The Basics of Building an Online Business

As an internet marketing guide, a lot of people ask me how to start and grow an online business. I tell them this: There's a proven sequence of steps you can follow to guarantee your success. How do I know? I've seen thousands of people start and grow online businesses following the same exact process.

Step 1: Find a need and fill it.
Most marketers make the mistake of finding a product before they have a market. But unless people are actively searching for your product online, you'll never make a sale. The trick is to find a group of people with a common problem they're trying to solve and then solve it.

Thankfully, the internet makes market research easy. Here are some easy steps for researching your market:

• Visit online forums to see what questions people ask and what problems they’re trying to solve.
• Figure out which keywords a lot of people are searching but not many sites are competing for.
• Check out your potential competitors by visiting their sites and taking note of what they’re doing to fill demand.

After you've done this, use what you’ve learned to create a product for a market that already exists--and do it better than your competitors.

Step 2: Write sales copy that sells.
On a website, your copy has to do the selling for you. There’s a proven formula for writing sales copy that'll take visitors through the selling process from the moment they arrive:

• Arouse interest with a compelling headline.
• Describe the problem your product can solve.
• Show them why you can be trusted to solve the problem.
• Add testimonials from people who've used the product.
• Talk about the product and how it benefits the user.
• Make an offer or a guarantee.
• Create urgency.
• Ask for the sale.

Throughout your sales copy, focus on how your product or service is uniquely able solve people's problems or make their lives better. Think like a customer and ask, what's in it for me?

Step 3: Design and build your website.
Once you’ve got your market and product and you’ve nailed down your selling process, you’re ready to build your site.

Remember to keep it simple. Your website is your online storefront, so be sure to make it customer friendly. You have less than 10 seconds to grab a visitor's attention before they're gone. Some important tips to keep in mind:

• Use a plain, sans-serif font, like Arial, on a white background.
• Make your navigation clear and simple and keep it consistent throughout your site.
• Only use graphics, audio or video if they enhance your message.
• Include an opt-in offer so you can collect e-mail addresses.

Step 4: Use search engines to drive targeted buyers to your site.
How do you get traffic to a brand-new site? Pay-per-click advertising, which has two advantages:

• The ads show up on search pages immediately.
• They allow you to test different keywords, headlines, prices and selling approaches.

Not only do you get traffic immediately, but once you've figured out what keywords are working best, you can use them throughout your copy and code, which will help your rankings in organic search results.

Step 5: Establish an expert reputation for yourself to drive even more traffic to your site.
People use the internet to find information. If you provide valuable information for other sites to use--and include a link back to your site--you’ll get more traffic and better search engine rankings. Some ideas for establishing yourself as an expert include:

• Give away free content, like articles, videos or other useful information, and distribute that content through online article directories and social media sites.
• Include “send to a friend” links on your site's valuable content.
• Become an active expert in industry forums and social networking sites where your target market hangs out.

If you use these tactics, you’ll reach new readers. But even better, every site that posts your content will link back to yours, and search engines love links from relevant sites and will reward you in the rankings accordingly.

Step 6: Use the power of e-mail marketing to keep in touch with your visitors and turn them into buyers.
When you build an opt-in list, you’re creating one of the most valuable assets your online business can have--permission to send visitors e-mail. Why is e-mail marketing so valuable?

• You're giving potential customers something they've asked for.
• You're developing lifetime relationships with people in your target market.
• The response is 100 percent measurable.
• It's cheaper and more effective than print, TV or radio advertising because it's highly targeted.
• It can be almost entirely automated.

Anyone who visits your site and opts in to your list is a very hot lead. And there's no better tool than e-mail to let you effortlessly follow up with those leads.

Step 7: Increase your income through back-end sales and upselling.
One of the most important internet marketing guidelines is to develop every customer’s lifetime value. At least 36 percent of people who have purchased from you once will buy from you again if you follow up with them. Closing the first sale with a customer is by far your most difficult task--not to mention your most expensive one. So here's how to get them to buy again:

• Offer products that complement their original purchase.
• Send out electronic loyalty coupons they can redeem on their next visit.
• Offer related products on your "thank you" page.

If you reward customers for being loyal, they'll become even more loyal to you in return.

Step 8: Start an affiliate program to maximize your sales and revenue.
Once your business is up and running, it's time to launch your affiliate program. Affiliates are people who promote your products on their sites for a cut of the selling price. Every time they send you a buyer, you pay them a commission.

An affiliate program is a simple, low-maintenance way to grow your business. Once you get your program set up, all you have to do is share your marketing materials with your affiliates and send out checks when they make sales.

By doing this, you don't have to go out and spend money on advertising--your affiliates do the advertising for you. Better yet, you only pay them when they make a sale.

The internet changes quickly, but the principles of how to start and grow a successful online business have changed very slowly in the more than 10 years I’ve been in the business.

If you’re just starting out, stick to the sequence of steps in this quick guide. If you’ve been online awhile, do a quick review and see if there’s a step you’ve been neglecting or never got around to doing in the first place. You can’t go wrong with the basics.

Derek Gehl is Entrepreneur.com's "E-Business" columnist and the CEO of the Internet Marketing Center, an internet marketing firm that has helped thousands of people learn to start and run their own online businesses.He has just released the 2007 edition of his comprehensive Internet marketing guide, The Insider Secrets to Marketing Your Business on the Internet.