Alright, let's get the myth out of the way first.

• Running a business in virtual worlds is easy, because it's a video game. Wrong.
• People will buy anything, because it cost next to nothing and it's a video game. Wrong.
• Second Life business is going to make me a lot of money right away, so I can quit my real job. Wrong.
• Money made from virtual worlds are tax free. Can you hear Uncle Sam's laugh? Wrong.

If those myths aren't true, then why am I doing this? "Because it's fun and I love what I do" this is the answer you'll get from any business owners regardless if it's in real world or virtual worlds. The bottom line is you have to love what you do.

Besides it's fun and a good conversation piece. (How often can you tell some one that you just made some real money out of thin air?)

Here are some of the benefits of starting business in Second Life.

• The upfront cost in starting business in virtual worlds is very little, often less than 20 dollars compare to thousands of dollars real life business would need right from the start.
• Second Life is likely to succeed in the world of virtual worlds. See my other hub about the raise and fall of virtual worlds. You don't want to start a business in a metaverse where it may not be there a year from now.
• Second Life is the most active metaverse and has the largest active population (besides WarCraft, I think..). That translates to more shoppers
• True 24/7 Shopping. Unlike online ecommerce, it gets very little business after midnight. That's because search engines like Google and Yahoo are regional which only show results within the regions. Second Life is true 24/7, Europeans log in and shop when we're asleep and vise versa. 30% of my sales occurs when I'm asleep
• Automated business & no inventory cost. The beauty about virtual goods is that there's no cost of materials, no inventory to control and no cost producing the goods. The only cost you have is the initial development fee. After that the break even point, it's all profits and self running. My clients would love it if it works like this in real life (I'm a product developer in real life)

Second Life is not exactly the mirror image of real life. It has a unique culture of its own. You need to just dive in to it and explore, socialize with others and get a feel of this crazy virtual world.

1. Open a free Second Life account. 
2. Go explore every aspects of virtual world, soak in the virtual world culture. 
3. Socialize with others, make friends and create your network.
4. Join groups that can help your business. If you're not good at building 3D stuff, you can join the Builders Group and ask for help or hire a builder to build your creations.
5. Research what sells in SL, who are the market leaders, who will be your competitors and why they are doing well.
6. Learn to build stuff in sandbox. This will give you an idea what is possible and what is not. 

There are SL mentors who help newbies inworld. If you don't want to spend hours and hours on the SL the first week (which most of newbies do), then check out one of my picks at the right. The guide will help speed up the process.

So now you're a SL bad ass who took SL head on and soaked everything it threw at you huh? Good. Now you have an idea what business you want to run in SL. Do you have a business plan? "What? Business plan for video game?" you might ask. Yes, just like any other business. You need a plan, a strategy, a SL monopoly plan. Whatever you want to call it, you need a plan.

Not just a business plan, but you'll also need a plan on how you going to manage your time between family, day job and SL business. It can be stressful if you don't plan it out ahead of time.

If you have no prior business experiences, then it would be a good idea to read up on it. I highly recommend Getting Things Done. That book changed my life 10 years ago and I wished I've read it 10 years earlier.

Now you have a simple business plan and ready to start. There's no need to become a SL Primer account and buy land right away (unless, you plan to be the Donald Trump of SL). SL land is the biggest price ticket item in the SL. A decent size land with good location can cost from couple hundreds to thousands of US dollars, not to mention the monthly land fee. These costs add up fast and can stop your business on the track before it can take off.

Your best option is to stay as a free basic SL account, build your creations in sand box (an area where you can build your stuff outside of your land).When your business is ready to open its door, rent a land on weekly basis, Only upgrade to SL premier account and buy a land when your business generates income that can cover your basic overhead (monthly land fee & SL membership fee, and others).

Remember we're here to make profits while having fun. Uncle Sam doesn't care if you're having fun or not in SL. He only cares if you're making profits or not. If you do, he wants some of it. So it's crucial to keep all business associated accounts from your personal accounts.

