Recently, I’ve received my fair share of email asking, “how can I work from home and make a living at it?”  or “I want to start an online business but I  don’t know where to start. “  Here’s an email I received a few days ago:

“I SOOO want to find a way to work from my home and make decent money -just don’t know where to start.”

And another one: “I get all types of emails for online businesses but I’m a little hesitant. All claim to make thousands of dollars, retire in 3-months, etc … (I just want  to replace a six-figure salary or at least add to it). It seems like a lot of advertising, paying for this page or that page… Any advice?”

Well, my friends know that I’m never devoid of an opinion, so in fact, yes I do have some advice.

1. First, you must evaluate your personality type and make sure you have the chops to self-police, self-motivate and self-discipline.
   Don’t just think you do.  Ask yourself (and honestly answer) the tough questions before you even consider starting your own online business:
   • Are you motivated?  And I don’t just mean, can you get up and go mow the lawn after hours of nagging from someone else.  Or that you’re athletic and can hit the ball out of the park when it’s pitched down the middle of the plate.  I mean, if there’s no boss or paycheck on the line, will you get up at  7am, shower, sh*t and shave and get into the office by 8am every day, no matter what?  Will you stay until 6-7pm every nite?  And only take a 60 minute lunch?  (Or, will you head to the beach after a 90 minute lunch where you had a couple of beers and were feeling good so why not catch a wave or two?)
   • Can you live without a paycheck for weeks, possibly months on end?  If your billings or sales are short, will you pay yourself or your people?  Even in up economies, many small business owners are faced with this decision every week. Yours might not be any different.
   • Can you wait 4-6 months to get health insurance?
   • Can you work 60-70 hours in a week and possibly during the weekends?  If someone calls in, you don’t just say “oh well.”  You have to fill that gap and open the doors for business.
   • Will your spouse, significant other and/or  family support your long work hours, lack of vacation time and focus (some call it an obsession) on work?
   • Are you employed now with a steady income and/or a decent sized savings account (at least 6 months or more worth of living expenses)
   • Are you a risk taker who’s willing to bet big?
   • Are you the type that gets up after being knocked out, dragged down and left for dead, then tries it all again?The fact is, if you answered “no” to ANY of the questions above, you’re not ready to go solo.  I’d recommend that you moonlight while working full-time, just to try it out for a patch.  This will give you a great taste of what it’s like to own your own business.  And, you’ll have income to fund your new venture.The truth is, building and running an online business actually takes three times the discipline and self-motivation as a traditional “brick-and-mortar” business. Why?  Because most of us start out doing it from home.  It’s less overhead and it’s that freedom we all crave.  For the first month, you’ll revel  in your new freedom of sleeping in until 7:55am, rolling out of bed and turning on the laptop by 8am.  You’ll forget to shower every day until noon. You’ll sip your coffee or tea and love that you work for yourself in your robe and bunny slippers.  But trust me when I tell you that it’s very easy to justify that 30 minute walk at 10am.
     And then, that 11:15 trip to Starbucks.  And, the afternoon nap (It was only 30 minutes!) And the constant interruptions from family and friends who think you’re “unemployed” so you can be bothered at all times of the day.Sure you can take liberties — that’s beauty of being your own boss.  But like any other business, you have to bust your butt the first year or two, before you get to work an hour a day and make a 6-digit salary.
2. Do what you know, what you love and/or what you are passionate about.
   It’s that simple.  I always advise my friends and clients looking to start any business — online or offline — do what you know and do what you love.  If you’re only in business to make money, you will fail eventually. Why? Because the long hours demanded will eventually kill the flames that got you started.  Your network will also be stronger.If you love being outside and have been a carpenter for 20 years, maybe your online business is a networking site to find local talent to hire?  Think of it:  a place where any family can hire a carpenter, plumber, landscaper, etc — all with reviews of how good the person really is.  An Angie’s List for individuals. You get the point – use your creativity to mold your passion into a business.Ok, now that the self-analysis is out of the way, let’s get down to business (pun intended).
3. Decide on an online business model.
   I have found success with several business models online.  I’ve listed a few of them here, but be sure and subscribe to my blog for future posts on powerful online business models.  For the beginninger, I see four basic money-making business models online.
