It’s business time
Ok, so you have stumbled upon my basics to how to start an on-line business, which is the best way when you have limited funds. Heck, you can have everything up and going by only spending 50 dollars. Basically, I just copied and summarized the articles that help me (below). I’ve also added critical tools and tips that have helped me.
- Pick a niche. Something you like, know about, and something not too many people are doing.
- You are going to have to double down. Work 2 jobs.
- Don’t focus on business cards, tax id, office space, trademarks, & business registrations. Get the product or idea off the ground first.
- If cash is needed, not the only options, use credit cards or get a loan from prosper. They have
Personal loans at rates as low as 6.59% APR.
- Find a website domain host. I use blue host, more are listed below.
- Pick a site platform & theme. I suggest wordpress, which is what I use. I also use woo themes. It’s not hard either. If you can use a computer. You can create a wordpress site.
- If selling a product, I suggest teaming up with an affiliate (shareasale or commission junction). This allows other sites to promote your product. Learn how share-a-sale can increase your sales, develop your brand, and generate interest in your site.
- Get into google. Google is like the modern day phone book. If you are selling, Asian flavored breast milk (weird I know, just the top of my head) you want your site listed on the first page. This is called search engine optimization (SEO). There are many companies that help with this and wordpress plugins. Put your business on the map. Google Local submission and an online local profile for just $19.99 /month!
- So there you are. These are just the basics. Get to it!
Helpful Articles are below:
Choose Your Niche Carefully
If you are looking for some unbridled optimism and a big rainbow coated, sparkly, you-can-do-anything speech about your new business idea, then look elsewhere because you ain’t gonna find it here. There are certain constraints that a lack of money will place on the types of businesses that you will be able to start, BUT all that means is that you will have to really focus on the kinds of niches that will make sense for your limited budget.
Any type of business that is heavily capital intensive is probably a no-go. If your business requires a large factory, lots of expensive equipment, and a large labor force right from the get-go then you should probably head back to the drawing board for a different business idea. However, the great thing about starting a business in 2010 is that for less than it costs to buy a new Blu-Ray player, you can have all of the startup money you need to start a number of top notch business ideas – especially businesses that are online based.
In years past, if you didn’t have money to pay for office space right smack dab on Main Street, or in more recent years, if you didn’t have money to buy a load of advertising in the Yellow Pages, then you were flat out of luck because you may have had a small business but none of your customers were ever going to even find out about you. The beauty of starting a business today is that within minutes of setting up your own website or blog you can be interacting with potential customers and selling your products or services online to people all over the world. Which brings us to the next very important point: it’s going take a lot of hard work.
No Money? You Better Be Able to Work Hard
You can start a very successful business without having a lot of startup money. You can start a very successful business without being a super hard worker. You can be successful without having one of those things but not both. With the exception of the ultra-skillful, natural born geniuses, if you want your business to be a success and you don’t have a lot of start up cash, then it is absolutely essential that you have a very strong work ethic (Free Hint of the Day: if you have to ask yourself right now if you deserve to fall into the genius category then the answer is that you don’t ).
It won’t always be easy to lift yourself up by your own bootstraps and soldier on even when you feel as if you are not seeing results as quickly as you would like, but power through “The Dip”and you might just be surprised at how rich the vein of gold is that you strike.
Namby pamby’s who whine because they just got home from working a 10 hour day at the office for their “day job” and would rather watch American Idol than work on their startup business will likely fail. Don’t be that namby pamby.
Practical Options for Getting Off the Ground
If have a limited budget, are already convinced that you are in the right business niche, and you know that you are committed to working long hard hours on your business, then here are some practical options that you should consider exploring as you move forward with your startup idea:
“Double Up” – This is a sound risk management strategy and is efficient as a very economical business startup option as well. “Doubling Up” simply means that if you’re already working at a “J-O-B” (as many entrepreneurs and would be entrepreneurs call the idea of working for someone else) then continue to work in your job but tack on the extra career of starting your business on the side. Yes, your family time, recreation time, personal time, and maybe even personal hygiene time will suffer the consequences, but the two enormous advantages to starting a business with the “Double Up” strategy is that you have a steady stream of income flowing in from your day job, and you get the opportunity to test out your business idea in a risk efficient way to see if it’s a winner.