Here's a check list:

1. Write a simple business plan
2. Check with your state & city office to see if you need a business license. Income from virtual worlds is considers as self-employed income (unless you spend them all inworld and never cash them out to real money.) Some cities such as Los Angeles requires self-employers to get business license. 
3. Get a free email account that match with your avatar's name. Use it on all your business related activities. Update SL account with the new one.
4. Get a PayPal Premier Account. I'd suggest you to get new one, so it doesn't mix with your ebay activities. Paypay debit card is a great way to spend your fund in Paypal account, it saves transaction fees. I also sign up PayPal Plus Credit Card. That gets you verified status without linking your personal bank account to PayPal which I personal don't like to do.
5. Set up a good record keeping system. Personally, I find spreadsheet is best way to keep track of all SL, XStreet SL & OnRez transactions and your business growth. MS Excel is not cheap, alternative is Google Docs which has spreadsheet like Excel and it's FREE!
6. Set up Xstreet SL & OnRez accounts: These two deliver majority of my customers to my inworld shop.

Now you've setup all the accounts and documents, and are ready to sell your creations. You need to setup a store which needs a land.

Rent a land for your main store. Unlike real life, location of your store is not important in virtual worlds. However, the region where your store is located is very important. A region aka SIM: a 256m x 256m (65,536 m²) area hosted by a single simulator process (sim). There are two types of SIM. Normal SIM & Openspace/Homestead SIM, the difference between the two SIMs is speed. Without going into geeky details. Always look for a land in Class 5 SIM with minimum activities. SIM will be slow (SL term is lag) when there are too many activities going on, avoid SIM with clubs and malls. It's like your computer, it runs slow when you have too many programs going at the same time.

1. Set up the shop/office. Best way to do it is to buy them from other builders thru Xstreet SL or OnRez.
2. Package your creations to sell. There are many ways to do it. I'll let Torley Linden's video tutorial to do the work for me. IMPORTANT: Make sure you have the Next Owner permission set correctly, or you're hard work creations will be pass around in SL as freebie.
3. Setup the store, the easiest way is to buy a building from Xstreet SL or OnRez. You can start to arrange your creations in the store.
4. Run tests. Open another free SL account (aka ALT), ALT serves two purpose: Backup & test dummy. Use ALT as dummy customer to buy your products from the store, make sure the transaction goes through and product gets deliver. Most importantly, use ALT to test if you have set the permissions properly. Your customer can turn around and sell unlimited copy of your creation if the permission is not set correctly.
5. Get your stuff on SL Search. Now everything is ready for the grand opening. Get the store on SL Search. Watch Torley's tutorial.
6. Place ads in SL Classified. It's under your profile's Classified tab. The order of search result is based on how much you paid for the ad. Instead of put out one ad about the store. I'd suggest to put out a multiple ads about the products and use them to bring traffic. Use specific keywords for tags.
7. List all items on Xstreet XL & OnRez. These are your traffic generators. Always put a SLurl link (Teleport link) in each of your listings. So can come to your inworld store. Best way to create traffic is to offer good quality freebies in the store.
8. Monitor store traffic. Install a senor to monitor store traffic and measure your ad campaign success. 

Once the business generates revenue that covers the costs of SL Premier membership and land tier (monthly land fee), you can upgrade your SL membership and buy a land of your own. Keep ALT as a free account.

Upgrade to SL Premier Account

1. Buy a land, apply the same rules as mentioned above. There are two types of land: Mainland & Private Regions. Always buy lands on Mainland, because it's operate by Linden Lab. The risk of buying land from private regions is if the owner of the region decide to leave the SL, then you'll have to move. Even worse, if the region owner didn't pay land tier to Linden Lab. The region will be shout down without warning and all your work will be lost.
2. Expand your products. Just like business in real life, you have to keep on coming out with fresh products to keep your customers happy.
3. Set up satellite locations. This is useful to expand your brand. Let's say you sell trendy clothing, you would want to rent a space from a popular club's Teleport landing area. The space is usually small, use network vendor system in situation like that.
4. Affiliate programs is a good way to spread your brand, offer commissions to those who sell your products. It also to add value and income to your store when sell other's products. Use the example above, you may want to contact a shoe or hair maker whose products are good matches with your clothing lines.

Now you have the blueprint, what are you waiting for? Go make some money!