Becoming a Successful Entrepreneur

Friday, March 31, 2006

Borrowing to Invest

Here is a great Tax Hint for people that own a house:

Option 1 (Asset Swap): If you currently have a mortgage and have money in an RRSP, then you're in luck. An asset swap works by liquidating your investments and using this money to pay off your home. Then you want to get a 2nd mortgage and invest this money back into your RRSPs. You are back to square one, however, now you have borrowed money to invest and the interest on the loan will be tax-deductible.

Option 2: Scenario taken from
In Canada, banks will typically lend you 75 per cent of the value of your home. If you own a home worth $100,000, the bank may lend you $75,000 to invest in something else. If you have a mortgage outstanding, it’s 75 per cent less whatever you owe. For example, if you still owe $75,000 on the mortgage, then you’re at break even. However, if you only owe $74,000, there’s $1,000 sitting in your home you could borrow to invest.

Sunday, December 04, 2005

The Next Step

It’s been too long since I’ve last posted an entry, so here we go.

This week I have finally finished my Encrypted Messaging Client implemented in Java (client/server) using RMI & SWT. I’m actually impressed the way it turned out. Very similar to your typical MSN but all messages are encrypted.

For the past couple of days, I’ve been applying to jobs like mad. I’ve finally reached that stage in my life where I make the big jump. I’ve almost finished my Undergrad degree… only 4 exams left!

I’ve had the company, Spheric Technologies Inc., call me to learn more about myself. I was extremely excited to hear the type of work that they do and the opportunities they provide. They travel all the time to other companies providing solutions to fit their needs. They are never in the same environment for extended periods of time and I believe this change is a great motivation.

When choosing my next job, I want to make sure it’ll allow me to become a better person. I want to increase my skill set and explore existing and new technologies. If I’m able to accomplish this at a young age, I believe there will be nothing to hold me back from having a successful and most importantly, an enjoyable career.

Friday, October 14, 2005

The Million Dollar Homepage

If you haven't gone to this site yet, do so (The Million Dollar Homepage). This guy is brilliant. To begin, he just graduated from high school and needed some serious cash for University. His story is as follows,

So I had this little idea the other day. I was trying to think of interesting ways to make some cash before going to Uni (which is in about a month's time) and somehow this crazy thought entered my head: I'll try and make a million dollars, by selling 1,000,000 pixels, for $1 each.

And so 'The Million Dollar Homepage' is born...

I thought, this could be something crazy enough to work! Because I think people like crazy/quirky ideas. If this captures people's imaginations and people check out the site, then the pixels on the homepage will have value - and people will buy them (to display their ads etc). That's the theory anyway. The way I see it though: I've got nothing to lose by trying. And I'm sure it'll be fun.

His homepage consists of a 1000 x 1000 square grid to sell tiny ads. Each square is 100 pixels for a total of 1 Million pixels (hence the name of his site). He sells each pixel for $1 but of course a pixel is so small that someone cannot buy just one pixel. The minimum is 100 pixels (equivalent to 1 square on the grid).

In less than one week, he had sold thousands of pixels. So I emailed Alex (the founder of the site) and asked him HOW? How did this site get so popular in such a short amount of time? He simply responded with, "by word of mouth". And it makes sense! This site is so unique and people get curious that the word spreads. Look at me right now. I'm so blown away with the entire concept that I'm writing about it now. This guy made a simple site that probably took a few days and $0 to build, and has generated almost $400,000. Newspapers heard about the site in no time, which helped the site to gain a much larger audience (links to new articles related to his site are posted on his page.

My next question is WHY? Why are people going to keep coming back to his site? There is nothing there but a large amount of ads. The answer is simple, curiosity. Like me, many people keep going back to the site to see how he's progressing. He has two counters on his homepage. One that keeps track how many pixels he's sold, and the other that indicates how many pixels are remaining. Another reason why I continue to visit his site is to read his blog. I like to read what exactly he does from time to time...

In order to be successful yourself, you must watch and learn from others that are successful.

Sunday, September 18, 2005

Why Save ALL Your Money?

I was inspired to write this blog after reading, "Splurgable Income" posted by another blogger, SensibleSaver.