“Partner Up” – If you have a good business idea and no money, then a great business partner for you could potentially be someone with a lot of money and an interest in starting (or just financing) a new business. How do you find these types of people you say? If your new business idea is in the same industry as your current career then you may already have some existing contacts that have the funds, the desire, and even more importantly, the know-how to evaluate your business idea and potentially even offer more than just financial help. If you do not have any existing contacts in your industry, then barring a rich uncle that you are on good terms with, your best bet is likely to seek out an audience with local angel investor clubs, other local business people, or the big boys from the venture capital firms.
“Charge Up” – If you ask very successful entrepreneurs how they financed the beginnings of their businesses, the majority will tell you that they used personal credit cards and not a more traditional source of “big business” funds like a bank loan, angel investment, or venture capital cash infusion. In fact, according to the Kauffman Foundation, the percentage of one person startups that used credit cards to finance their new business was 60.8%. Am I saying that using a credit card to finance your business startup costs is a smart idea? For most people the answer is a resounding “No.” However, almost every Fortune 500 company uses some sort of debt to leverage and accelerate their growth, and if your business model is sound, and your startup’s ROI is high enough, then maybe a low interest rate credit cardcould be an option to consider as a last resort source of seed money.
Top 10 Money Saving Business Startup Action Items
- If you absolutely must form a business entity right away, then use mycorporation.com as they offer free basic document filing to form your LLC or corporation (but you will have to pay any fees due to the state).
- Apply for an Employer Identification Number (EIN) yourself in just a few minutes using the IRS EIN online application (mycorporation.com, CPA’s, and others charge upwards of $100 to do what you could do in 5 minutes).
- Pass on buying expensive accounting software and opt to use QuickBooks Online(starts at $9.95/month), FreshBooks (basic account is free), or GnuCash (open source and 100% free) instead.>
- Read the 25 rules for choosing a domain name and then buy a cheap domain name at GoDaddy(do a Google search for “GoDaddy coupon code” right before you buy).
- If you have left your job and are currently paying for COBRA health insurance then shop around and compare some of the various individual health insurance providers to see if you can find a cheaper plan (COBRA is usually quite pricey compared to an individual health plan purchased on the open market).
- If your business requires a logo right away, then make your own logo at LogoYes.com(starting at $69) or hold a logo design competition at 99Designs.com.
- If you need to accept credit cards then try PayPal or Google Checkout instead of paying for a pricier merchant account.
- Get 250 free business cards at Vista Print.
- Get reliable shared web hosting with a free one click installation of WordPress at HostGator.com (plans start at $4.95/month).
- Get free conference calling at FreeConferenceCall.com
Taking the Plunge
If you are waiting for the stars to align, the winning lottery ticket to fall into your lap, or others to create your destiny for you, then you will likely end up 25 years from now in the same place as you are right now. There are always a thousand and one different reasons that can flood through your mind and tell you to just play it safe and ignore that entrepreneurial urge inside of you to start your own business. Don’t let a lack of money be one of those reasons.
About the Author: Joel Ohman is a Certified Financial Planner™ with an entrepreneurial bent. He owns 4 companies and is currently working on a number of different web related projects including consumer comparison websites for credit cards and car insurance.
read the whole article:
Tools that helped Bontheball:
Blogging & Website basics
I am going to try to boil this down to the essentials. There are whole books written on this subject, so I am not going to try to cover everything here. If you are looking for a good book about blogging for beginners, I suggest reading Darren Rowse’s “31 Days To A Better Blog”. But for a quick, bottom-line version keep reading…
What is a blog?
