Starting a Family Business on the Internet
- 2006 4 Oct
Almost everyone has wondered what it would be like to have their own business. And this is especially true in homeschool circles. Could my family benefit from starting a small business? How much time would it take and would it be worth it? Are there pitfalls to starting a family business that could cause more harm than good?
While I will be the first to recommend that every family at least consider a small business, I also recommend that they investigate the all of the pros and cons with their eyes wide open. Because, although there are unique blessings to starting a family business, each family should go before the Lord in prayer armed with enough knowledge to make a truly biblical decision.
Why Start a Family Business?
In this rough-and-tumble world of corporate layoffs and downsizing, a family business can provide a safety net if Dad has to find another job. Let's face it. The days of going to school, hiring on with a large company, and completing your 50 years with that same company (if they ever existed) are gone forever. Many companies are finding it economically expedient to let a man go just when he is entering his peak earning years. A couple of bounces like that and you can kiss your retirement goodbye!
Although many families have started a small family business to help weather economic downturns, others have moved in this direction for another reason. The modern work environment is hard on families! Companies realize that a man will work longer hours away from his family. What else is he going to do on a business trip except work long and hard so that he can get back to his family faster? And this fact is not lost on large corporations, who then send the man on even more out-of-town projects!
Other companies foster a climate of fear and competition. If you do not produce, and produce abundantly, you could be gone in the next downsizing. Clearly, this does not bode well for spending the time it takes to raise godly children and create a good marriage. A family business may not replace your day job overnight, but it will move you closer to financial independence.
Now, when I speak of financial independence, I am not talking about being free to live as you please. I am talking about freedom from undue influence of other men so that you can be free to please God. One of the curses of the modern work environment is that we look to a company for our health, education, and welfare. We rely too heavily on other people because we lack the confidence to provide for ourselves and our families. We willingly give others the power to dictate our schedules, how much we will earn, where we will live, and in some cases, who our friends will be!
It is time that families took back the responsibilities and freedom that God gave us in order to serve Him. Even though a family business may not replace your income overnight, do not despise the day of small beginnings. A family business can easily earn an extra $300-400 a month, and that would go a long way to paying down credit card debt and car loans. And after you pay down the high-interest credit card debt, your family business income can be used to make an extra payment once or twice a year on your mortgage.
Realize that an extra mortgage payment each year on the principle can reduce your overall loan substantially. This in turn can free up more money to invest in an IRA or perhaps become seed money for a future business. Debt is one of the reasons why Christians are not ruling and reigning in this world as God intended. How can you rule when you owe?
The rich rules over the poor, and the borrower is servant to the lender. (Proverbs 22:7)
Once your debts are paid off, you can really make some headway! As long as you keep your standard of living relatively constant, all that money that was going toward interest payments can now go toward generating some passive income. Passive income is money you earn whether you work that day or not--it is the money that you earn while you are sleeping or, perhaps, skiing with your family. Examples of passive income include interest from mutual funds, royalties from e-books and products you have created, income from rental properties, and sales from an Internet site, just to name a few. When your passive income equals your monthly expenses, any amount beyond that is gravy!
And finally, one of the best reasons to start a family business is the entrepreneurial education your children will receive. Once your kids get a taste of having their own business, there is no telling how far they will go! One thing you can be sure of: when your children earn money through a family business, they will realize that money does not grow on trees! Nothing teaches the value of a dollar more than earning it together as a family. Even if they decide to work for an employer one day, your children will have gained valuable knowledge and skills that will last a lifetime. Entrepreneurial skills are highly sought after, and future employers covet those who have demonstrable business skills. In short, your children will become much more confident in their ability to contribute to society, help others, and take their rightful place in furthering the Kingdom of God.
Why Start a Family Business on the Internet?
I have owned my own businesses since 1985. I have owned a construction company, a homeschool bookstore, a webpage development company, an Internet marketing coaching company, and several other Internet-based companies. I know the advantages and disadvantages of being self-employed. And I am always in search of the "perfect" business. So I decided to reflect on my self-employment history and write down my conditions for the "perfect" business.