The question is "Why save all your money?". Many people have the idea to invest as much money as they can in order to make a fortune by the time they retire. This means cutting back on your spending while your young preventing yourself from having a greater time. Let me explain the scenario:

Cut back on your spending and invest the money. Yes, you will retire wealthy. But how long will you be able to enjoy this money? How long do you expect to be healthy? The question to ask yourself is, will enjoy having more money and spending it when you retire, or spending the invested money while you’re young to have a greater time. And you have to think about the time durations you'll be able to enjoy having the money.

No, I'm not saying to not invest. I agree to invest into your RRSP or CPP in order to bring an income when you retire. But I do not agree with investing beyond the RRSP and CPP in order to be a wealthy person when you retire IF this means living an unfulfilling lifestyle (in the present). I feel if I took this route I would be less happy while I'm young and full of energy and most important, I will be waiting impatiently for my retirement to arrive in order to collect the wealth.

There are people that have money just sitting in banks doing nothing but collecting interest. I agree to take this money and invest into something that will collect more than just interest paid by the bank.

I agree with the saying, “Pay yourself first!” Put money away regularly (deduct directly from your pay cheque is the best route) for retirement. If there is anything I would like you to remember from this post, it is to be a smart investor.

I would love to hear your thoughts on this topic, so please share your opinion.

Thursday, September 15, 2005

Current Events: eBay aquires Skype

eBay, the World's Largest Marketplace (that provides a global trading platform where practically anyone can trade practically anything), recently agreed to buy the leader of the voice-over-internet market, Skype, for up to $4.1 billion.

Skype, released by the owners of Kazaa, is a program that allows anyone from anywhere to call anyone else over the internet who also has Skype.

In The News: Canadians of all age groups are not saving enough

Read the following article posted by CBC Business News, "Canadians of all age groups are not saving enough".

Wednesday, September 14, 2005

Current Events: Delta and Northwest Airlines file for bankruptcy

There should be no surprise here that two major U.S. airlines have filed for bankruptcy protection. Why did this happen? Because of fuel costs! The entire airline industry has been hit hard by the soaring fuel costs.

The cost of fuel has affected all methods of transportation leading to the cost of many consumer products to increase. This will take a huge toll on how we will live our lives from this point on. Somehow we have to come up with more money. I can see the future of real estate being affected. People will not be able to afford the high costs of homes. More people will buy already built homes as the cost for building homes will increase. This will be due to the high costs of retrieving lumber.

Anyone could write a million words on this topic as the consequences of rising fuel prices are immense. Delta and Northwest Airlines filing for bankruptcy is just the beginning of the long line of businesses that are following close behind.

Current Events: Google launching search engine for Blogs

Google, the internet's leader of search engines, have produced a search engine that will allow users to sort through millions of blogs.

Google was introduced to the world of blogging in 2003 after it's acquisition of Blogger. There are other search engines that exist for sorting through blogs, however, those other search engines don't come close to bringing the sort of traffic that Google does.

Monday, September 12, 2005

Summer Business Ideas

Need to make some cash over the summer? Then start a business with little to no money. Make a profit immediately and walk away in September if you please.

Quick summer business ideas include Lawn & Yard care, house or pet sitting, and going where it's hot and keeping people cool. For more information on these ideas plus others, read the article, "Create Your Own Summer Job: 6 Ways to Make Money This Summer". Learn what you'll need to start the business, estimated start up costs, how much you can make, how to grow the business, plus more.

The 10 Secrets of Selling Online

1. Work Works:

If there is a single secret to selling online, it is to work hard. Hard work is the secret to succeeding in almost anything, but it is especially important on the Web.

There are millions of consumers out there, but lots of other Web sites are competing for their attention. So you can't just build an online store and walk away from it. You have to work hard to draw visitors to your site, work hard to create a site that those visitors want to buy from, and work hard to give those buyers such good service that they and their friends will buy again in the future.

2. Choose the Right Niche

So you have to choose a niche small enough that you can dominate it. For example, if you are a tiny company, it would probably be a mistake to try selling top-40 CDs online. You would have a hard time competing with CDNOW. But you would probably have a chance at becoming the site for European folk music.

3. Make the Site Easy

The average visitor to a Web site looks at only three or four pages before going somewhere else. Visitors will leave at the slightest obstacle.

