Ensuring Profitability in a Web Based Business
How do you ensure that your web based business is profitable? Some entrepreneurs run profitable web businesses based on selling a product such as cosmetics, while others promote services such as bookkeeping. Whatever direction you choose, the key to running a profitable web business is following these strategies:
2.Be ready to reinvent yourself as the market dictates.
3.Always keep one eye on the competition.
Each strategy and its effect on a running profitable web business will be explored in the paragraphs that follow.
Profitable Web Business Strategy 1: Stay Educated
This strategy for ensuring a profitable web business doesn’t mean literally returning to school. It refers, rather, to keeping abreast of changes that can directly affect your web business’s profitability. And in today’s fast paced web based markets, business-changing events happen regularly. Staying current with ongoing education one key to remaining profitable.
As an illustration, consider how rapidly technology has changed in the past few years. LinkedIn, Facebook, Twitter, and Squidoo are just a sampling of emerging technologies and social media venues that are now relevant to online web businesses. Keeping current on technology trends and developments is key to running an online business.
Your web business profitability also hinges on your awareness of the trends in the online marketplace. As an example, take Tomas, who operates run a profitable web business as a tax preparer and consultant. To keep his web business profitable , Tomas needs to be aware of changes in tax law and understand its impact on his clients.
Profitable Web Business Strategy 2: Be Ready to Reinvent Yourself
Being in a profitable web business is like standing in the middle of a stream. Just as the water rushes continually past you, so business changes rapidly in ways that can directly affect the profitability of your web business. Reinventing yourself means adopting your business practices to reflect new developments in the marketplace.
Returning to Tomas’s example, when he started his web business 20 years ago he relied on overnight shipping to receive clients’ tax records and deliver their completed returns back to them. When tax preparation software emerged on the scene, Tomas needed to reinvent himself as a savvy user of that software in order to keep his web business profitable. The speed at which he was now able to complete returns also meant he could take on more clients, which led to another change: Namely, Tomas took on several employees to prepare his clients’ taxes. Tomas’s web business became more profitable than ever.
Profitable Web Business Strategy 3: Keep an Eye on the Competition
A third strategy criticial to starting a web business is knowing what your competitors are up to. This includes being aware of changes they make to their pricing structure, to the services they offer, or to the manner in which those services are delivered.
When Tomas’s competitors began to advertise online, he knew he had no choice but to do the same even if it meant cutting slightly into his web business’s profit margin.
Be aware that keeping up with the competition doesn’t necessarily mean copying everything they do. For example, when one of Tomas’s main competitors lowered its prices because they could do a bigger volume of returns than he could, his reaction was not to lower his own prices as well. Doing so would have adversely affected the profitability of his web business. Instead, he added a feature that enabled his clients to get early access to their tax refund from the government. Not only did Tomas keep up with his competitors. He also added new clients, and in so doing increased his web business’s profitability even further.