Business

Online business model – An Executive summery

 

 

The era known as the “Dot Com” boom is generally accepted to have begun in 1996 when large corporations began to realize that this new “Internet thing” presented some tremendous sales opportunities. It didn’t take long for a gold rush mentality to set in and the Internet was flooded with venture capital money that was being thrown at anyone who could throw together a halfway decent business plan for doing business online. Fueled by a seemingly unlimited supply of money, combined with unbridled greed and a rapidly advancing technology, new business ventures hit the Internet by the thousands.

After a time, reality replaced fantasy and it became apparent that many of these online business models were not sustainable and web sites began to close as fast as they had opened.

When the “Dot Com Bust” occurred in 2001, it didn’t spell the end of doing online business on the Internet, it just spelled the end of wasteful spending and pie-in-the-sky plans which weren’t sustainable in reality. What was left after the dust cleared was a more sensible online business model that opens doors for anyone who is willing to work hard and work smart. If you are looking to get rich overnight, try buying a lottery ticket; you’ll have a better chance. The rest of you, who are interested in doing business online should continue reading.

Planning your online business

Starting an online business requires the same degree of planning as starting a “real world” business does. While you may not have all of the same issues that an off-line business has, many of the requirements are exactly the same. Let’s take a look.

Off-line Business

  • Rent
  • Cost of Goods Sold
  • Office Equipment
  • Credit Card Processing Costs
  • Payroll
  • Advertising & Marketing

Online Business

  • Website Fees
  • Cost of Goods Sold
  • Office Equipment
  • Credit Card Processing Costs
  • Payroll
  • Advertising & Marketing

 

As you can see, a “real” Internet business requires an investment of money and time just like any other business. Failure to realize and accommodate this fact is one of the biggest contributing factors to both on and off-line businesses today. It always has been.

Before you hang out our digital “shingle” and call yourself an Internet business, take the time to develop a business and marketing plan, and crunch the startup numbers so you know exactly what it will cost you to go online. Only then are you ready to move on to step two.