Conditions for the "Perfect" Business
- No debt
Debt makes everything happen too fast. It puts too much pressure on your business. Debt is the number one reason most businesses fail in the United States.
- Something that can start small
You don't want to bite off more than you can chew. If you have never had one employee, you do not want to start off with ten! Remember, all things need a chance to incubate before they can grow, and your family business is no exception.
- Must include my kids
The whole purpose for starting a family business is to spend more time with your family. If you start a labor-intensive business in your garage and never see your kids, what is the point?
- Low capital investment
If you had a gazillion dollars, you wouldn't need to start a family business!
- Low time investment
- Generates passive income
Again, I can't start creating wealth until my passive income exceeds my monthly expenses. I want to earn money while I sleep (and while I'm on vacation!).
- High reward for little risk
Hey, as long as we are dreaming, I might as well throw this one in as well. I do not want to take huge risks, but I do want a huge upside potential!
Now, I'm not asking much, am I?
Actually, the only thing I know of that meets all of these requirements is an Internet-based business. I know of no other business where you can invest less than $65 (domain name and a hosting service) and start selling products within four hours. And with eBay, it is even cheaper and quicker than that!
Honestly, anyone can set up a simple web page with a product, drive customers to the page, make the sale, and ship the product. This is not rocket science. And it is not the private domain of "techies." If you can type a document in Microsoft Word and check your email, you can do this. Believe me. Oh, you may have to know how to apply packing tape to a package, but I think you will get the hang of that!
I live in a small town in Idaho. It is a rural community with a small state college. Of the small population here, one-third is college students. Not exactly a "booming" economy with plenty of customers beating down my door! So, in order to make a living, I have to find my clients elsewhere. Actually, I find millions every day. Now, not every one of them buys from me, but the fact remains, I have access to a huge client base through the power of the Internet.
I sell to people every day whom I have never met. This is an amazing concept. If you already have a business, I hope you see the huge potential you are missing if you are not making some portion of your sales through the Internet. What would you give to double your current customer base? I don't care what you sell; there is something related to your service or product that you could sell on the Internet. And the cool thing about the Internet is that once you set up your business, it keeps selling and selling and selling.
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.
Now that you have located a profitable niche that has needs and is willing to pay to have them met, you know what those needs are, and you know what products will fulfill those needs, you begin by building a community. Notice that I haven't said anything about building a website yet! You are going to need a website eventually, but first you need a way to communicate with your visitors after they leave your website. Face it. Not many people buy something on their first visit to a website. Do you?
You need to communicate with your visitors through email so that you can continue to dialog with them about their unique needs (which you know from your survey and your keyword research). You need to give them lots of great tips and knowledge so that they begin to trust you--that you really know what you are talking about. You need to share stories about your shared need (you are a part of the niche, after all) and tell them that you understand ... and that you even have the solution to their need. And this is where you build community--community through email loops, blogs, newsletters, Yahoo groups, and articles. You are finding people in your niche so that you can attract them to your site and offer them the solution to their needs.
The next step is easy. All you do is create a simple website, place a product or two on that website, collect the money through a shopping cart, and deliver the product through one of the means described above. You have already done the hard part by finding the niche, ascertaining what people in the niche need, finding the product that meets that need, and beginning to build a community that is aware of what you have to offer.
Now all you have to do is create more awareness of your site through your community, optimizing your web pages to rank well in the search engines and writing articles relevant to your niche for the Internet article directories. That's really all there is to it. And if you love the same things that your niche loves, it's almost like getting paid to have fun!
Stephen Beck is a homeschool dad of three and makes his living teaching families how to start their own business on the Internet. He is currently attending seminary to become a pastor. He would like to give you a free report, "How to Choose the Right Product to Sell on the Internet." To get this report, please visit his website at www.FamilyEbiz.com.
Copyright 2006. Originally appeared in Summer 2006. Used with permission. The Old Schoolhouse Magazine. Right now, 19 free gifts when you subscribe. www.TheHomeschoolMagazine.com