Do you have the right mindset for an online business?

brainSetting up an online business and making it work, is not much different from setting up a offline business. Now I have good and bad news. The good news is : If you are prepared to give what it takes, I’m sure that you can find an opportunity and make money online.

The bad news is : It takes a lot of time and a lot of effort.  Just to make this very clear, let’s do some math. I’m an engineer so I like numbers, stats and calculations.

Some people starting out in this business are choosing this option because they have a 9-5 job that sucks. And because they are convinced that they can earn more money with an online business.  So let’s do some math.

Let’s suppose you have a lousy job that pays you 2000$ net/month. That’s 24000$ a year. And let’s say you’re working 46 weeks a year, 5 days a week, 8 hours a day. That’s a total of 46x8x5= 1840 hours. So you’re paid 24000/1840 = 13,04 $ an hour. And you have some additional benefits.

You’re almost sure, that every day you turn up, you will get paid.   While you take holidays, you still will get paid. You have , in most developed countries, some kind of social security. And maybe some other perks.

Now, let’s look at that picture for an online business.

When you start off with a blank sheet, it will take you probably between 4-6 months (that’s my personal minimum guestimate) to learn and prepare your project. What are you going to do?  What are you going to sell? To who? How? Etc.etc.

Now let’s suppose you have something started after 6 months and your 1st month you make 400€. That’s net profit. So, income minus all expenses for advertising, hosting, VA’s (virtual assistant) etc.etc.  And let’s assume you are pretty good in what you’re doing, and you’re growing your income with 20% a month. This means that in year 1 you will make :

Month Income hours worked net/hour

1

0

250

2

0

250

3

0

250

4

0

250

5

0

250

6

0

250

7

400

250

8

480

250

9

576

250

10

691

250

11

829

250

12

995

250

Total year 1

3972

3000

1,32

Yep, that’s right 1,32 $ per hour . I assume that you will work at least 10 hours a day , 25 days a month. That’s 250 hours a month. So after one year you have made enough money to pay a couple of months rent. Also note that you make also around 65%  more hours as in your  lousy job.  But… you’ve got something started. Now you have to stick to it .. Let’s continue with year 2 :

Month Income hours worked net/hour

13

1194

250

14

1433

250

15

1720

250

16

2064

250

17

2477

250

18

2972

250

19

3566

250

20

4280

250

21

5136

250

22

6163

250

23

7395

250

24

8874

250

Total year 2

47275

3000

15,76

Hey, now we’re talking. You make 47k/year, and you’re just above the point what you were paid for your sucking job.  Of course, if you work less or take more time off, this break-even point will be a bit further away in the future.

Of course, all these calculations depend on a lot of variables. What you are selling, for what price, in what volume etc. And you can always dream about a 50% monthly increase rate. Nothing wrong with dreaming. But dreams stop, the moment you wake up.

Still reading? Now comes the good news :) If you have gone through this pretty tough ride, from your 3rd year onwards things start to change. You have a viable business and it brings you in enough money to pay the bills.

Another big advantage with this, compared to an offline business, is, that you can now spend more on outsourcing and take a bit more time off. I don’t say lay back. But just doing it a bit calmer, because now you have reached a point , where a good part of your business is running almost on autopilot.

Now, what’s the conclusion of all this? Starting an online business is possible, by starting with nearly nothing. But it will take a long time before you will start to reap the profits. And you have to prepare yourself for that.

If you start off with a mindset that you will “make it” in 4-6 months after staring at your blank sheet the first day, reality WILL kick in after a couple of months, and all your efforts will be wasted.

According  to the information that I found, less than 5% of the people  who start with an online opportunity will succeed.  Be it affiliate marketing, ebay, amazon or whatever. That is, 5% of the people that actually START something. Because if I would take into account the people that think, read or study about it, but who don’t take ANY action, this percentage will  drop way under 1%.

I hope that you have enough determination, drive, energy and willpower to succeed, and become part of this small portion of people.

If you have comments, if you have “made it” in 2 months, feel free to leave your story. I would be happy to write about it.

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