Choosing an Idea

Now that you have brainstorm and research about different business ideas, its time to think deeper and decided over one.

Helped by a Spread Sheet based on Business Professor Lundin Kent work, I display the brainstorming and research I did:

DecisionMatrix

You can download it so see all the criteria I put into. Feel free to modify it with your own ideas!

My top choices are:

	Business		Proposed domain name		Monthly	Computed	Advertiser	Computed	Time invested	Starting Investment	Computed	Built Web Site		Best Revenue (expected)
Business Idea	Model	Representative Keyword			Searches	10 is Best	Competition	10 is Best	10 best		10 best	10 best		10 best	TOTAL	Rank
Spanish Translating Services	Service/Utility	spanish translator	getitinspanish.com		1,000,000	3.7	Low	10.0	8	$10.69	6.7	7	7	8.0	29.0	1.0
Apple iPhones Affiliate	Affiliate	iphone	getaniphone.com		3,350,000	10.0	Medium	5.0	6	$10.69	6.7	8	7	4.0	25.9	2.0
Housing finding tool	Utility	Roomie, Roommate	theroomie.com		33,100	1.1	Low	10.0	3	$0.00	10.0	3	4.4	6.0	21.5	3.0
chess tactics page	Advertising	chess	yellowchesstactics.com		823,000	3.2	Low	10.0	5	$10.69	6.7	5	5	2.0	20.6	4.0
Vans Affiliate	Affiliate	vans	iwantmyvans.com		2,740,000	8.4	Medium	5.0	5	$10.69	6.7	4	5	1.0	19.3	5.0

I thought in the product/service to offer, the Business Model to follow, the domain name I would use. Also I used Google Adwords for getting information about the traffic volume to different keywords.

This is not a magic sheet, but rather a tool to help you decide. Something can be ranked number one, but if you do not feel passionate about it, or just think something else is better, you can choose something more.

I would go with the Spanish Translations Services!

Research your context.

In the step before I thought in a service and many business models that can fit it.

It is important to know that it works the other way, pick a business model that fit your life style, and they come up with as many as products that you can think about.

Before moving to the next step of researching your context, it is important that you have at least 10 business ideas, the more the better, and you will be able to take a better decision.

Research your context consist in getting to know the competence and demand of every business idea.

Because we are focusing on Web Business, I will show you how to use Google in your favor!

We’ll be using Google Adwords to research our context!

First create a free account at Google Adwords.

Once created in the top right you’ll see this navigation bar.

Click Tools.

Select Keyword Planner.

Click second Item “Get search volume for a list of keywords or group…”

A new dialog will appear:

In option 1, type keywords that you think people would search to find your business online.

Click get search volume!

You will see a monthly report of the amount of searches for those keywords/search terms.

Ideally you want a lot of searches, a low competition!

You can search for other keywords related to one business idea. Be careful to not be generic. In this case the keyword “Spanish” is not listed because is very generic. I want to know how many search for learning Spanish.

Repeat this process for every business idea you have. This way you can know about the demand and competition!

Combining the Product and Business Model

It is important that after thinking in the product/service and the business model, you come up in a way to combine them.

I will set the business idea I want to develop.

I took the approach of the Product/Service first. Thinking in my personal Strengths, I speak Spanish fluently. So I decided to provide Spanish services. Now, how can I make money online with that ability?

Business Models that could fit it are:

Ads, I can create a free Spanish teaching site with ads to create revenue.

Affiliate, I can create the learning Spanish site and suggest learning materials, those links would be in my site and when the visitors buy them I receive a percentage.

Subscription, I can sell my lessons. Visitors would need a membership to access them.

Merchant, I can do translations and charge for them.

I hope you can see that any ability has many ways to monetize it. And many business model can fit them. And what is best, you don’t have to pick just one. You can have many ways in your site to make money.

Just be careful, start with one, and them incorporate others, you want to be the best if you want people to prefer you.

Product/Service First!

When to choose a Product/Service first:

This is a great site to come up with ideas for products and services: BrainStorming.

I’ll make a summary for you:

Solve Problems with Solutions: Think in activities that are hard or a pain to do. Think in a product/Service that can improve that experience.

Market-First: Think in the market you want to approach, research it, understand it.

Personal Strengths: Think in what you are good at.

Importation: Bring/Sell products/services not in your local market, but that exist somewhere else.

Lateral Thinking: Think out of the box, see things with new perspective and create products/services that are innovating, or can use for something different.

Business Model First.

Some reasons to choose the Business Model First.

You are limited by time -> Almost all online business models let you use your time more freely, but it still requires effort to become really successful. The more smart time you invest, the more money you will get. Saying that you have an actual job, or you are a student. You have normally a fixed schedule, you need a model that will fit your time better.

You can’t spend too much time doing a product, right?

You are limited by resources -> Saying you have all time in the world, but don’t have the resources to sell exactly what you want. There are options out there, like affiliate or drop shipping to sell anything you want, without owning it.

Want to try a new way to make money -> In case you love trying new stuff, you can challenge your self and make profit out of any business model!

See Business Models for more info.

What is first? Business Model or products/service?

We were ask as a class to determine what should come first, the business model or the product/service to offer?

We vote on what we thought, but the answer was, all of you are right! Either one can come first!

All depends in your own circumstances! To understand this better we have to take the two approaches.

Business Model First.

Product/Service First.

Online Business Models.

I like to think in the Solar System. Everything works so organized and precise.