A blog is short for “weblog”. Basically, it is just a website that has entries listed in reverse chronological order. The original idea behind it was to be a online journal or diary that was updated daily (or as frequently as the writer chose). Over the last decade many software programs and blogging platforms have been created to make the process VERY EASY. As the blog writer, depending on which platform you use, you can just type your entry, press submit and it shows up on your blog for the world to see. Most bloggers don’t know any programming languages and are not “techies.” Starting a blog is one of the easiest ways out there to start a website. If you haven’t started one yet, why not try it? It can be very quick to set up and can be completely free.
Is it easy to start a blog?
It is very easy. Even if there are steps along the way that are confusing, there are plenty of resources to get the help you need. There are over 20 million blogs in existence, so it can’t be that difficult.
How much does it cost to blog?
There are many services that allow you to start a blog for free (see below). I suggest using one of the free services to get a basic feel for blogging and “get your feet wet.” Once you decide you want to stick with it and that you want to make money with your blog, I suggest moving up to a self-hosted blog (see below). Anyone who is really trying to make money with a blog will probably be more successful with a self-hosted blog. Getting a self-hosted blog may not be free, but still can be VERY inexpensive. You will need to pay for nothing more than a domain name ($10) and web-hosting (as cheap as a few bucks a month).
Getting a blogging platform
All 4 of the options listed are free. The first 3 options are the easiest, but the are also limited on features. If you are just trying to make an extra few hundred dollars from your blog, these options could work. But if you are really serious about trying to make good money from your blog, I recommend self-hosting your blog (which we talk about in the next section…).
Tumblr.com – This is probably the simplest blogging platform to use, but it also is the probably the least customizeable. So, it might be something good to start with, but it would be more difficult to build an income-generating website with it.
Blogger.com – Blogger is also very good, easy to set up, owned by Google, you can customize the theme, and the domain name includes “.blogspot.com” (in some people’s opinion a little less professional). Blogger continues to become more customizeable and currently has a lot more options than they did a few years ago.
WordPress.com – I like wordpress.com they are completely free, easy to set up, you can customize the theme, but other customizations are limited, domain name includes “.wordpress.com”.
WordPress.org – Wait, what is the difference between wordpress.com and wordpress.org? To put it simply WordPress.com is where you will go to set up a basic, easy blog with limited features. WordPress.org is where you will go to get a self-hosted blog. If you get to the point where you are serious about blogging and really want to make some money with it, you need to self-host your blog.
How to setup a self-hosted blog
If you are going to be using one of the first three options above, you can skip this section.
If you are serious about blogging and are looking for the best way to customize your blog’s look and other features, then getting a self-hosted blog from WordPress.org is probably the best way to go. It is currently the top choice for most bloggers. It does require more work up front and does have small costs associated with it: buying a domain name ($10/year) and hosting your blog ($10/month).
One of the big advantages is that you can use your own domain name (i.e. yourblog.com). While this might not seem like a big deal, it is a lot easier for people to remember yourblog.com rather than yourblog.blogspot.com which is what you will be given if you use Blogger.
I will warn you, being a non-techie myself, this took me some time figuring out how to get my self-hosted site set up. WordPress.org has a great step-by-step guide for getting you set up. While it is more work on the front end, I am really glad I got good advice and did this at the beginning, than having to do it now.
Pick a Domain Name
1. You should start by purchasing a domain name. Domain Samurai is a great tool that will help you enter in a keyword and then find a bunch of related domains that are still available. I would suggest going to for a .com rather than a .info or .us or anything else for that matter. It is just too easy for people to get confused. A .com is always going to hold more value than any other extension.
2. Once you get it picked out, you need to find somewhere to purchase it. I bought my first few domains at GoDaddy.com and have bought the remaining ones from my hosting companies. While GoDaddy is about one of the biggest names out there, I can’t say that I recommend them because of some of their advertising campaigns that they run. I now recommend Namecheap because they are very easy to use and as the name suggests they really are cheap compared to a lot of others!
Pick a host for your blog
The webhost is the company that you pay to store all of your files for your blog. There are also a million web hosting companies out there. I don’t suggest just looking for the cheapest one, because a lot of these companies are not very reliable and your site might be down quite a bit. I like to go with the bigger companies who have a longer track record and are more established.
