Most entrepreneurs fail when they start an internet home business because they make one simple -- but avoidable -- mistake.
They don't find out if there are potential customers for their product before deciding on what to sell.
Internet home business entrepreneurs need to find a niche market looking for their product before they decide on a product to sell online.
Once they think they have a profitable business idea for their niche market, market research must be done to ensure this is really the case.
Follow these three steps if you want to avoid this deadly mistake when starting your internet home business.
Step #1: Brainstorm your own passions and interests
Entrepreneurs who start home Internet businesses based on their own knowledge, experience, and expertise are far more likely to be successful.
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.
Unique skills and interests can come in a surprising variety of forms. For example, knowing how to pass the exam required to become a firefighter is a skill on which you could base a business. So is quilting, or collecting model trains, or kicking a bad habit like smoking or biting your nails. But a lot of people find it difficult to think of their own unique expertise.
A list is a great place to get started - write down all of your unique experiences, careers, passions, interests and any life challenge you have overcome.
Once you have your list narrowed down to a few areas that are of most interest to you, you are ready start your market research.
Step #2: Find a niche
When it comes to finding a niche market, you've got to think small if you want to find big profit potential.
Smaller, specialized, untapped niche markets can be the source of big revenue streams.
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.
Most people go online to find useful information to help solve a problem, not to buy (at least right away).
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".
But you've got to think small. If you start with a large, general market, you'll likely find it saturated with competition.
So be patient and explore all the possible avenues. You've got to drill down, down, and down again -- until you finally strike gold!
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!
By starting your internet home business this way you will know there is a pocket of eager customers who need your product...even before you spend any time or money creating the actual product! You next need to validate your market before rushing off to create the next hot product.
Step #3: Validating your market
To validate your market you need to confirm it has profit potential. 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 small enough so there aren't many competitors, but big enough to be profitable?
You want a small pond, but it still needs enough "fish" in there to make it worth your efforts. If you find lots of competitors who are well established, well supplied, and well funded, back away! You should look for a smaller, more precise niche.
3. Do your potential customers have money they are willing to spend?
You need to know if these people actually buy stuff... so it's a good sign if there's some competition already selling products to the market. You'll have a much harder job selling to people if there are too many free products or free sites available.
4. Is your market passionate enough about their shared problem to solve it by spending money on your product?
A motivated market eats, sleeps, and breathes their interest... so you want potential customers who are so passionate that they must have all the information related to their subject.
People who are obsessive about their passions, such as video gamers or stamp collectors make a profitable market!
Final thoughts
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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