Starting an online business involves a low start-up cost and investors can reap profits if they click on all the right places.
IN Indonesia, a man saved for months to buy a motorcycle for his son. Upon learning about Internet entrepreneur Fabian Lim, he used the money to pay the fees to attend one of Lim's courses in Jakarta instead. The course was to learn how to make a living marketing products and services over the Internet.
“I was extremely touched at how much he valued the gift of knowledge... it reflected his mindset,” says Singaporean Lim who claims to have taught more than 4,000 people in the region.
The man's efforts in educating himself reflects the keen interest from the public in wanting to set up a business in cyber space.
Internet business, says Lim, is a knowledge-based economy which requires the know-how to use cyber tools in order to get ahead.
Without the technical know-how, an Internet entrepreneur risks getting lost in the “jungles of cyberspace without a map or GPS,” says Lim, 40, who is the CEO of Asia Internet Academy Pte Ltd, one of Asia's largest Internet training academy.
“You don't always need to have your own products to sell to start an on-line business,” he says.
“What you need is to identify a market which has a commercial interest, create a website or an on-line presence and generate traffic to your website, and connect them to traditional businesses like, say, a florist or a caterer.
“Your role is that of a middle man and you earn money through a commission.”
Lim was a management consultant at Deloitte Consulting before he quit his job to set up his own business selling market research software on-line in 2005.
His business later expanded to include an instructional program that taught users how to use Google's paid advertising system effectively.
Internet enterprises are particularly attractive to the younger generation who seek a more creative way of earning a living rather than clocking in and out of an office every day.
They tend to be IT savvy and are willing to give up the security of a full-time job for a shot at setting up a successful on-line business.
While there are many success stories, young Internet entrepreneurs are also quick to point out that the rate of failure is high.
In order to succeed, a would-be cyber entrepreneur needs to research the market and be prepared to struggle for a certain period of time in order to get their business going, according to cyber entrepreneurs.
“Unfortunately, the rate of success is quite low, probably lower than 20%, with a rumoured failure rate of over 95%,” says William Lee, founder of Orangutan Marketing, a web design company.
“The main reason for this is that online businesses can take quite some time to reach a level where they can generate a healthy revenue stream and most people don't have the staying power to go the distance,” says Lee.
“I would advise entrepreneurs who want to start an online business to do their research and come up with a business model that they know they will be able to stick to for more than two years without giving up. This is the hardest part about Internet businesses,” he adds.
Kevin Chan, who also owns a web design business, advises new entrants to start small without investing much in an inventory-based business.
“Sell skills online, such as web design, graphic design, writing, etc. You do not need to purchase inventory to do this; just contribute your time,” says Chan.
Lee, 27, graduated as an electrical engineer from Monash University and quickly found a job with a large multi-national tobacco company which paid him handsomely.
As he did not smoke and found himself constrained by a 9-to-5 lifestyle, he quit the job to set up a web design business and a food blog called Feedmelah.com.
Feedmelah.com is a food portal that showcases Lee's custom-built restaurant directory listings as well as food reviews of restaurants around the Klang Valley and other parts of Malaysia.
“The website does make some money from advertising, but much more so in referrals to our core business service, which is web design,” he says.
Lee provides web design and online marketing services for small, medium and large corporations in creating, maintaining and growing their online presence.
“This covers everything from designing the look and feel of their website, branding, photography, videography, animation, copywriting, web programming to search engine optimisation, Google and Facebook advertising and even social media marketing,” says Lee.
“A large number of our clients hire us on a retainer to replace the need for having an in-house staff in charge of maintaining their website and online advertising campaigns, saving them money,” he adds.
He counts designer Zang Toi and model Carmen Soo as his clients.
“I self-taught myself how to create websites over a period of six months and started looking around for small jobs to build up my portfolio of work, some through referrals from friends and colleagues,” Lee reveals.
As his business expanded, he formed a team to cope with the additional work. He hired two programmers in India and a graphic designer in the Philippines.
One of the biggest advantages of the Internet business is that it does not require a large start-up capital.
“In terms of low start-up costs, you cannot beat the Internet,” affirms Lim.
A potential entrepreneur only needs to pay for a website's domain name, which could come to about US$200 (RM600) a year, according to Lim.
“For Feedmelah.com, due to the level of customisation required, it did take some capital to get it designed and programmed, in the range of about RM10,000. This includes the cost of hiring the graphic designers and programmers for the project.”
“For the web design business, it did not require much capital as I did most of the initial jobs myself. I only required a decent laptop, some programming and graphic design software and a stable Internet connection,” adds Lee.
“Because the overheads in a web design company are usually quite low, profit margins tend to be quite high. Combined with regular projects coming in, this has allowed my business to remain profitable.”
Lee advises potential e-businessmen to pay for training in their area of interest, such as blogging, e-commerce, affiliate marketing, online advertising and others.
“There are many membership courses available online. I personally have paid and joined to learn from some of the best in the industry, who already have done and recorded down the steps for what you are trying to emulate,” he says.
“Lastly, I would like to share this quote that I read to myself every day: Entrepreneurship is about living a few years of your life like most won't, so that you can live the rest of your life like most can't.'
“Remember that business is a marathon, not a sprint. Don't give up, keep persevering and you'll eventually get to your goal.”
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