We have to think of business model the same way. An organized way to earn money!

In order to have a wide understanding of all opportunities out there, we need to know the most common business models on the web. This site is very handy: digitalenterprise.org

I will make a summary of the most outstanding business models in the page, but it will be recommended that you read the whole article!

Brokerage -> (service) Brings buyers and sellers together. Revenue comes through commissions for successful transactions, featured products, and sometimes fees for publishing, but because everyone loves free stuff, it is best to only charge for successful transactions.

example: ebay, craiglist, mercadolibre

Advertising -> (service) You run a website that can display ads. Your site should be awesome, so that a lot of people would like to visit it.

example: blogs, facebook, youtube, social networks.

Subscription -> (service) You offer something that people want, like any kind of support/help. This model has been used a lot recently. With the “cloud”, instead of you buying a Hard Drive to store your files, you pay a monthly or anual fee to have them in the cloud. Microsoft sells office, but now it offers it as a subscription service.

example: newspapers, magazines, netflix, spotify.

Merchant -> (product) You resell products. That simple, buy and resell, usually you buy big amounts of the product to have a revenue.

Dropshipping -> (product) It is like merchant, with the difference that you do not owe the product, and virtually never have it. You sell the product through your website, but you have an agreement with a manufacturer. So overtime you sell a product, you notify the manufacturer, and they send it to the buyer. It is an interesting way to make revenue, because you never have the product, you forget about storeware cost and products leftovers.

Shopify has a great DropShipping guide, check it out!

Affiliate -> (product) Affiliate is similar to Dropshipping in the sense that you do not owe the product, not have to worry where to store it, but the buying process for the customer is different. In drop shipping, they buyer stays the whole time in you site until you check out. In Affiliate, buyers come to your site and when they want to buy, they are directed to the sellers website. You receive a percentage for sold item.

Amazon Affiliates is the most popular Affiliate-Program. Check it out: Amazon Affiliates

Manufacturer -> (product) If you are the manufacturer of a product, you can use the web to sell it. You can offer it in big or small quantities.

Products and services.

You might know what a product and a service are. But I just want to make sure we are in the same channel. Also we need to talk how they need to be offer through our business to have a higher success rate!

Product: is an article or substance that is manufactured or refined for sale. Something the end user gets. This can be any physical or virtual thing. Like food, cars, phones, software, apps. It is something that the user is going to owe. It will belong to them.

Service: is the action of helping or doing work for someone. This is not something the user can owe, rather something by which they receive a benefit. Like massages, hair cuts, software support, your phone line (right?, you do not owe the antennas and devices to make transmissions, rather you pay for the right to use them).

Having this clear difference we need to know, that there are three ways to become successful in selling Products or Services. These principles apply to either one.

1 Create a new Product/Service. Being the first at something always give you some advantage, it makes you look as an innovating mind, it gives you credit for it, and allows you to be the only seller if you own the copyrights. This can be challenging because you are opening a new market, but if it is something that people love, you will become very prosper.

Example: New invents, the light bulb, or YouTube. Both were just new thing for its time.

2 Enhance/Improve an existing Product/Service. If you think deep, why would anyone buy to you something that already exists? It just doesn’t make sense, most of the people will go to their know places to get that stuff. There are two thing that you can improve around a product:

a) The product it self. Who doesn’t like cookies? But many people do delicious cookies, what can you improve over them? maybe make them more colorful, bigger, in different shapes. You got to think how can the user/customer enjoy it better, desire it more.

example: the iPod, iPods, were basically an MP3 player, they were not the first ones, but what make them so desirable? Apple did a good job telling people that they were easier to use, were fancy and well design, people would buy them and discover that they were in fact. That gave them the acclaimed fame they had.

b) The process of getting the product. Two companies could be selling the very same product, no change on it. But what would make a customer buy to one over the other? Quickly we can say: price and trust. Trust is something that is built over time. Price is not always the reason. What really is going to attract customers is the buying process, the whole experience behind it!

How can I start?

The first thing to do is be determined to start! Then we have to decide how to do it!

To do that, we got first to understand some things:

-Every business offers either a product or a service.

-Traditional business rules and models apply to online business, but you will find peculiar business models as well.

-Business models adapt to products/services.

-You have to understand your context.

I will create posts for all four points above to explain with more detail!

In this section we have to understand that setting a business is a matter of tenacity, discipline, desire, thinking and creativity. It is hard work, but it is always worth it. Don’t become disappointment when things just don’t go the way you want, or when you are not archiving the results you want. In these cases, we would need to do a deeper thinking, and it is when the most valuable lesson will come!

So, let’s understand more how an online business works!

Is this blog for me?

The intention of this blog is to help you out with concerns, ideas, brainstorming and questions you may face when you go to the entrepreneur side and start an online business. As the blog title states, we will start from scratch! I only assume that you have a great desire to create and do business! I don’t know all things concerning to this matter, but I will share with you what has helped me to start.

As I shared in the first entry, the internet is a huge hub of possibilities! Many of you as me are wanting to know how to take advantage of the web and create an online business! There is a lot of people -and I believe even you and me- who buy stuff online. Buying things and services through the internet is increasing very fast. A forecast says that in 2017 online sales will duplicate what was sold in 2012, reaching $2,143 trillion UDS worldwide*. Can you imagine all that money? We must take advantage of the wave! So in my mind arises the question:  How can I start?

*Online Sales forecast