They may cost a dollar or two more a month when you are starting out and it is well worth it. I have hosted my websites with Dreamhost from the beginning, mostly because I knew a lot of people using them and I got a hosting package for about $7.00 a month. Blue host is currently $4.95 a month.
Then pick a theme. I use woo themes
How I make money with this blog
When I go to family functions or social events I often get a blank stare when I explain what I do for a living. I think people understand the part that I write articles and put them on a website, but when it comes to making money from it, they don’t get it. In this section I will lay it out and hopefully it will help bring some clarity…
CPC Ad Networks
There are a few different ad networks that I use on CPF. The most successful one has been Google’s Adsense program. Basically what they do is read the article that I write and find ads that are relevant to it and display them next to the article. The great thing about it is that by having extremely relevant ads, it actually can be quite beneficial to the readers as well.
For example, if I write an article explaining what an IRA was, but didn’t mention where you could open one, Adsense would likely be displaying ads of places to open an IRA. So as a reader, if I read that article and decided that I did want to open an IRA, the ads would be providing options that the article did not. I am currently doing a few tests with another CPC network called Chitika. Apparently, you can use it in conjunction with Adsense. The jury is still out, but I am interested to see how it compares to Adsense. All things considered, I have found that if optimized correctly, Adsense really can work well. I will explain more about how to optimize it in sections below.
CPM Ad Networks
While Adsense pays on a click basis (CPC), I use other ad networks that pay by the total # of impressions (CPM). At the beginning, these networks didn’t produce much income, but as the traffic grows CPM networks seem to work well in conjunction with Adsense. I use (or have used) ContextWeb, AdClickMedia, Adbrite, Adify, BuzzLogic, and Casale Media. Each has their own strengths and weaknesses and may be suitable for one kind of a site and not another.
Affiliate Product Sales
Basically an example of an affiliate sale would be if you sold lawn mowers and I referred a customer to you, if they purchased you would pay me back a % of the sale for referring them. There are a million options for this on the internet now. The main programs I use are Amazon’s Affiliate program, FlexOffers, LinkConnector, Commission Junction, Shareasale in your site., E-Junkie, and LinkShare. There are many others, but these are a few of the more popular ones available.
I have a very strong policy about honest recommendations. I give my honest opinions about products that I find regardless of how it will affect affiliate sales. For example, I wrote about Cash Crate and updated the article to show what I didn’t like about them. Because Cash Crate has such a generous referral program, I know some people making lots of money from it, but I just don’t feel comfortable recommending it since I had a bad experience using it.
On the other hand there are products like ING Direct, Ebates, Perkstreet Financial, Mint.com, and Sharebuilder that I recommend and also have some sort of affiliate or referral program as well. These are what I love because I can help readers by pointing them to good resources and tools that have helped me and get paid in the process. I know some people don’t have a problem promoting anything that will pay them, but I just can’t, in good conscience, recommend something to someone that I don’t genuinely believe will help them.
Direct Ad Sales
I also sell ad space directly to advertisers. This hasn’t provided much income for me yet and may or may not even be worth my time. I know that in certain niche markets direct ad sales can work out very well, but thus far it hasn’t been a big money maker on CPF.
read the entire article:
Running a home-based business
I know full well that being a full-time blogger (read: how I make money blogging) is not the most common profession and my business is a different than many other home-based businesses. But, business is business, and I am sure there are also a lot of similarities as well.
Being my own boss
This is one of the biggest challenges of self-employment. As someone who spent most of the last 10 years as an employee, it has been a challenge being the boss of myself and keeping myself accountable. I am tough on myself and that is probably the only reason this has worked.
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As funny as it sounds I make mental shifts from boss to employee. So I will spend half a day as “the boss” scheduling out what I will do the rest of the week/month. Then I flip into “employee” mode and work diligently to do it.
I have found that if I don’t set time aside to be “the boss” then I just kind of coast and don’t get nearly as much done as if I have a task list or goal laid out in front of me.
