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The best way to start an online business

Updated on June 18, 2014

My early business experience

When I first started in business in the late 1990s I was doing consulting work. This involved website development and hosting, and search engine optimisation.

In order to be successful in this business I needed to promote it, and find some customers who wanted the services I was offering.

I didn’t know any better, so I did advertising, direct mail and cold calling. This was expensive and very hard work, but I did get some customers from it.

It was hard because I was contacting people and trying to get them to buy from me during this first contact, which isn’t very easy to do.

After a while, a friend invited me to join a local business networking group. I went along to the regular weekly meetings, got to know the other members and told them what I did.

Please note, that we weren’t trying to sell anything to each other at these meetings. Or were we?

Yes we were. The thing we were selling to each other was ourselves.

Eventually, we got to know, like and trust each other. And the result? We were able to provide business referrals to each other from our other business contacts.

This was a much easier, and more enjoyable way to develop my business. The difference was clear right away.

People buy from those they know, like and trust

Why was this “warm” referral approach better than my earlier “cold” direct contact approach?

With the “cold” approach, even if I got an appointment I often didn’t get the business. I would produce a proposal for the prospective client, but when I called to follow up I was told they had hired someone else to do it.

Later I found out that they had given my proposal to someone they already knew and asked them to do the work instead of me!

It was because they already knew, liked and trusted this other person who was given the project. This “cold” approach hadn’t given them a chance to get to know me.

Once I started using the “warm” business referral route, the prospective client was already looking for what I offered. Because I had been referred they were expecting my call.

And when I sent them a proposal after our meeting(s) their first question was often, “when can you start?”

The difference was that although I had only just met the client, they knew, liked and trusted the person who referred me, who in turn knew, liked and trusted me.

But what’s this got to do with online business?

When starting an online business people often rely on the the search engines to bring them customers. They try to get their websites ranked high up in Google when people search for what they are offering.

Then they hope these people will click through to their website and buy something.

Recently it has become much harder to rank well in Google without a great deal of work. So this has become harder than ever.

If you are able to produce high quality web page content regularly, and other high quality websites link to it, then it is possible to start an online business like this. In fact lots of people tell me they do.

But it isn’t easy and it seems to me that this is not the best way to do business online. Why is that?

You shouldn’t depend on Google (or their friends)

If you start an online business and depend on being found in searches, then that is the online version of the cold contact method I described for offline businesses. You are expecting people to find your website and buy from you on their first visit.

In my offline business people were stuck with me in their offices for a few minutes listening to my pitch. Online, they would probably just click the “back button” and be gone. Possibly forever.

Also, Google changes the rules from time to time, and there are plenty of examples of online businesses that went out of business when Google decided not to rank them any more.

You don’t want this to happen to you. So don’t rely on Google (or any other search engines either). They can take their ball home at any time.

So what should you do?

You should set up a website that encourages people to give you their email address. Then you can keep in touch, and they will get to know, like and trust you.

Why would they do this? Because you will give them with some information they find useful, and they will want you to send them more information in future.

With their email address you can keep in touch and develop a relationship with them.

This is much more like the offline business referral method outlined above. It enables people to get to know, like and trust you.

This means that whenever you do recommend a product to them they are more likely to buy it, because they trust your judgement.

If it’s your product you get paid. If it’s someone else’s product you get a sales commission, and you get paid.

But they have to trust you! And don’t abuse that trust. That means no spam!

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