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6 Basic Rules To Starting An Online Business

By Karl Mills
Posted Tuesday, December 21, 2004

What you should know before you start your own business. So here you are! you've been surfing around the Internet for quite some time. Or you're new and are thrilled by what it has to offer. You say to yourself "Hey! Look at all those people earning big money on the internet" and you decide you want to be a part of it.

So far so good. After you've made that first decision you take a closer look. You know how to use a search engine so you type in something like 'home business', 'online business' or 'work at home'. OUCH! there are literally 'thousands' of addresses to choose from! Your first thought "if there are so many already in business what chance have I got?"

Not to be discouraged you tell yourself "if they can do it then so can I" Now that was your first step to committing yourself to take action. It means you've expressed the will to start an online business. Even though you're not completely aware of it at this stage.

My friend. I can't stress this enough! The next steps you then take will most certainly decide on whether you'll succeed or fail! This is the stage where most people make their biggest mistake! It doesn't take an internet guru to point that out to you. (For obvious reasons he most likely won't -but that's another story) It just takes some common sense.

Ask yourself this "when was the last time I honestly and truly got something for nothing?" I'm sure you know the answer to that one!

A business is a business is a business. No that's not a 'typo'. I just want make my point clear! Any business online or offline is built on the 6 basic rules of economics.

1. Investment
2. Market knowledge
3. Product
4. Advertising
5. Sales
6. ROI (Return Of Investment)

Let's take a look a these 6 basic rules.


As I stated earlier - you can't expect to get something for nothing! To start an online business you'll be investing in

a) Your own website (this is your 'shop' or 'store') b) Advertising
c) Tools
d) Product/s to sell


Here you're going to have to do some serious researching. Your market will depend on the product you're selling.

Example: baby diapers is a specific product aimed at young mothers. Toilet paper on the other hand is a general product everyone needs.

My tip: use the search engines - start with google. Type in -your product- and see what comes up. You can even type in something like 'marketing reports -your product-' or 'market -your product-'. You get the idea.


This is without doubt the major decision in your online business. What can I sell? All I can say is - the list is almost endless! You can decide to sell digital goods - ebooks, software, information, reports anything that can be downloaded from your host's server.

You can get 'master resale' rights to many digital products available on the internet and sell them for the complete price. (As an affiliate reseller you only get a part of that price as commission!)

Or non-digital goods. This is much easier than it may appear. There are thousands of companies looking for reseller outfits on the internet.

For example: Drop-shipping wholesale & closeout products. Here's a good definition for you: It's the shipping of merchandise from a supplier directly to your customer, to minimize your inventory and overhead expenses. In other words you only pay for what you've already sold!


No matter how good your product or how wonderful your website (store) is. If nobody knows about it then you're stuck!

One way to make yourself known is by advertising in ezines. If you're not much of a writer and don't know how to write gripping ad copy to introduce your product. Get someone to do it for you. There are some very good ad copy writers available on the internet but they aren't cheap!

Get your website on the search engines. Get a good placing by optimizing your website. There are various ways to do this but it's too much to explain it all in this report.

Build a mailing list. To do this you can publish a newsletter with information and news about your product or line of products and then admit your newsletter to directories. Another way is to 'buy' quality leads. But before you rush out and buy leads make sure the leads you buy will be accepted by your autoresponder service. By my experience they won't accept "Opt-in" or "Safelist" leads.


If you don't 'sell' you won't earn money! The stronger the competition is for your product the harder it'll be to sell it.

If you have a 'niche' product - fine. I can already see you laughing all the way to the bank! A 'niche' product means you have a product for a very narrow market and your customers are practically lining up to buy.

It usually means that you're the producer or inventor of your product. Something like that almost sells itself!

For those not fortunate enough to have a 'niche' product with stiff competition everywhere. It's the ability to 'stand out in the crowd' that helps those sales.

Even though there may be thousands selling a similar product or service there's still more than enough to go around. In the next 5 years e-commerce is really going to 'take off'!

To be able to 'stand out in the crowd' you need a unique angle. Something you're offering your customers that others aren't. That could be personal consultation for example. Or quality product related give-aways. 'Loyalty discounts' is another one.

Most important of all. Your website is your sales tool! Again if you don't have the talent for writing 'sales letters' that can close the deal. Get someone to do it for you. You can also visit the sites that sell your product or service and see how they do it.
WORD OF WARNING! Don't ever copy a website and use it to sell your own product! This will get you into SERIOUS trouble! The owner of that site has a legal basis by copyright law to sue you for damage! I'm not talking about a few dollars here! A law suite like this can easily cost you $100.000 or more!

What you can do is understand the essence of a sales letter. Find the convincing points and then write your OWN. You can get good ebooks on this subject. Study them and tweak your own sales letter until you get the desired results.

6. ROI (Return Of Investment)

This is your 'bottom line'!

The simple formula: (Sales minus Investment = Profit) gives you your ROI. There are more complicated formulas with more variables that show you exactly what your ROI is on any given product or period of time.

The simple formula should be enough for any home business.

Obviously my sales (income) should be higher than my investment (expenses). The greater the difference is between both the higher my ROI will be. Your goal is to see to it that your ROI "goes through the roof"!

This is your measuring tool. Your ROI will tell you what you're doing right and what you have to improve.

In conclusion

Building a business takes a lot of effort. It means hard work, courage, commitment, persistence and discipline.

It isn't "rocket science"! Doing business on the Internet is sometimes daunting and can be very frustrating until you get your 'breakthrough'! Even then it's not all "plain sailing". Yes it will put demands on you that I hope are somewhat clearer now.

ALL those who have made it to the top started out VERY small! None of those people were 'born' to it! They got to where they are by hard work and the ability to 'roll with the punches'!

Set your target and ALWAYS keep your sights set.

About the Author
Karl Mills is the owner of Successfull Rewards Home Business "In a Box" at ( Consultant Sales Rep and Trainer with over 20 years of experience. He is also publisher of the free Online Winners Newsletter featuring e-courses, articles, tips, 'pointers' and bonus ebooks.


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