What's Your Business Plan?

5 questions to consider before starting an online business

by Janelle Elms
- Aug 28, 2008

Being an entrepreneur is definitely the "in" thing to be at the moment. It seems like at every social function I attend there are more and more people claiming to run their own business.

However, most of these are "wantrepreneurs." They want the notoriety that comes from the title; they want the tax write-offs; they want to own the dream of wealth. However, once they find out there isn't a secret tool, or a $197 piece of software that will help them get rich overnight, they become very disillusioned and don't want to work for it. I often hear them blaming everyone else for their lack of success, when it was really their lack of treating it like a real business—which involves lots of hard work, planning, and a vision.

Thousands of new people flock to eBay daily in pursuit of this dream of running their own business. I don't blame them—with over $125,000 a minute being sold on eBay, very low overhead and many of the online tools provided for you, it sounds like the easy street to success. Yet very few of them are successful due to one simple reason: They treat eBay like a garage sale and—no big surprise—get garage sale prices.

There are many of us who are making a successful living selling on eBay and other online venues, but we did it with initial business planning, goal setting, creation of a vision and LOTS of hard work—just like you would for any other soon-to-be successful startup.

Here are the five main questions I ask a client to consider before going into business on eBay or any other selling venue:

1. What is your motivation for starting a business on eBay?

O.K., for everyone who said "money," try again. That is not your true motivation—you can make money anywhere, even working at McDonald's if you choose. Your true motivation comes from your passion.

  • Are you tired of someone telling you how much you are worth in a paycheck each week?
  • Do you want to earn enough to pay off the house early?
  • Do you have a new idea or product, and want a marketplace to do your initial testing?
  • Do you want to be able to plan your day and spend more time with the kids?
  • Do you want to start an online non-profit to help others?

Whatever is really driving you to run your own business will be your starting point for your vision for the company. By having that to focus on, your path to success will always seem within reach.

2. Who are you going to be on eBay?

Running a business for an extra $500 a month is very different than setting up a $50,000-a-month business

Many people ask me for the "steps to success": "Just tell me what I need to do to be successful." Boy, I wish it were that easy. Based upon your motivation for going into business, your steps to success will be different than everyone else's.

  • Are you going to work part-time or full-time?
  • Are you looking to make $500, $5,000, or $50,000 a month?
  • Are you going to sell for others or are you going to source the products yourself?
  • Are you going to sell a few big ticket items, or many small ones?
  • Do you want to sell in hot niches where your marketplace is constantly changing, or in a consistent niche where your product lines remain similar?

Running a business for an extra $500 a month is very different than setting up a $50,000-a-month business. Without this initial determination of who you are going to be, it will be difficult to start creating a roadmap to success.

3. What does your buyer want?

It doesn't matter what you want to sell, it only matters what the buyers want to buy. I am not sure why so many sellers make this step hard by adamantly selling what they want. If the buyers are already trying to spend money on a certain product, wouldn't it just be easier to sell that product?

  • What is in demand today?
  • What niches are currently being purchased by consumers?
  • Are there consistent products being purchased, consumed, and bought again?
  • What is in your newspapers, magazines and advertising that the big companies are selling? Do they want brand names, or not?

I guarantee that if you wanted to sell Beanie Babies, you would have a very hard time finding a customer to spend money with you. But if you decided to sell Gibson guitars, you would have a built in marketplace looking to spend money on these products due to consumer demand.

4. What does your customer look like?

Once you know the lifestyle of your customer, marketing to them becomes much easier

The main success principle I teach is "You have to stop thinking like a seller and think like a buyer." You can only do that if you know who your customer is. So often, clients tell me that they want everyone to be their customers. This is actually not true. There is an ideal client that fits exactly what your main demographics are. Eighty percent of your customers should only take up 20 percent of your time—so then you should work on getting rid of the other 20 percent and concentrating on attracting that 80 percent!

Obviously knowing what basic demographics fit your ideal client are important (such as male/female, age, etc), but take it a step further:

  • What do they do on the weekends?
  • What kind of car do they drive?
  • If they take vacations where do they go? Local? International?
  • What music/radio stations/TV shows do they watch?
  • What search engine do they use?
  • Do they work in the "real world" or online?

Once you know the lifestyle of your customer, marketing to them becomes much easier. You can now create keywords that attract that buyer. Plus you won't be throwing your advertising dollars into the fog—you will already have a target marketing area to spend your money.

5. How is your business going to end?

This is probably one of the most important questions you need to answer before you start any business. If you don't know the ending point, how do you know how to get there from the starting point?

  • Are you going to license your product?
  • Sell your business to the highest bidder?
  • Become a chain store?
  • Leave the business to the kids?
  • Be bought out in a merger?

After answering these five important questions, you are then ready to move on to filling in the rest of your business plan. The Small Business Association (SBA) has some great sample business plans to help you get started. Remember, without knowing where you are heading, how will you get there?

Choose Success.

About the Author

Janelle Elms is a best-selling author, inspiring educator and Visionaire of the OSI Rock Stars. You can hear her on wsRadio every Wednesday on Ask Janelle Radio. Learn the success information you need to grow your business at www.osiRockStars.com. For step-by-step training on how to set up an eBay Store for maximum exposure and profit, visit One Percent Coach.

Opinions expressed here may not be shared by Auctiva Corp. and/or its principals.

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