So if you want people to visit and order from your site, don't put any obstacles in their way. Whatever you do, don't force visitors to register. You have to create yourself an account, with a user id and password, before you can even order from Wal-Mart. Do they expect online shoppers to remember a userid and password for every online store they visit?

4. Emphasize Service

Your site should offer secure online ordering, and you should say so to visitors. But If you try ordering online yourself, you'll find the biggest concern that you have is not security. I bet what you'll find yourself thinking is, who are these guys? Did they actually get my order? Are they going to send me the products? When?

When someone places an order from a Yahoo! store, we always generate a confirmation page thanking them for their order, and telling them their order number. That is a good first start, but you as the merchant should also send them an email thanking them for their order and telling them when it will arrive.

And make sure that you ship orders quickly. Web users want fast results. They don't want to hear that they should expect to wait 4-6 weeks for delivery. This is not 1910. Tell them they will get their order in 3 days.

5. Promote your Site

One thing not to do, if you want traffic from search engines, is use software that generates your pages dynamically. Search engines don't index dynamically generated pages. As Internet World points out, a dynamically generated site is "all but invisible to search engines."

6. Patience

A few lucky merchants get a flood of orders the day they open. But for most online stores, growth is slow and steady. In the first couple weeks, you see a trickle of visitors, and, if you're lucky, one or two sales. If you work hard, six months later that trickle may have turned into a small but consistent stream.

Copyright © 1999 Paul Graham. Feel free to reproduce any of this text on your own Web site, so long as you reproduce it verbatim, and include this message. For any other use, please contact the author. Yahoo! and Yahoo! Store are trademarks of Yahoo! Inc. All other trademarks are the property of their respective owners.

Saturday, September 10, 2005

Making a Profit using Amazon

Jason Meyer and Daryl Butcher met at a boat party on Lake Washington last July. Days later, they purchased 10,000 used books from a charity, rented a warehouse in Kirkland and formed Thrift Books.

A year into the venture, the company has 300,000 used titles listed on and other online retail sites. Meyer, who oversees the company's finances, said he expects more than $1.2 million in sales the first year.

"It's all volume," Meyer, 32, said of their strategy, which is to sell a large quantity of books cheaply and to make a profit on shipping. "We sell a lot of books for a penny."


Dave Anderson started his company, ScannerPal, after his wife, Barbara, began selling used books on Amazon 2 1/2 years ago.

Anderson, who wrote software for wireless devices, had accompanied Barbara on a book-scouting trip when he saw his wife go through stacks of used books, holding up each one to determine whether it would sell or not.

When they returned home, half the books had no market value. He decided the key to running a successful business was to buy only books that sold at a higher price.

Anderson developed a software program that allowed his wife to use her cellphone, or any other wireless device, to enter a book's bar-code number. The program returned important information, including Amazon's price for the book, how many others were selling copies, the item's sales ranking and the lowest price for which that book was available.

- Information quoted from the article, "Small sellers get the edge" - The Seattle Times

Friday, September 09, 2005

Successful Startup Strategies

The hardest part for most people wanting to start a business is not coming up with an idea, but taking action!

When thinking about business ideas, I guarantee you found something good and then later found out it was already implemented… so you forgot about. Never do this again! Having a successful business is not just about having a unique idea. You can be successful by taking something that already exists and making it better.

There are three things you need to create a successful startup:
1) start with good people,
2) make something customers want,
3) spend as little money as possible.

Many startups fail at one of these causing them to fail.

Not only do you give something that customer's want, but it must inspire you. Why waste every week for the rest of your life waiting for the weekend to arrive (if that's when you have your days off). Find something that you love to do... choose something that motivates you to work even harder.

If you're going to spend years working on something, you'd think it might be wise to spend at least a couple days considering different ideas, instead of going with the first that comes into your head. You'd think. But people don't. In fact, this is a constant problem when you're painting still lifes. You plonk down a bunch of stuff on a table, and maybe spend five or ten minutes rearranging it to look interesting. But you're so impatient to get started painting that ten minutes of rearranging feels very long. So you start painting. Three days later, having spent twenty hours staring at it, you're kicking yourself for having set up such an awkward and boring composition, but by then it's too late.

