Understanding the Philosophy and Economics of Online Business Opportunities
Many people are attracted to online businesses for several reasons. They can be run easily from home using your existing computer, so that the start up costs can be minimal. They promise a way to make extra money and even replace your current job. If the thousands of opportunities advertised on the Internet are to be believed they will also make you very rich!
The truth is that a large number of people will have a go at developing a business based on the Internet but very few of them will ever become rich from it. The reason for this is that any business needs input that will be associated with the eventual output. Thus if you consider a retail clothes shop you might expect to make a return on any capital invested of around 10 percent. If interest rates at your savings bank were only 4 percent you would be interested in putting it into the retail business for the extra return of 6 percent you would get.
When property prices are on the rise, any investments made can allow your money to work for you giving a 10 to 20 percent return every year if you are fortunate.
Why then do business seekers expect to start up an Internet business with little capital from home and expect to make huge profits within weeks? No business can do that. It is true that some businesses can make high profits – often termed ‘super-profits’ – but only for a limited period. New ideas and methods will earn their proprietors bigger returns before competitors enter the market and profits drop to expected levels for a mature market.
Although e-commerce and Internet Marketing continue to be a growth industry, the market place is relatively mature and there are a large number of participants. There are no super profits to be made on the Internet using current methods. Newcomers to Internet business are often disillusioned for this reason.
However, it is possible to make money from the Internet. Forget the chance of easy riches and treat the business properly. Your major investment will likely be your time, so the amount of time you can put in will be reflected in your results. As you learn about the business you will understand where financial investment can increase your profits, in the same way as it does for any business.
Finally, once you appreciated that time, effort and resources must be applied to any business in order to make money, do not forget also that the business must be run well, costs monitored carefully and wastage avoided. Putting all these together will give you a sporting chance for success.