So, in order to demonstrate how easy it is to start an online business, let me go through the steps of creating a profitable website. After all, a successful website is actually nothing more than a vibrant community, as you will see shortly.

The Steps to Creating a Profitable Website
The first step in building a successful website is choosing the right niche. You need to find a group of people who have a need and are willing to pay to have that need met. This is Business 101. And the cool thing is that the Internet is tailor-made for niches.

For example, it would be very hard for me to open a store that sold nothing but Swiss watches in a small town. There are just not enough customers to come through the door on a daily basis who would be looking for that particular product. But if I could somehow advertise my Swiss watches to Swiss watch fans all around the country--or the world--then I may be onto something. And if I really have a passion for Swiss watches and I enjoy talking about Swiss watches and writing about Swiss watches and I dream about Swiss watches--well, you get the picture--then that passion will come through to my customers.

So the first step is to identify a niche that has high demand. But I also want to avoid a niche that has a lot of competition. Selling iPods on the Internet is a terrible idea. Even though there is a huge demand for iPods, there are probably two million websites trying to sell the exact same thing. Do you want to be number two million and one? No, you want to do your research and find out which niches and products have a large demand and a relatively small number of competing websites.

The next step is to choose a product that your niche needs and is willing to pay for. We all need oxygen, but very few of us are willing to pay for it because it is in abundant supply. It is the same with music. Only the big Internet companies make money selling music because they can sell it in great volume and, more importantly, sell advertising space on their popular music download sites. But you are not a big Internet company, so you want to find a product that your niche needs but will not be able to find at hundreds of other websites.

Now, here is where you need to start making decisions. Do you want to purchase a product in bulk, store in it your garage, attract customers to your website, and then ship it to them when they buy? Or do you want to attract customers to your website and then direct them to someone else's website, collecting a commission when they buy from that other person's website? Or do you want to create your own products, whether they are downloadable files or products that you have to ship to your customers?

Depending on which scenario appeals to you, you need to find a product that meets the needs of your niche. And how do you know what your niche needs?

You ask them.

Many free survey companies allow you to send a survey to a specific group of people and ask them questions such as

  • "What is your single greatest question when buying a new (blank)?"
  • "If we could show you how to (blank), how interested would you be in our upcoming ebook?" (not interested, somewhat interested, interested, very interested)
  • "If you could save (blank) by purchasing our new ebook, what would you consider a good investment for this ebook?" (four price ranges)

Amazing. We have just determined what people in our niche want, how badly they want it, and how much they are willing to pay for it! If you send a survey with ten questions to 100 people and offer them a freebie to entice them to respond, you will have a very good idea of what to sell to your niche.

Another way to find out what your niche wants is to see what your niche is searching for in the search engines. Various companies track what search terms people use, how many people use them in a given time period, and how many competing pages there are for each search term. This is a virtual gold mine. What if you were opening a restaurant and knew, before you even opened the doors, how many customers you would have next week, what they would want to order, and how much they would be willing to spend? You would almost be guaranteed success. Well, you can have all that and more if you know how to research search terms on the Internet.