So the biggest cause of bad ideas is the still life effect: you come up with a random idea, plunge into it, and then at each point (a day, a week, a month) feel you've put so much time into it that this must be the idea. I don't think we should discard plunging. Plunging into an idea is a good thing. The solution is at the other end: to realize that having invested time in something doesn't make it good.

- Information quoted from the essay, "How to Start a Startup"

Thursday, September 08, 2005

Maximizing your RRSP Contribution

My best advice with RRSPs (Registered Retirement Savings Plan) would be to start early. The sooner the better! With the magic of compounding interest, investing your money one year a head of schedule can make an insane difference (refer to my earlier blog, "Time, Return, & Amount"). The beauty of RRSPs is that they are tax deductible.

For example:
  • Person A has an annual income of $50,000 -> pay income tax on $50,000.
  • Person B has an annual income of $50,000 but contributes $9000 to his/her RRSP -> pay income tax on $41,000

Your tax refund can be used to generate more retirement savings. So max your contributions! And no, this means you can't put $1,000,000 every year into your RRSP. The government sets a maximum every year on the amount you are allowed to contribute. At the present time, the limit is 18% of your previous year's earned income up to a maximum of 16,500 for 2005 & $18,000 for 2006.

If you think it's too late to start maximizing your RRSP contribution, then think again. Whatever amount you do not use (from your allowable RRSP contribution) will be carried over to the next year.

Friday, September 02, 2005

Time, Return, & Amount

If inflation averages just 4% over the next 35 years, an income of $30,000 today will have to grow to $118,000 just to keep up. You can better prepare your future by focusing on the following principles when investing:

Time: If you invest $200 a month for the next 35 years and earn 8%, your RRSP will grow to $426,000. If you wait five years (oh, first I’d rather pay off my student loan, take a trip, buy a cat, etc.), you will end up with $283,000. Waiting a measly five years has cost you close to $143,000.

Rate of Return: Let’s say that you could average 9% on your $200 a month instead of 8%. Now you’d find yourself with $537,000 (difference of $111,000). What's this mean? Do some research and get the highest rate of return you can!

Money Invested: Let’s take that $200 a month and increase it each year (say 4%) as you get raises to keep up with inflation. At a 9% rate of return, you’d have $817,000.

Adjusting just one of these three factors by a small amount will affect your future drastically.

- Information quoted from "The Investment Book", by Kevin Cork.

Wednesday, August 31, 2005


Preserving your principal, growing your savings, and sleeping well at night are likely what you're after with your retirement savings. How can you find a balance between all three? Through diversification.

Diversification is about not putting all your eggs in one basket. By carefully choosing where you invest your money and offsetting weaker investments with stronger ones, your entire portfolio won't be as adversely affected, by market changes.

- Information quoted from Sun Life Financial Canada

Monday, August 29, 2005

Dollar Cost Averaging

Dollar Cost Averaging is an investment strategy that is as simple as it gets allowing investing to be as painless as possible. It requires investing the same amount of money on a regular basis (once a month, once a week, once a quarter). By investing the same amount of money on a regular basis in the same stock or units of a mutual fund, you actually reduce the risk of investing! How? By receiving more shares when the market is down, and fewer shares when the market is up. This lowers the overall cost of the investment. This is a handy investment strategy for those funds or stocks that fluctuates in value. If you're not convinced, read the scenario below:

Scenario: Let's say you can see four months into the future. Let's also assume that you have the choice of two different stock funds in which to invest $100 a month.
Fund A: Goes from $10 a unit in the first month to $12.50 in the second month (a 25% gain!) to $20 in the third month. By the fourth month, it will be worth $25, for a total return of 250%!
Fund B: This fund will have a rougher time. It will also start at $10 a unit. During the first month, it will drop to $5 (a 50% loss!). It will drop even further in the second month, to $2 a unit, before crawling back to $10 in the final month.

Given the results, which fund are you most likely to invest your $100 a month? Exactly! Fund A! I mean, really, who doesn't want an investment to go up 250%?

Surprise! You don't... at least not for many, many years. Why? Because you still have to invest! What good does it do to have your total $400 investment grow so much? All it means is that you now have to pay 250% more for the same investment you started four months ago. This means you are getting less investment for each dollar. In our example, here are the actual results of the four month investment scenario:

At the end of the four month period, the final value of your investment is determined by multiplying the current number of units by the current unit price. In this case, the investment in Fund A is worth $675 (25 units x $25/unit), which is pretty good. However, an investment in Fund B is worth $900! (90 units x $10/unit)!