Making sure that the business doesn’t run my life
I decided when I started this biz that it would be my slave and that I would never become a slave to it. For example, I have seen a lot of small business owners create businesses only to find themselves working 80 hours a week because they created something that now runs their life. It is rarely intentional, but it seems that if you don’t intentionally set up a system that keeps you in the driver’s seat then it defaults to eating up all your time.
Tony Robbins once said something that really stuck out to me. He said that we find the answers to the questions that we ask. So many people just ask “how can I make this business successful?” But I intentionally ask myself how I can make it successful and not allow it to run my life.
As a result of continually asking that question, I don’t even see answers that will ONLY cause the business to be successful. I wait until I find the answer that will answer both questions. When I do, then I act.
I am always looking for better ways to manage my time and be as efficient and effective as possible. What has worked best so far is my determining key important tasks and scheduling them as blocks of time each week. I only schedule about half of my working day each day because there are so many inevitable things that come up that need to be done. But I am diligent to do the scheduled tasks each week. As Steven Covey would say, success comes from doing the important things regularly rather than just always focusing onthe urgent. The key here being that often urgent things may not really be that important. And many important things are not very urgent. Which is why so many people never do them!
I started this blog as a hobby back in 2007, I only made about $100 total with it the first 6 months – so a sole proprietorship was the perfect business entity. By the way, if you do nothing, you are automatically a sole proprietor. I didn’t realize this when I started, but if you just start a business and don’t form an LLC, Partnership, etc, then by default the IRS considers you a sole proprietor.
Running the biz as a sole proprietor is the cheapest and simplest – because you don’t have to do anything different. You just mark your business earnings on your tax return along with income from your spouse’s employer, etc.
From what I understand the biggest downside of being a sole proprietor is that you don’t have much legal protection. So if your business get’s sued, they can take your house. That’s no fun.
Forming an LLC
I ran my business as a sole proprietor for about a year and a half until I formed a single-member LLC. There are a few different options when choosing your business entity, but I chose the LLC for a couple reasons.
It was simple to run
As a single-member LLC, no % of ownership needed to be divided up. Really, not much changed from running the sole prop as far as what I needed to do to maintain it. I still get to use a single tax form, instead of one for the business and one for personal.
I am not a lawyer and don’t fully understand the legal protection that is provided. But after doing a bit of investigating, it became pretty clear that an LLC would be safer than a sole prop.
It proves to the IRS that you mean business
Apparently there are a lot of people who create home-based “businesses” to try to pull the wool over the eyes of the IRS. I remember reading that the likelihood of an audit is decreased by 90% for LLCs vs. sole proprietors.
How I did it
I was a bit freaked out about the process, because I had never done it. I thought it was going to cost me a lot of money – it absolutely doesn’t have to.
I was blessed to have a buddy who is a lawyer who volunteered to meet for an hour and we just filled out the online government forms for Missouri. To find the forms you could probably just Google “Your State + LLC”.
It was really a lot simpler than I thought. I think it cost me about $100-$150 to do it. If you are nervous about doing it yourself, you can get cheap (or free) help by doing it through a site like MyCorporation.com. Bottom line: I know there are probably some advantages to hiring a lawyer who specializes in this, but I just didn’t have the $1000-$1500 laying around that I estimated it would cost.
Tax ID number
I also applied for a Tax ID number (basically the Social Security Number equivalent for a business) because I preferred to keep my SSN out of everything and because it was require by my bank to open a business account. It took about 5 minutes to fill out the form and it cost me about $35. You can probably find this on your state government website.
I am kind of up in the air about trademarks. They are an expensive pain to deal with, but if you have something you want to protect, they are necessary. In my case, I wanted to protect my tagline – “Make it. Save it. Grow it. Give it.” especially when I saw a clear instance of someone infringing on it. So if you have something that you think is worth protecting, it might be worth it. But even if you don’t use a lawyer (which is very difficult to do in trademark law) it is an expensive process.
Day to Day
- I use Gmail to manage all my email. It is great because it works as an email hub allowing you to send and receive email from all your other email accounts. I can access it from anywhere and they give plenty of storage.
