IVA Forum :: Topic: How To Start An Internet Business In 3 Easy Steps (1/1) How To
Start An Internet Business In 3 Easy Steps (And What Holds You Back)
It’s not
quite as easy as the title makes it sound, but bear with me, this article will
explain the three steps that are the foundation of every Internet business, why
so many people go wrong and give you some realizations that might just be the
key to take your Internet business to the next level…
I’ve been
studying resources lately designed to teach Internet business, but not just
introductory materials, content that goes beyond beginners and is intended to
take you to making making millions online.
In my case
I’m interested in advanced topics that I can apply to what I do and fill my
current knowledge gaps to take the next step forwards. While hunting for those
elusive gold nugget ideas I invariably scan the introductory materials and
learn with interest how this particular person or organization cover the basics
– how they suggest you get traffic and make sales.
My studies
have led me to the conclusion that Internet business is actually quite easy.
Explained in simple terms (which I will do in a moment), the structure of a
successful online enterprise is comprised of a few components, that when linked
together can deliver hundreds, thousands and even millions of dollars in online
profits.
Easy Money
Easy As
1-2-3
While we
all have different ways of presenting what we do and the tiny details of
getting a result vary, most Internet marketing experts teach the same few
principles, which are in fact no different from what direct marketers have been
doing and teaching for decades.
It goes
something like this…
Step 1:
Traffic
All online
business models rely on traffic of some shape or form, and it’s here where I’m
always curious to find what others do to drive attention to their business, as
I’m sure you are too. In almost all cases a combination of one, two or all
three of the following techniques are the main traffic drivers that fuel the
business.
Pay Per
Click: Buying traffic from Google’s AdWords is recommended as the quickest, but
least forgiving traffic tool. Get this right and you get thousands of visitors
instantly at a cost lower than the income they return. Get this wrong and you
lose money. It’s a harsh learning curve, but for the winners the pay-off is
significant.
Search
Engine Optimization: Again Google is a significant component of this traffic
source, delivering thousands of visitors to websites that rank well. I was
tempted to call this traffic method “content marketing” but let’s keep this as
simple as possible. For those who are diligent and learn how to leverage
content, search engines offer a steady stream of free traffic – it can just
take a while to get it flowing.
Affiliates:
Affiliate marketing is the most underutilized traffic source for many Internet
businesses and that’s likely because it takes more than mechanical mechanisms
to make it work. Relationships are required, but when you get the elements
right presenting a winning offer to affiliates results is a huge traffic
windfall for you. Affiliate traffic is usually quality traffic, thus has the
highest conversion rate and best of all – it only costs you money when you make
money, so it’s a low-risk investment.
Beyond
these three core traffic techniques there are many other methods that can be
used, but if you look under the hood of most Internet businesses you will find
that one or two or all three techniques above account for the big chunk of
converting traffic.
What Is
Yaro’s Best Source of Traffic?
In case you
are wondering, my best source of traffic is affiliates followed by search
engines. For most blogs search engines will account for the largest chunk and
most dependable source of traffic, since good blogs are content driven and
search engines love content.
Step 2:
Make A Sale
Once
traffic is flowing, the next condition required for a profitable business is to
make that first sale. A targeted front end offer is the usual suggestion, in
most cases a sub-$50 priced information product, although a physical product
can work too (many late night TV infomercials use a loss-making front end offer
of a physical product that is used to identify and open communication with
customers).
The purpose
of the front end product is to generate a customer. Profit does not come from
sales of the front end product in most cases (it’s hard to get rich off a $27
ebook), rather it is raising the per customer value that results in the big
gains (more on this at step 3).
The front
end product is important because it opens the door to a potentially long term
relationship, which when done right, will result in benefits for the company
and the customer. The first sale also creates the window of opportunity for
step 3 – upsells and back-end offers.
Step 3:
Sell More With A Bigger Margin
The core
concept of step 3 is that it is always easier to convince someone who is the
process of buying or who has bought previously, to purchase more.
The front
end offer at step 2 creates the buying condition and then at step 3, upsells,
downsells and cross-sells of digital items, continuity products, coaching,
consulting, physical products, seminars, conferences and anything you can come
up with that is relevant and valuable to your customers, is where the profit
comes from.
While not
every customer will take advantage of back-end offers you make, the strategy
relies only on small segments of your customers buying your upsells and
back-end offers. The margins at this point however are significant, so one
back-end sale can result in as much profit as 10, 100 or even 1,000 front end
orders.
As I talk
about in the Conversion Blogging Video and break down in some depth in the
Sales Funnel 4-Part Article Series, the idea here is to filter down to a very
small group of people, a subset of all the traffic you generate, who buy
everything you offer (or at least something with a high profit margin). It’s
these people who benefit the most from your business, but it takes the above three
step process to attract and filter down to them.
When you
get this process set-up, you can determine how much each customer to your site
is worth. You know how much traffic you get, you know how many of them buy your
front end offer depending on what source of traffic they come from and you know
how many of them buy back-end products and upsells. From there you can
calculate how much each customer is worth, on average, to your business.
Do You Know
Your Customer Value?
Rich
Schefren hammers home the concept of Customer Value in his Business Growth
System. He really needed to get this principle right because long before he was
an Internet business guru, he had physical real world businesses (an hypnosis
company and a boutique fashion store in Manhattan, New York).
When you
run real world stores your costs are so high that you have to get your numbers
right. If you don’t, you lose money – lots of it. In the Internet world things
are more forgiving because sunk costs are so much lower, however that doesn’t
mean customer value is any less important.
