“The most striking figure in the whole report is that private sector payrolls shrank by 101,000 last month compared to a modest 26,000 drop in January,” said Paul Ashworth at Capital Economics, “a decline of that magnitude screams recession”. (Quote taken from BBC News).
More bad news this weekend on the US economy and, meanwhile, George W Bush insisted again that the US is not in recession. The man is disconnected from reality.
Sorry to write on the same subject as last week, but in situations like this there are a good many people who are facing very uncertain times, which puts enormous stress on them individually as well as on the family unit.
So I hoped it may be helpful to build on last week’s article by setting out some more details on one of the many ways that you can make yourself independent of your employer.
Remember: that does not mean leave your employer! It means putting yourself into a position where you’re not left without options should the axe fall on your job.
And what I’ve written in this article is not the only way you can do that. Just one of many.
Last week I suggested that if you wanted to make yourself independent of your employer you need to develop or revive a personal skill that you can sell to others. And that if you don’t have any, you should take the time now to develop one before the going gets really tough.
So this is article focused on people who may be interested in setting up an online business, working from home.
An online business enables you to start off slowly, working from home in the evenings and weekends without giving up your day job. This gives you time to learn the ropes with the financial security of your current job, before moving into it full time – if that’s what you decide to do.
So what are some of the online businesses you could set up..?
Well the first point is to identify what you could sell.
Selling your own product (or your skills)
If you have, or can develop, a product of your own you’re in good shape. Probably the most profitable type of product of all is your own digital product, because of the low overheads and administrative costs.
Your product will basically fall into one of two categories:
- A digital product that your customers can download
- A physical product that you need to deliver.
A digital product is generally easier to manage simply because you don’t have to worry about all the logistics around purchasing, manufacturing, stock control and product delivery – unless it’s too big to download.
Digital products generally fall into 3 categories:
- Books (ebooks)
- Training programs
- Software programs
Depending on its size (in Megabytes!) all 3 product types can be downloadable. But, of course, if you’re using a lot of diagrams and graphics in any of them the final file size may require that you deliver them via CD – which gets you back to the logistics issue.
You may already have a product in one of those categories that you can package up and sell, or you may have an idea for one you can develop.
Remember – last week I said that we all have some skill, experience or knowledge that would be useful to others. You just need to find what it is.
Once you’ve found it you can write about it and turn it into a digital product – a training course, an ebook or a software program.
Selling your skills
However, if you really can’t think of any skill that you can turn into a digital product, and really can’t develop one, there are still some options.
If you’re good at writing there are a number of places online where you can either get ideas or simply hire yourself out as a writer to people with specific jobs they want done.
A good place to start for writers is eLance. At eLance you can bid for freelance copywriting jobs. It’s a competitive bid process at eLance, so you’ll need to price your bid correctly as well as convince the person you’re bidding to that you can do the job.
And if you’re a programmer a good place to start is RentaCoder. (You can get programming jobs at eLance as well, by the way).
The ability to bid for freelance jobs at sites like eLance and Rentacoder offers people without their own products, or any means of getting one, another way to start earning money online.
And once you start earning online it’s amazing how many doors seem to magically open.
If you have, or can make, a physical product to sell you will need to get the supply chain all set up.
Physical products can be anything: dietary supplements, pet supplies, home and garden accessories, clothing, jewellery, hard copy books… Basically, anything at all.
You’ll need to set up the logistics around materials purchasing, manufacturing, stock control, customer delivery and customer service, particularly if faults or problems would require a customer site visit to fix.
For this reason setting up a business selling a physical product is way more involved than one selling a digital product.
Therefore, if you’re starting from scratch I would advise that you start off with a digital product. You’ll be able to learn the business of marketing online without the need to deal with all those logistics and the extra expense they involve.
Selling someone else’s product.
If you don’t have, or can’t develop, your own product then the next thing to do is look for someone else’s product to sell.
The advantage of selling someone else’s product is that you don’t have to worry about product delivery or customer service – the product owner does all that.
The disadvantage is that you’re working off commission but you still have to take on the costs of marketing and promotion, so your margins can be a lot narrower than marketing your own product.
Marketing someone else’s product is known as affiliate marketing and there are any number of products or businesses you can promote as an affiliate.
If you don’t have a specific product in mind, then you can turn to the affiliate service providers to find one.
Affiliate service providers are companies that act as exchanges between people who have products they want to sell and affiliates who want to sell them. Signing up with an affiliate service provider provides you, as the affiliate, with a level of protection, security of payment and good reporting.
Clickbank is the only one that deals exclusively with digital products – all the others deal with both digital and physical products. For this reason, and the fact that digital products are easier to start off with, many people get into affiliate marketing through Clickbank.
Signing up with Clickbank is easy and pretty quick, but looking for good products to sell requires some care and attention. Although the commission rates are high on Clickbank (from 25% to 75%) the prices are often low, so your actual earning per product may not be that much.
Since you will have to bear the cost of advertising and promotion you need to take care to find a product that will bring you a reasonable return. It either needs to be in high demand or have little competition. Products like that are there, but you need to dig around a bit to find them.
So, if you don’t have or can’t make your own product then, with a bit of research, you should be able to find a product (digital or physical) from one of the affiliate service providers that you can market for a commission.
Marketing and Promotion
To sell a product or service online requires marketing and promotion and, whether you’re selling your own product or acting as an affiliate, you will need to bear the cost of this.
If you’re new to working online you must take the time to learn the skills of Marketing. Marketing online is no different from marketing off line, you’re just using a different medium. The disciplines, though, are the same.
But it’s important to learn those disciplines because it’s very easy to spend a lot of money with no return if your marketing activities are not tightly focused.
To put it another way: it’s very easy to get a lot of visitors to your website, but unless they’re looking for what you’re selling they’re just a waste of your bandwidth.
Targetted visitors are what you need and that requires hard work and careful targeting.
So take the time now, while you’re still employed, to learn as much as you can about the skill of marketing. Learn how to do market research, how to identify market niches, how to identify cost effective promotion channels and how to write good marketing and sales copy.
This is exactly what I referred to last week when I suggested that if you were good technically you may want to take a Marketing or sales course so you could improve your skills at promoting the services you can offer.
And don’t discount marketing and promoting your products in the off line world. Off line media can also provide a very cost-effective channel for promoting an online business.
So, to all those who feel insecure in the current environment: take steps now to make yourself independent of your employer, because it doesn’t look like things are going to get much better in the short term.
And remember: what I’ve written here is only one of many ways you can make yourself independent. If you’d like to tell us about other ways to do this please leave a comment..!