- I use Google Calendar to set my schedule and manage my time (as best as I know how).
- I use Evernote as my tool of choice for notetaking, storing ideas, or just about anything else. It is truly an amazing tool. I recommend this: how to use Evernote.
- I use a Motorola DROID as my mobile device. I use it to approve comments, schedule tasks, jot down ideas, take notes, even write quick posts from my phone.
- I have a Mac Mini that I use as my desktop. I upgraded the memory and I think it cost me $700. As a recent Mac convert, I will say this Mac has it’s flaws and is expensive, but they make very well designed stuff that makes my life easier. I appreciate that and am willing to pay a premium for it.
- I also have an Compaq laptop that I tote around when writing at a coffee shop. I am using it as I write this and it gets the job done.
A real business address
Similar to how I preferred to get a Tax ID number instead of using my SSN for the business stuff, I felt the same way about my home address. I do work from home, but the address for my business is
121 Civic Center Dr. Suite 250, Lake St. Louis, MO 63367
I got this by renting a mailbox from the local UPS Store for $11/month. I like it because I don’t have to announce my home address to the whole world and it looks a little more professional.
Quickbooks – I use QuickBooks Pro to keep track of all my business financial stuff. It is $300 software, but I actually got it free when they were offering a $300 rebate. I am still not sure why they did that, but I am not complaining.
Some of this is more specific to what I do, but if you run a blog it might be helpful.
- Ecto is my favorite desktop publishing tool for Mac ($20) – I don’t use it as much any more, but it is great.
- I use Gimp (free) for photo-editing and any kind of graphic design stuff.
- Imagewell – For Mac. It is the quickest image editor I have found. It costs $25 (i think) and it is worth every penny for me.
- Windows Live Writer (free) – For PC. WLW is my favorite desktop publisher for my PC.
I do my banking with US Bank. I would prefer to use a credit union, but I couldn’t find one that had a free account. At time when I was shopping for a bank, US Bank was the only one I could find that was free. I have yet to need an actual paper check, so I never bought them. I use my debit card for every purchase.
I also have a Paypal account that is linked to the US Bank account as well. Some of the ad networks I work with only pay using Paypal, so it is a must for me.
How to Create a Million-Dollar Business This Weekend (Examples: AppSumo, Mint, Chihuahuas)
Noah Kagan built two multi-million dollar online businesses before turning 28. He also looks great in orange. (Photo: Laughing Squid)
I first met Noah Kagan over rain and strong espressos at Red Rock Coffee in Mountain View, CA. It was 2007. We were both in hoodies, had a shared penchant for the F-bomb and burritos, all of which led to a caffeine-infused mindmeld.
It would be the first of many.
The matchmaker then introducing us was the prophetic and profane Dave McClure, General Partner of 500 Start-ups, which is now headquartered just down the street from Red Rock.
Mr. Noah has quite the start-up resume.
He was employee #30 at Facebook, #4 at Mint, had previously worked for Intel (where he frequently took naps under his desk), and had turned down a six-figure offer from Yahoo. Since we first met, Noah’s helped create Gambit, an online gaming payment platform and a multi-million dollar business; and AppSumo, loved by entrepreneurs and moms everywhere. He also helped pour fire on both the 4-Hour Workweek and 4-Hour Body launches.
The purpose of this post is simple: to teach you how to get a $1,000,000 business idea off the ground in one weekend, full of specific tools and tricks that Noah has used himself.
He will be your guide…
For some reason, people love to make excuses about why they haven’t created their dream business or even gotten started. This is the “wantrepreneur” epidemic, where people prevent themselves from ever actually doing the side-project they always talk about over beers. The truth of the matter is that you don’t have to spend a lot of time building the foundation for a successful business. In most cases, it shouldn’t take you more than a couple days.
We made the original product for Gambit in a weekend. “WTF?!” Yes, a weekend. In just 48 hours, some friends and I created a simple product that grew to a $1,000,000+ business within a year.
