Since money is tight, is it really a good time to start an online business? Absolutely! To begin with, Internet startups have a low overhead. You can have a shopping cart site for under $100 a month! What's more, the business can be set up in a home office and attended to at night and on weekends, allowing entrepreneurs to keep their day jobs. In addition, many online businesses can be set up in less than a week. Another reason an Internet startup could be lucrative even in a down economy is that online shopping is growing. In the first quarter of 2008, revenues generated by online-based businesses were up 13.4 percent from the third quarter of 2007. If you look at total retail sales with annual growth in the low single digits, the online channel has been growing in the low to mid-twenty percentile. Although the economic downturn is slowing eCommerce sales, online sales are still growing at triple the rate of brick and mortar store sales.More and more shoppers are turning to the Internet instead of paying for gas to go to a brick and mortar store. Whether or not the economy is bad, there are some best practices to keep in mind when starting an online business. 1) Have a niche or focus on a specialty category - since you are competing with 'box retailers' when you enter the online retail market, be sure you have something niche-oriented such as Dog Gift Baskets or Infrasound Therapy Device for Horses. Or focus on a single category such as a Planting Guide calendar, but that's all you do.2) Offer an innovative marketing technology - like a great referral service offering a discount if your customer refers somebody else to the company. 3) Keep pricing in mind - even if you are selling a niche product, always keep pricing your priority. A unique product, an innovative marketing strategy, and promotion to help customers deflect prices are important business practices during a recession because people have less discretionary money to spend. You need to focus on strategies that keep customers coming back.
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