Lose the fear factor

When you start an Internet business for the first time the fear of failure can hold you back.

I’ve talked to a lot of people who have found a promising niche market with a problem that needs solving. They’ve come up with a product or service that would solve that problem…

… But they’re paralyzed about taking the next step. It LOOKS like it’s got moneymaking potential, but what if they put in the time and effort — and possibly money — and it flops?

The fear factor can stand between a good idea and a real, profitable business.

That’s why validating your market after you’ve found a niche is a crucial step you cannot afford to skip.

Of course, there’s no way to completely guarantee success… but ask yourself the four questions below. If you can check every box, you’ll know — as far as possible — that you’re onto a winner.

Once you’ve found a potential niche product or service, ask:

1. Is there a demand for your product or service?
   
   You need to make sure there are enough potential customers out there to keep you in business.

   Are people actually trying to solve this problem on the Internet and NOT finding a suitable solution? If you’ve done keyword research to find a niche market, you should have a good idea of this already.

   Don’t overestimate the numbers. Just because you think that every cat owner in America needs to buy your revolutionary cat bed doesn’t mean they will. A good number to use is 2%: if 2% of the visitors to your website become customers, you’ll be doing well.

2. Is there any competition already supplying the market?

   Search for your top keywords and look at the rival sites that come up. What do they sell and how do they make money?

   Most sites you find won’t be actual competition — they may just have some related content, or be luring traffic for the sake of advertising revenue.

   When you find real competitors offering something similar to what you want to sell, dig deeper into their businesses.

   What can you do better than they do? Build a more professional, easier-to-use website? Write better pay-per-click ads for the same keywords? Put more keywords in your copy and code to attract the search engines?

   These answers will put you ahead of the game and give your potential customers a unique reason to choose YOU over your rivals.

3. Will you get high-quality traffic?

   Are people looking for something free or will they actually buy from you?

   Search for the terms (free) + (your keyword). Is there something competing with your product for free? If so, people won’t pay for your version.

   It’s also a good idea to search Amazon and eBay for previously sold items to see whether people are willing to buy products similar to yours.

4. Does your Internet business have a high lifetime value?

   Lifetime value means the total value of each customer to your business as they buy from you again and again.

   Can you turn one-time buyers into repeat customers? Are there "add on" products or services you could offer to develop lasting, valuable relationships with them?

   If you have a single product or service, try to come up with more things your niche market would buy — because it’s way easier to sell to customers again than to develop new customers.

Once you’ve thoroughly — and honestly — assessed your Internet business idea by answering these four questions, you should feel much more confident about making it a reality.

So do your research and defeat the fear factor.

Photo by Sam UL on Flickr. Some rights reserved.