Same deal for AppSumo. We were able to build the core product in one weekend, using an outsourced team in Pakistan, for a grand total of $60.
Don’t get me wrong–I’m not opposed to you trying to build a world-changing product that requires months of fine-tuning. All I’m going to suggest is that you start with a much simpler essence of your product over the course of a weekend, rather than wasting time building something for weeks… only to discover no one wants it.
I know what you’re thinking: “Yes, Noah, you are SO amazing (and handsome), but what can I do this weekend to start my own success story?”
Here are the steps you can take right now to get started on your million dollar company:
Step 1: Find your (profitable) idea.
At this stage, you are simply looking for something that people are willing to spend money on. So grab a seat and write down a list of ideas that you think might be profitable. If you’re having trouble coming up with ideas, try using the methods below to speed the research process along:
Review top sellers on Amazon. Find products that already have guaranteed customers, then build something complementary. A good example of this is Dodo making a gorgeous $60 case to buy for your iPad (which costs over $500, and over 5 million sold).
Think of all the things you do on a daily basis. Anything done more than once has potential for a product or service to improve the process. For me, one of those products was a mirror I could hang in the shower. It saves me tons of time while shaving, and now I don’t know how I ever lived without it.
Be cognizant of products you use and frequently complain about. Before Gambit, we were constantly asking our payment tool partners for certain features, yet our requests were always rejected. That was the impetus for us to create Gambit for our own games.
Check completed listings on eBay. This allows you to see how well certain products are selling. It’s also an easy way to measure sale prices of items and gauge the overall percentage of the market that’s receiving bids (i.e. in demand).
Look for frequent requests on Craigslist gigs. These listings are from people actively searching for someone to give their money to in exchange for particular services. Try searching for certain keywords (e.g. marketing, computers, health) and keep track of the total number of results displayed. Evaluate the most popular keywords and see if you can create a product or service around those requests.
Browse the Q&A on LinkedIn. On average, LinkedIn users are worth $134, so there is a good chance they’ll have money for you if you can provide solutions to their problems.
Step 2: Find $1,000,000 worth of customers.
Now that you’ve found an idea, it’s time to assess whether there’s a big enough pool of prospective buyers. In this step, you’ll also want to ensure your market isn’t shrinking, and that it fares well compared to similar markets.
For example, let’s say you decide to build information products for owners of Chihuahuas (remember “Yo quiero Taco Bell”?). Here’s how I would check to see if there are enough customers:
1. Search Google Trends for the term “chihuahua” and other similar words (e.g. poodle, dogs) for comparison:
We can see that the word “chihuahua” has a decent search volume (relative to “dogs”), and that “poodle” isn’t as popular. It also looks like the number of searches for “chihuahua” has been relatively stable for the last few years.
2. Double-check on Google insights:
Google Insights is great, because it breaks down the search data by location (i.e. what regions the searches are coming from), by date, and what they’re searching for (news, images, products). Click here to see the full report for the above chart.
3. Look at the total number of people available on Facebook for dogs:
3.1 million. Not bad, not bad.
And for Chihuahuas:
84,260 people. Score.
You can also see if there is a large property that you can piggyback on.
Paypal did this with eBay, AirBnb is doing it with Craigslist home listings, and AppSumo looks to the 100 million LinkedIn users. If you can find a comparable site with a large number of potential customers, you’ll be in good shape.
What helped me with finding $1,000,000 worth of customers for AppSumo was studying my successful competitors; specifically, Macheist. Their site did a Mac-only deal that generated more than $800,000. Macheist shares their sales revenue publicly, but you can use your own business acumen on the CrunchBase list to see which business you want to replicate. For instance, you might research Airbnb.com, discover that they have a profitable and growing marketplace, then decide to create a similar service for alternative verticals.
I like to create a Google Spreadsheet of the key numbers for my competitors’ businesses. Below is an example of what that might look like for Macheist in their Mac bundles. [Warning to the haters: This may not be accurate, but I used these numbers just to get a rough idea of the business’ potential.]