   • Retail (Or “e-tail” as we call it) – This is an online store that has a catalog of products (your storefront), sells them online and ships the products to customers.  It’s not unlike a brick-and-mortar store in your local mini-mall. E-tailers can set up shop with very little capital through dropship and reseller programs.  But the big costs (like the brick-and-mortar stores) is advertising.  There is no more “If you build it they will come” adage.  Online store owners need to budget for online advertising. Also, pay attentionn to the online the products you’re selling and the online demographics. For example:  if you’re selling “discount widgets for teenage moms,” you should know that lower income individuals have less access to the internet and therefore make up the smallest populations of people online.  It’s the sad truth. Like any business, know your market.
   • Online Subscriptions, e-products – My favorite business model online, online subscriptions & e-products can be the model that “Makes you money while you sleep.” But don’t be fooled by that adage — you still have to work at it EVERY DAY, at least 8 hours a day.  There’s marketing, customer service, administration and all sorts of other stuff that you have to do to run your business.  (See Point #1 re: Are you motivated?) Since your product is online, there’s no shipping and no product manufacturing or acquisition involved, which dramatically cuts your costs.But like e-tail, you have to know your market and you must budget for advertising.My favorite online subscription model is education and information. A few years ago, I worked for a company called LoanToolbox.  Both had similiar subscription-based models:  In exchange for a monthly, quarterly or annual subscription, these companies provided their customers with knowledge, information and tools they could use to run their businesses, get further career training or become better people.  I felt good because I was selling a “product” that actually helped people.  Oh, and it’s an added bonus to have 100, 1,000 and 10,000 paying members a month.  Whether the monthly fee is $9.99, $49.99, $99.99 or more, you can see the model in terms of revenue potential.The important thing about online subscriptions is  that you can’t just build it and leave it. You HAVE to keep your customers happy and consistently provide value.  Also, your subscription-based service must be unique and must serve a specific need.  For example, who wants to pay for news they can already read on the Hollywood Reporter?  But, add a gossip section to your news site that’s “exclusive / private access to hollywood’s stars” and perhaps someone might pay $4.99 a month to be the first to see pictures of someone’s trip to the beach.eBooks are another type of e-product that are now en vogue for online marketers and entrepreneurs.  “For $9.99, you can become a Twitter expert too!”  Again, tons of junk exists. But if your product stands above the crowd, offers a new piece of information a new twist on an old process, a secret sauce for doing something, you could have a winner.  But like the on-going subscription services, content IS king.  Value is the game.  Quality is the name.  Otherwise, you’ll make a few bucks a month from you eBook of digital download product.Use your imagination.  This is the information highway and the information age.  I believe that online subscriptions — and the model of web surfers payingfor unique content — is the wave of the future.  Not everything can be free forever (sad, but true).e-products work the same way as subscriptions, but they’re a 1-time purchase.  The very first online startup I worked for (back in the day!) was DigitalThink.  I loved the concept of building products that helped people learn — online! So, in 2003, I bought an online traffic school.  That’s a great example of an E-product. The traffic school was also a great business because 90% of our marketing happened from the court lists which were handed out to traffic offenders.  If we were on that list, we got customers on a regular basis.  EASY.
   • Affiliate marketing – “Affiliate marketing” is a fancy name for partner marketing.  Meaning, you are granted rights for selling other people’s products on their behalf, for a small fee based on your performance.  Sometimes that fee is a “bounty” — a flat fee for getting the merchant a new customer.  Othertimes, it’s a percentage of the revenue that the new customer spent on the merchant’s website.  And lastly, some affiliate programs will even pay you for the clicks you’ve sent to their websites. Although this is not very common and typically doesn’t pay very good.The concept is simple because it’s based on a win-win-win situation:The merchant / advertiser “wins” because she gets to pay for advertising by the customer or by the click (we call this “performance-based”)
     The affiliate or publisher (that’s you!) “wins” because you get paid for sending the merchant / advertiser new customers.
     The customer “wins” because presumably, as the affiliate, you are only marketing products and offers that appeal to your audience.I should mention:  If you’ve never done any online  marketing, affiliate marketing may not be the right place for you to begin your online money-making journey (in my opinion) as it does take skill and practice. There is also some shady characters in the land of affiliate marketing, so if you’re the blind trusting type, be careful — it’s a jungle out there! You will also need a website with traffic, such as a blog, and preferably a database of subscribers that you can send email offers to.