The reason Fund B earned so much money is that you kept buying units during the low-cost second and third months. Your average share price was only $4.44! By contrast, Fund A had an average share price of $14.81, since your automatic purchase plan continued to buy shares, even when the price rose. And remember, at this point the papers would all be telling you how lousy Fund B is with its 0% return in the last four months compared to the amazing 250% return of Fund A.

- Information quoted from "The Investment Book", by Kevin Cork

Sunday, August 28, 2005

Owning Rental Property

Owning rental property can be very rewarding financially. It can also be a pit to toss money into for a long time. The upside of owning property is obvious. You do a monster leverage loan from the bank (called a mortgage) and then have someone else pay it off while your asset appreciates. Sweet. As long as:

  • You can come up with the 25% of the house value you need for the down payment;
  • You can find half-decent tenants relatively quickly, and they don’t end their marriages partway through their rental lease;
  • The house does not need major repairs, such as a new roof or a major renovation to repair the flood damage left over from the frozen, burst pipes;
  • You can maintain the property over the next few years and do not have to sell into a falling market;
  • You recognize that the net rental proceeds and eventual sale of the property are taxable events; and
  • You don’t mind heading over to the house at 4 a.m. on a Tuesday morning in January because the furnace stopped working OR paying some expensive 24-hour repairman to go for you.
Becoming a successful rental property owner requires you to think like a business person and be prepared to devote time and energy to keeping tenants happy. You need to think about the best locations, which may be different for a landlord looking for tenants than for a homeowner looking to raise a family. You don’t necessarily want property in an expensive area, because it’s likely that those who can afford to rent in the area can also afford to buy. The property should be relatively central, or at least close to public transportation. And you need to have the resources and time to handle repairs and upgrades to the property. You also need an emergency fund to cover the mortgage during those periods when you don’t have renters. A rental property is really more like a small business than an investment. Proceed with caution.

- Information quoted from "The Investment Book", by Kevin Cork

Monday, August 22, 2005

Real Estate Wisdom

  • What determines a market?
    supply & demand, mortgage rates, consumer confidence (economy).

  • Baby Boomers (demographics) will have impact on real estate.

  • Buyer success in hot market:
    • Pounce (houses can sell in days or even hours)
    • Be prepared (pre-approved for a mortgage, select a lawyer, cash on hand for biggest possible down payment)
    • Be clean (best offer has no conditions)
    • Set a limit on price willing to pay and stick with it (= available down payment + amount of pre-approved mortgage + closing & other fees)
    • Apply pressure

  • Buyer’s market:
    • Be tough (go after everything you want: appliances, furniture, low price, etc)
    • Be wise (investigate the reasons behind the listing: divorce, job relocation, etc)

  • When to buy and borrow:
    • Greatest competition & number of listings: Feb – May and Sept – Nov for Houses, March – July for cottages
    • Avoid mortgage commitment during RRSP season (New Year’s – March 1st) higher rates
    • Shop for real estate during slow times (holidays & long weekends)

  • Lawyer needs a month to do tasks

  • Mortgage lender needs a few weeks to approve property and advance funds

  • Include in the offer an opportunity to visit the property a few times.

  • Get a warranty (if anything breaks before the closing date, it will be them responsible to fix it)

  • Demand for Multi-bedroom houses will decrease as the average size of a family decreases

  • Rules of intelligent residential real estate buying:
    • Buy the worst home on the best street and then fix it up (location, location, location). The condition of the structure can be fixed, rebuilt, repaired, restored, & replaced… a location can not.
    • Don’t buy a corner lot (more traffic, less privacy).
    • Don’t buy a house near a major highway, bus stop, police station, fire station, hospital.
    • Discount on houses next to schools or retail stores.
    • Tree filled areas are worth more.
    • Buy what you can afford.
    • A house should not cost more than two-and-a-half times your gross earnings
    • Think resale (parking is an issue in urban areas; buyers like yards and gardens)
    • Pre-shop the Net

  • Use an agent for buying and selling (keep in mind future development for resale). Free to use agent when buying. Good idea to use the same agent when reselling the home because the agent knows about the property already.

