investment
Marketing Your Work At Home Business

Validating Your Financial Investment When Starting An Online Business

Unfortunately, a large proportion of Internet businesses fail and their owners lose their seed capital. This could be avoided if the proper research and due diligence is carried out prior to making an investment. Internet marketing is a legitimate business and as such should be treated and approached with general business principles. As the owner and investor in the business you should seek immediate validation of your investment prior to moving forward with your project.

Often this can be hard to do objectively as you are committed to the success of your ventures and to step back and assess your failures can often lead to short-term pain. To validate your investment there are traditionally three major areas you need to look at, and they are opportunity research, business case and brand positioning.

Opportunity research is the process of gathering research data and statistics that you can use to form a business case and business assumptions. Without this data, assumptions on business potential or profit potential are meaningless. As an Internet marketer you can easily access this opportunity research data using keyword research and surveys.

Once the opportunity research is complete you will begin to build a business case using the research data. The business case involves applying different business models and using financial modeling, which allows you to predict the income and expenses associated with your project.

The final step in validation is defining your business brand positioning in the marketplace to ensure you can compete. Without a unique brand position and value statement it is difficult for your business to reach its full potential.

This simple three-step validation procedure will ensure that any investment you make in your business is backed by sound due diligence. I like to think about going into business as buying a new house. You need to ensure the house is stable, has been built well and is a good investment. Internet businesses can be cost effective to start up, but this does not reduce the responsibility of validating your investment.