     BEWARE! Affiliate marketing is the most common lurking ground for those “get rich quick” scams and the dreaded multi-level marketing programs (which arenot all entirely bad, I should mention).  Certainly, you’ve seen these programs, which usually start with: “Do this and you’ll make thousands of dollars a month from home every month!”  Yeah, right.  Like my earlier post on Twitter Scammers and Spammers, the only people who (usually) benefit from these scams are those who create them.  Steer clear of get rich quick statements (see #5 below).  To get you started, I recommend joining a few credible affiliate networks as a publisher (or affiliate).

     A few good ones I use:

     • ClickBank — great for eBooks
     • Hydra Networks — beauty products
     • Share-a-SaleThere are dozens, even hundreds more.
     • Google the term, “Affiliate networks” and have fun!
   • Online Publishing for Advertising Revenue - If you write a blog, you’re an online publisher.  BuzzHumor and social communities like Facebook are technically, online publishers.  In fact, many of the subscription-based services mentioned above, are also online publishers.  I list this separately, however, because if you publish information online for free already, it’s tough to create a paying-subscriber-only section of your website. Not impossible.  Just more difficult.  So here, you’re simply publishing online to attract visitors — and a LOT OF THEM.  Thousands every day, preferably.  It’s from these visitors, that you’ll be able to put some advertising on your website and make a small income.By “small,” here’s some numbers to consider:  for every 100,000 visitors (unique) to your website, you’ll make $100-500 in advertising revenue per month.  No, this is not a scientific formula.  This is more Susanomics, but I’ve found it to be true.  Getting that many visitors to your website takes a combination of efforts — from paid advertising, search engine optimization, fresh content posted daily — but it can be done by one person. The support you’ll have to provide is far less than the other models I mentioned above.  And, if you’re a natural born writer and/or talker, this could be a great place for you to start.There are all kinds of ad networks that will allow you to post ads on  your website.  Google’s Adsense is probably one of the better known ones.  Google “Advertising Networks” and you’ll find dozens of others.
4. Spend money building a QUALITY brand
   What’s a brand?  My friends, you’re going to have to Google that one.  I don’t have the time or patience to explain it.  But it starts with your company’s identity, the logo.  Don’t scrimp on the logo!  Don’t have your borther’s son (who’s 10 and pretty handy in photoshop) draw something up on his puter.  Hire a firm.  There are thousands of talented designers all over the world that will build you a great logo for under $500.  It’s worth the investment.  To get started, try Elance or Guru.com.  I’m also a big fan of HP’s Logoworks.  You can get a complete Corporate identity — logo, business cards, letterhead and envelope — for under $500.
5. Hire the RIGHT web designers, developers and programmers
   Sure, I’m subjective, but I’ve been doing this for a LONG time now (almost 15 years).  You will spend thousands on a whole lot of nothing if you hire the wrong people.  Case and point:  A good friend of mine, who owns two local frame shops in Los Angeles set out to build herself a website 5 years ago.  She spent almost $5,000 over the course of 6 months getting it designed, produced and all of the photographs shot. For 5 years she complained that the web never brought her any business. My response:  You hired the wrong people.You don’t have to know a lot about the Internet, but you had better check email daily and surf the web regularly. Otherwise, it’s going to be tough for you to be successful with an online business of your own.

This should give you a good starting point.  Have fun, enjoy life and be persistent.