  • Closing costs are typically 2% of purchase price for home.

  • Have a home inspector ready before shopping for homes.

  • If inspection is negative, have seller fix it or renegotiate the price.

  • Be there during inspection.

  • It’s a bad idea to increase the mortgage amount in order to cover the closing costs.

  • Option to rent out cottages or sell fraction of cottage for a fraction of the season.

  • Make sure the land between the cottage and water is yours, get a home inspection, check out the mechanicals, check out the quality of water in the lake, and view a survey.

  • Keep all receipts that you invested in improving the cottage (used to deduct capital gains tax: difference of sale price and price originally paid)

  • Another tax advantage comes if you rent out the cottage for part of the season.

  • Mortgage elimination strategies (save a lot in interest payments):
    • Make pre-payments (10% or 15% of the loan paid lump sum once a year)
    • Increase payments
    • Go weekly

  • Mortgage pre-approval will let you know how much you can spend on a house, lock a rate (if interest rate rise, yours does not, but if interest rate declines, the bank will pass the lower rate to you), eliminate the financing clause on the offer.

  • Good rule of thumb is to have no more than 30% of family income used towards mortgage payments plus realty taxes.

  • Interest on money borrowed to invest is tax-deductible
    • Asset Swap
    • Home equity loan

  • Future demand lies with urban bungalows, semis, and towns, condominiums, golf towns, cottage and recreational property, and apartments.

  • Painting gives the best return for money invested (there is smart and stupid renovation)

  • - Information quoted from "The Little Book of Real Estate Wisdom", by Garth Turner

    Saturday, August 20, 2005

    Rent vs Buying a Home

    For some people, buying their home makes the most sense, and for others, renting is best. To determine which is right for you, you first need to determine whether you can afford to buy. Then you need to consider other factors, including the time you'll stay in your new home, the home's prospects for appreciation and taxes.
    --- Quoted from ---

    In short, my philosophy is if the monthly cost of buying a home is the same as renting then buy. I personally don't believe it is a good time to invest in real estate. Housing is way over valued. I believe that we have reached a peak where the real estate bubble is about to pop. My suggestion is to take the money saved every month from renting over buying and invest it! Take for example a mortgage payment on a house of $1200 a month. Instead, rent an apartment for about $600 and invest the difference of $600 a month into a good fund. I believe your return on investment will far exceed your return on investment if you bought a home (at the present time).

    If you're still unsure what to do, do the math. Use the service provided by MSN House & Home to determine whether it is best to buy or rent.

    Friday, August 19, 2005

    Starting an eBay based Business

    Started by Pierre Omidyar in 1995, eBay has become an auction site used internationally for the purpose of selling unwanted items. eBay is successful due to it's simplicity. It takes little effort to sign up, sell or buy a product.

    I became obsessed with eBay after making my first sale to a man in Texas. I had sold him rechargeable batteries! I couldn't believe it... I was telling all my friends about how I had made $10US by selling batteries on eBay. I was hooked to the site from this point on. You are probably wondering why I sold batteries on eBay... well, I had just got my first digital camera for Xmas and my rechargeable batteries didn't work. After going through about three sets of batteries and none of them working, I found out that rechargeable batteries are not charged initially (stupid stupid stupid)! I was putting the batteries in my camera before charging them first. So with all these batteries lying around I decided why not try to get rid of them on eBay.

    Many people have gave up their full time jobs to start their own business on eBay. Heck, if I can sell batteries, you can sell anything! The site receives an enormous amount of traffic... so why not take advantage of it to make some cash.

    All you need is a computer, internet connection, and a product. The idea is to find a low cost product that you can sell for a profit. Some businesses just buy products in bulk from wholesalers and then sell them at a profit on eBay. How much easier can it be? If you are not successful at selling one product, then just switch to another. Seems like a win/win situation to me. Visit and read people's stories how they've become successful by using eBay.

    Wednesday, August 17, 2005

    Students - University vs. Starting a Business early

    Which path should students take when graduating from High School? Should they go directly to University, or start a business asap?

