When we do business online, sometimes we forget that we are dealing with something that is global, something so huge and so potent. We forget that we are not just buying milk from the local grocery store or that we are not just selling lemonade from a lemonade stand. We always need to be reminded that the online business is a real business. It deals not with paper money, but real money. It has the complete potential to support you and give you the power to become an independent entrepreneur. Just because your business is online doesn’t mean you shouldn’t treat it like a real business. This is the second post in a series looking at some of the most important elements of a strong online business model.

Build A Smart Model

Building a smart business is easier than you think. All you really need is some basic knowledge of the internet and some business common sense. The rest will all follow easily. How do you do this? Just follow some of the tips below and you will soon realize the potential of your online business to be a fully automated and smart model that could easily earn you extra money without giving it much effort.

Tip # 1. Diversify Income Streams.

Everyone know putting all your eggs in one basket is a bad idea. The internet is a very potent source of income and you should optimize it by diversifying the way you make money in the internet. One method or one source is not enough to keep your income steady and flowing. You can easily add to your income if you use different methods ( such as having adsense on your site, hosting ad banners, etc) and add multiple streams of income from diverse sources. Why should you do this? Here are a few reasons:

• Doing this can protect you from losing everything when advertising terms change or a partner decides to pull out. By having more than one source of income, you could have the option of pulling out when you need to or have a steady source of income even if one source fails or does not perform up to your standards.
• Doing this, will require a lot of work, however, the security is worth it! By having multiple sources of income it also means that you double the work. You check more things, it requires you to answer to more people but the financial security of doing this is worth it. The double work pays off especially when you realize that it gives you double the income for a bit more of your time. Soon, if you work hard enough, the rewards will be greater and you will be earning more than you expect with a few clicks.

Tip # 2. Build auto-pilots to fund future projects

We all know that in order to make money,we have to spend a little money. However, if you do not have the capital at the moment, and you have a project in mind, it would be great to build capital for your next project by finding easy ways to make more money on the net. You do not have to spend a lot of time on the net for it. You could do this by building muse projects.

In the 4-hour Work Week, Tim Ferriss talked about muse projects. Muse projects are simple, single problem solutions, that once started, could run on their own yet provide some income. It doesn’t have to be a lot. What could you do with $500 a month to put toward your Internet Business? Adsense sites, affiliate products, hosting ad banners and similar avenues, any of these could be turned into auto-pilot projects. Add enough of them, and they may become your whole income model!

Tip # 3 Think global

Do not forget that the internet is not only a local network. It reaches every part of the globe at all times and it is a 24 hour money making network that never sleeps. When you’re developing your projects, remember that some of your potential customers will be outside the US. Many of the products sold online are not bought by local buyers, you will find that when you have an online business most of your customers and market would be outside the country. In fact, you may even want to target prospects outside the US and make money by offering products and services targeted for these audiences.

Never limit your target market to a certain region geographically if you are in the internet. It is smarter and wiser to remember that in the internet, you have the whole world at the palm of your hand and within reach.

Also remember to take advantage of global arbitrage when it comes to talent and labor. There are thousands of well educated, well qualified people around the world willing and able to help you build your online businesses. Look at sites like oDesk.com to find one that can help make your project a global success.

Tip # 4. Always keep your flagship.

I tend to believe that you should solve one problem with one solution. This manifests itself in my online business as hundreds of web sites, each intended to address and solve one problem. If you focus on addressing the needs and wants of a single market, you can effectively find out and be an expert on their needs and wants and anticipate the market demand easier than by solving many problems and addressing many markets at once. Though others may disagree and your experience will vary, this is just the way I’ve chosen to structure my business.

One reason is for ease of sale. That’s right. I structure my business so I can sell any part of it if the opportunity presents itself. It is easier to present and design a website if you have a single market in mind. You can singly attack and attract your target market this way and you can build a brand name for yourself that way. Being known for a flagship name could help make you a household name in the market you choose and easily bring more people to your online business.

And as of today, I don’t see any reason why I’d ever want to get rid of my flagship property, jtrigsby.com. I mean, lets face it, I’d pretty much have to change my name for it to become useless for me! Keep your home base just like a manufacturing business would keep their headquarters. No matter what they make or sell, the headquarters remains the same. Your flagship would identify you, no matter what you sell or what service you provide to different markets, people would always find you there and would bring business to you if you are known by that single name.

Building a smart model with the tips above could be easy for some and a challenge for some. Why don’t you try and write a one-page online business plan and see if it is possible to apply the aforementioned tips to your online business. In that business plan you should identify your objectives, and state why you are starting an on-line business.

Then, you should identify your market or the people who are you trying to reach and sell to. Give them a name, describe them, and make a list of where they spend money online today. Ask yourself what they need and what you could provide them as well.

Identify your competitors. Start with the big players then work down to the second and third tier. How do they reach their customer base? What can they do that you couldn’t? What do they do that you could do better? Identify your strengths and weaknesses against them.

Finally, think about how you’re going to get out. An exit plan is a great way to ensure that you will not lose everything when you close down shop. Will you sell to someone else or just close up shop? What will you do when you reach your objective? What are the determining factors that would make you close up shop?

By answering these questions, you would have created a solid plan of action that you could apply to your own business. Hopefully, you have built a smart model that could generate you money easily and could gain profit from the very rich and potent online market that you choose.

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