Internet
business owners don’t suffer the consequences of not focusing on the key
customer metric, instead we can flounder around, test and fail and walk away
perhaps bitter and frustrated, but it doesn’t cost us much more than our time.
If you were investing ten or twenty or even hundreds of thousands into your
business, you would know your numbers from the start.
Raising
Customer Value
If you
knew, despite selling a $27 front end ebook, that thanks to a strategically
timed and optimized followup process, that each customer you convert is
eventually worth $300 to your business, could you use that to your advantage?
Of course
you could!
You could
spend more on pay per click advertising. You could hire search engine and
content development professionals. You can pay more money to affiliates. All
these things drive more people into your business, result in a huge strategic
advantage over your competitors and fuel massive profit growth.
If you have
been keeping up with recent launches in the Internet marketing space, nearly
all the leading players have been implementing this process recently, and
that’s no coincidence. These guys (and a handful of girls) are testing, sharing
results and then replicating the process and of course – promoting each other’s
launches each time they have something new.
As I
outlined above in the three steps, it’s not a difficult concept to grasp once
you spend some time studying Internet marketing (and perhaps experiencing the
process as a customer of another marketer). However so many things can hinder
the outcome that very few get far enough along to realize the million dollar
result.
If It Is So
Easy – Why Isn’t Everyone Doing It?
The
problems lie in the details. While the explanation I provided in this article
may present a process that is conceptually easy enough to understand once you
get used to the basics of Internet marketing, pulling it off is difficult.
Most fail
at step one – traffic. Despite best intentions and some initial hard work,
people are sporadic workers at best, and without some kind of immediate
gratification, give up long before results come.
Worse
still, many begin an Internet business with existing hindrances that plague
their ability to perform – things like mortgages, full time jobs, families to
support, ingrained self defeating belief systems, unrealistic expectations,
poor work habits, an inability to let go of control or hire help when required,
inferiority complexes, low self esteem or all manner of roadblocks can get in
the way.
For those
who persist long enough minor results come there way, yet after such a long
journey and so much effort, they are disappointed and discouraged – they
expected to be making better money by now.
Take It To
The Next Level
Take it to
the next levelHard workers and people with talent often get the traffic part
right and might even make some money with a front end offer or selling
affiliate products, but they are working at full steam just to maintain that
level. The idea of creating more product to sell for upsells and back-ends,
creating sales pages, recruiting affiliates and doing even more seems
impossible – the current workload is suffocating enough.
I can vouch
for this because, while I’m successful to a degree (certainly above average), I
am still not realizing a lot of potential – in fact I’d say I’m only realizing
10% of what I could achieve if I took the next step with my own business.
The
advantage I have is I don’t see it as impossible to take the next step, nor do
I feel that I am suffocating because I’ve built my business based on freedom
before money. However, I do face a choice as to where my business is going to
go next.
What Tiny
Details Hold You Back?
It’s
inevitable if I want my business to grow that I will need to make changes. The
greatest potential for growth in any business is removing those things that
hold it back, that constrain it. This is such a big issue that Rich Schefren
decided to focus his entire new report just on constraints (I’ll get you the
download link for the report at the end of this article).
As I stated
earlier, it’s the details that stop people from succeeding at all points of the
3 step system for a successful Internet business. In my case, I’m held back
somewhere around the step 2 and 3 area, although there is certainly potential
to do a lot more at step 1 as well.
Here’s a
list of the constraints holding me back –
Lack of
product to sell: I’ve got a bunch of products that are near complete or merely
ideas in my head to be created that I just never get around to implementing. As
a result, I don’t have anything close to a fully developed sales funnel with
upsells and a back-end.
No sales
process for new products: Even with products ready to go, I can’t sell them
until I have a sales page up and running with my shopping cart to take payment
and deliver the goods. Plus you need autoresponders to keep the marketing
system going for each new product and let’s not forget the whole “launch
process” for each new product.
Maintenance
of current systems: I spend most of my time keeping the status quo going and
there’s very little work on new projects. I blog, support my paying students,
promote affiliate products and fix things when they break.
I’m
traveling: This one is understandable and will change soon enough, but it’s a
constraint now because the little details (again with the details!) while
traveling suck time too.
I’m holding
myself back: Ultimately, as a big picture answer – I need to get a whole lot of
stuff done that I cannot realistic do myself – I need the help of other people.
I could
break each point above into more minute details, all the tiny things that need
to get done that constrain my results, but I think you get my point.
Now, how
about you?
Every
business owner should be able to sit down and relate a series of constraints
that hold them back, based on where they currently are with their business and
where they want to go next.
I suggest
right now you take a look at what you focus on with your business, what the
next step is to achieve your next immediate goal and what’s holding you back
from getting it done.
Care to
share your constraint?
If you are
brave – take a few minutes to leave a comment reply to this article and list
your present constraints, where you currently sit in the 3-step Internet
business system and what needs to get done next.
You Need
Awareness Followed By Action
Thankfully,
just be reading this article to this point and reflecting on your own business
situation you are getting closer to figuring out what is stopping you from
successfully implement the oh-so-easy 3-step Internet business plan.
Here’s a
process you can go through next to keep the momentum going –
Become
aware of the need for change
Determine
what problem has to be solved next
Isolate the
first step required to move towards solving the problem
Collect the
required resources to take that first step
Execute
Rinse and
repeat this to remove every constraint you have and you will be a millionaire.
It’s that easy :-) .
Need More
Help
Contact IVA to
start an online business T. +7981 130
8385