    Career Path #1: Most parents would say that education is a must. Go to University and get the skill set & knowledge necessary to become a successful entrepreneur. Then take the time to start your own business. You'll still be young upon receiving your degree AND you'll have the degree to back you up if your business fails.

    Career Path #2: Don't waste the four years of going to University and building a huge debt. Debt will put you at a disadvantage in getting support for a business idea. You have all kinds of energy while you're young, so don't waste it! You'll probably learn more about the business world from hands on experience rather than from a textbook. Build the confidence, follow your instincts, and become "The Man"!

    Friday, August 12, 2005

    Becoming a Successful Entrepreneur

    Becoming a successful entrepreneur in the online world is no different than becoming a successful entrepreneur in the brick-and-mortar world. Both tasks require vision, determination, and hard work.

    Jeff Bezos of is worth 4.85 billion dollars. Pierre Omidyar of eBay is worth just over seven billion dollars. David Filo and Jerry Yang of Yahoo are both billionaires. These men made fortunes on the web, and so can you.

    What Are You Going to Sell?

    The #1 thing you need to succeed in business is the customer. Whether you have one customer, fifty customers, or millions of customers, it is critical to remember that customers are the foundation of any business. Without customers, you don't have a business; you have a hobby.

    Product or Service

    Every business sells either products or services, a few businesses sell both. Products are easier to sell online because they can be more easily commoditized. People have become comfortable buying known commodities online. Services which are sold online are sometimes delivered online and sometimes delivered offline.

    Selling Services Online

    If you choose to sell services, the next decision to consider is how the services you sell will be provided. You can choose to:
    • Sell your own services
    • Sell the services of others
    • Sell an automated service

    Selling Your Own Services Online

    The key to success in selling your own services over the web is to focus on the needs of your customer. For every sentence you write about yourself online, write an entire page about what you can do for your customers.

    Selling the Services of Others

    Selling the services of others allows us to leverage a larger workforce, and ultimately to build revenue more quickly.

    Selling Automated Online Services

    If you have the right idea, and the determination to follow it through to a successful conclusion, there can be no better business opportunity than selling an automated online service.

    The first step, of course, is to determine what people want and what people are willing to pay for.

    Selling Products Online

    If you choose to sell products, you are not limited to selling products which you manufacture. If you are already in the manufacturing business, that is a significant advantage and the web is an excellent sales outlet for many products.

    Greater opportunities exist for the rest of us by working with the distribution channel. We may buy products from manufacturers and sell then over the web, or we may buy products from wholesale distributors and sell them over the web. We may never even see the products we sell.

    Setting up IT

    The most obvious need for your new online business will be a company web site. This will introduce you to the professionals known as web designers. If your business sells more than a few products online, you will also have to work with database administrators. If you want to sell an automated service online, you will find yourself working with software architects and software developers.

    Selling Online - Successfully

    Once your have negotiated with your suppliers and you have you distribution system arranged -- now comes the difficult part. Now you must bridge the gap between your business and your customers.

    Most Internet traffic is currently brokered by search engines, such as Google, Yahoo, and MSN. To do well in business on the Internet, you must do well in the search engines.

    This means appearing very early in the search results for the key words or phrases your potential customers will use to shop for your good or services.

    Very few potential customers will look for you by name. You must determine the phrases which potential customers will type into the search engines and make sure that you rank well in the result listings for those phrases. Product types or names are common search phrases, such as "sleeping bags" or "bumper stickers." Key phrases for services often include a geographic component, such as "real estate kansas city" or "house painter colorado springs."

    The eBay Alternative

    The tasks involved in setting up a web site and driving traffic towards it can be time consuming and resource intensive for a small business. The time delay imposed by website development and search engine marketing can require many months to begin to deliver ROI.

    Many web entrepreneurs use eBay and other online auction houses to short-cut this process and begin selling to online customers almost immediately.
    On eBay, you create auctions for the products you are selling and potential buyers bid to determine what they will pay. You are able to set minimum prices to ensure that you will not sell products at prices below your necessary profit margin. You are also able to set up dutch auctions where you are able to sell large quantities of the same item.

    For more information on starting an eBay business, visit


    The options involved in becoming a successful entrepreneur on the web are extensive. Picking the right path for you own journey is your first step on the road to online success.

    About The Author
    Will Spencer is the webmaster of Entrepreneur Support.