How to Research for an Online Business

You can find great business ideas all around you. In fact, every successful business had humble beginnings in the mind of the founder of the business. For example, in the 1950s a small store named the Walton 5&10 opened to offer items people wanted at low prices. The store stayed open later than many other stores and ran various sales throughout the year. Today, Wal-Marts and Sam's Clubs are located in many cities throughout the USA and beyond. One of the first steps to starting a new online business is to research the business's feasibility.

Instructions

Difficulty: Moderately Easy

1. Read information describing the size of the industry in which the business will be, trends in the industry and the typical life cycle in the industry.
2. Investigate the competition in the industry to find out what the major competitors are, the number of competitors, the difficulty of entering the industry and typical pricing for goods and services.
3. Determine the market potential of your online business idea in specific locales. Learn about emerging markets, niche markets and market revenue.
4. Project possible sales goals by offering a competitive product or service.
5. Determine the type of facilities you will need for the online business and any associated costs.
6. Find out the costs of operating the business through a web host or business web server, establishing a merchant account and developing a website.
7. Discover costs associated with raw materials that must be purchased or wholesale products that must be obtained before a sale.
8. Study the projected profit margin of the cost to produce your particular goods/services and the sale prices.
9. Identify the personnel needed to operate the online business and the compensation each employee will receive.
10. Study conclusions from each aspect of the research.
11. Make a final determination on starting the business.

Tips & Warnings

• As your business grows, consider hiring a private company to do specific market research for your company to get more accurate results.
• A great way to gather information is to peruse industry-specific associations, magazines and websites and make phone calls to industry experts.
• You can purchase some turnkey online businesses that provide you with everything you need to get started for a set price.
• Don't forget legal fees, attorney fees, consulting fees, government fees and licensing fees.