mistakes

Aug 25, 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.

Internet home business entrepreneurs need to find a niche market looking for their product before they decide on a product to sell online.

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.

To avoid this fatal mistake follow these three simple steps.

Step #1: Jot down all 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.

If you don't find your internet business idea enjoyable you will not be motivated to stick with it and put in the necessary work needed to make it a success. Before finding your underserved niche make sure to brainstorm your interests and let them be your guide.

You can find unique skills a variety of ways. Knowing how to pass the exam required to be a paramedic is a skill on which an internet business could be started. Think of your own unique experiences. Maybe you collect stamps or sew quilts - these are all examples of unique niche markets.

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!

Then go through the list and pinpoint where your particular areas of skills and interest lie. When you've got a few different topics, you'll be ready to do some research into potential businesses.

Step #3: Find your niche

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

A small, untapped and specialized niche market can be the source of big revenie 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.

People do not usually go online to buy (at least right away), but to find answers to a problem.

The basis for your successful internet home business will be when you find the group of people who are looking to solve the same problem without much luck. This will be your "hidden treasure".

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

To be successful you need to drill down and down further and be patient. Also, don't overlook any possible avenues!

How do you find these markets?

You can find out exactly what people are searching for online by using a simple tool, such as BeBiz. Are people searching for your potential product and not finding it? You may have just found your niche!

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. Can you easily reach and define the market you are validating? Most potential market groups will have a place they congregate on the internet. Use places such as forums, discussions boards, club sites and online groups to analyze exactly who your potential customer is.

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 big enough to be profitable, but small enough that there aren't many competitors?

The market needs to have enough people in it to make it worth your while, but small enough so that not a lot of competitors have already moved in. If you find a lot of competition who are well supplied, well established and well funded - this is not a good market! Keep drilling down looking for a smaller, more defined niche.

3. Do your potential customers have money they are willing to spend?

It is a good sign if there is already some competition selling products to your maket - this means these people are willing to buy. It will be hard to sell to people in a market where there are already lots of free sites or free products.

4. Is your niche willing to spend money on your product in order to solve their problem?

You want a potential market that is so passionate about their interest that they eat, sleep and breath it. They will want ALL the information they can get on the subject.

Think about video gamers or antique collectors... their obsessive passion is a big reason those markets are so profitable!

In closing

You need to follow these 3 steps when starting an internet home business. You will be able to create a business you are passionate about if you find a niche market based on your experiences. You can be confident your internet business will be profitable if you validate your market BEFORE you create a product.

It's a simple, but effective, formula and it will set you on the road to internet business success.
About the Author
Derek Gehl, CEO of Internet Marketing Center, helps Internet business owners on how to create incomes online. Get the proven Internet Marketing strategies to quickly start an online business.
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