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Two major reasons why you should start an online business

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There are two major reasons why you should start an online business. However, many shy away from the internet. One of the reasons is that the World Wide Web is perceived to be a complex operating ground, especially for entrepreneurs.   
 
That’s completely understandable. With the likes of terms like ‘search engine optimisation’ or ‘payment gateways’, it’s enough to give you cold feet. People are also more comfortable building companies they can physically see and touch, not to mention dealing directly with customers.
 
In an online business, customers, distribution channels, employees and even team members may sit in a virtual world. Face to face interactions could be minimal or absent all together. This may present a highly unfamiliar environment to some.     
 
Is it an environment worth exploring? Absolutely!
 
Most companies currently use the internet as a marketing tool to promote their products and services. That’s all cool. The net is a great way to support direct marketing methods. It’s cheap, can be effective and ads can be viewed by thousands or people.  
 
But the World Wide Web is more than just a tool to communicate with people. It represents a platform to build online communities comprising thousands of potential fans from all over the world.
 
I deliberately used the word ‘fans’ and not customers. A customer is somebody who buys something from you. The relationship is purely linear. However, a fan is somebody who raves about your business because they absolutely love your offering. Not only are fans repeat customers, they are your marketing team because they end up telling others about your product or service.
 
To gain a fan you need to gain a friend. The relationship needs to be dynamic. You do this by giving potential customers value and communicating with them on a regular basis.
 
The internet is ideally suited to build fans. Here is a simple example. Let’s say you own a mailing list consisting of 10,000 email addresses, which you collected from your website by offering a free digital book.
 
Over the past couple of months, you've sent out a series of emails giving valuable tips and news about your industry. A relationship has been established.At some point, you decide to market a $100 digital course by emailing your list. Since the product is digital, it can be delivered to customers at almost zero cost.
 
Assume that after sending 10,000 emails, 1% of people on your list take up your offer. That’s 100 customers, and at $100 a pop, you can make $10,000 in almost pure profit.
 
See the possibilities?
 
If you still feel a bit apprehensive of the net, at least from a business point of view, here are two reasons to help bring out the online entrepreneur in you:       
 
A) High profit margins
 
If profits are what you’re after, an internet business may be the ideal vehicle for you. The cost of operating online is miniscule in comparison to traditional business activities. This means that your profit, revenue less costs, will be higher.
 
A website designed for electronic commerce has to content with at least two sources of costs, hosting fees and credit card transaction fees. All other costs are optional.
 
Activities relating to web design, marketing, product development, storage, distribution or sales do not have to cost you a cent. It all depends on how you structure your business. You can learn and do all these things yourself or you could outsource some of these activities.   
 
To keep your website up and running, you will have to host it somewhere. Hosting companies will charge you a fee, which may be as low as $5 per month. Check out bluehost.
 
You must have a credit card to do business online, as it will help you collect payments from customers. Card fees are levied as a percentage of the selling price which may be up to 3% in some instances.
 
So, for an online product worth $100, subtract $5 in hosting fees and $3 for credit card charges. That leaves you with a profit margin of 92%! Not too shabby.  
 
Compare this with a bricks and mortar business having to cover costs for product development, storage, labour, delivery to customers and insurance. Margins may be as low as 10% or 20%.
 
The lower the total cost the higher the profit margin and greater the wealth creation potential.  
 
B) Accessibility
 
A corner street burger shop can only serve a limited number of people. Customers may be restricted to households within the shop’s vicinity or people who use street to commute.
 
An online business on the other hand has access to virtual markets from all over the world. The more access you have the more people you can serve, and this usually means higher profits if things are done correctly.
 
Accessibility is critical for success.  
 
 
 start an online business to access markets 
 
 
Suppose you have a truck load of ground horny goat weed to sell and the only living market resides in Sweden. You live in Australia, problem? Nope. If your market has a demand for horny goat weed products, and performs online searches for the stuff, you’re in business. Accessibility!
 
The web is not only a great way to bring buyers and sellers together, but allows businesses to acquire the services of professionals at the click of a button. 
 
In an online business, it is not necessary to go through the hassle of finding, screening, interviewing and hiring employees. One can simply outsource work to experts all over the world, and you can do this using Elance. On this platform, you post the job and the experts bid for your work. It’s simple to use and efficient. Check it out.
 
In all, you can find customers, hire employees, contact suppliers, outsource basic office tasks and effectively run your business from anywhere in the world using a laptop or cell phone.
 
You are not confined to a corporate structure and you a free to move wherever whenever. The great part of it all is that you can do this from the comfort of your own home.
 
Still have doubts as to whether you should start an online business? Whatever business you opt for, success is founded on good profit margins and accessibility to customers and other peoples’ expertise.

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