8 Steps To Setting Up A Home Based Online Business

1: Identify A Market

You need a marketplace to sell to; not having a ready demand for your product or service is like trying to set up a your business in a wasteland. You might get a few passing customers, but they won't come by very often!

Choose a market for which there is good and lasting demand - ideally where you are not in too much competition, although the "little guy" can often still show the "big guns" a trick or two!

2: Products To Promote

These could be your own, or someone else's  (i.e. affiliate products - which you will sell on a commission basis). This is your merchandise, and where your income will come from. You should aim to offer something unique to attract your buyers, rather than attempting to sell a product or service that has already saturated the marketplace.

3: Get Your Own Website Address

Ideally, I'd suggest getting a ".com" address with your chosen web hosting service, because it appears much more professional. Select a domain name that's your own name, if you can. This will give you a solid base to build on, no matter which direction you want to go in, and will let you build your personal brand. Alternatively, get a domain name that reflects your business area.

There are many hundreds of web hosting services to choose from (avoid free ones as they are almost certainly going to place competing ads on your site!). Web hosting service nowadays cost from as little as $3.95 a month. Choose a well known and respected hosting service as reliability and support are very important factors for your business.

4: Create Your Webpages

Why? Well, it just makes everything so much more straightforward if you have a website and pages that you have full control over, and can change to suit your own needs, add further products to etc..

Web page editors are widely available, and even free WYSIWYG editors these days are powerful and easy to use.

5: Get An Autoresponder Account

Why? Because an autoresponder makes it so much easier for you to build a subscriber mailing list and keep in contact with your customers and prospects on it.

This is almost certainly going to be where your long-term income will come from, as it is much easier to retain and sell to your existing customers than it is to find new ones. You can create follow up emails for your subscribers which will be sent out automatically by your autoresponder service at preset intervals, which will free up your time for the other aspects of building your business

6: Create A Blog

Blogging is a great way to keep your content fresh, which will help your search engine rankings, and this in turn will get you more free web traffic from them.

Free blogging software is available from sites like blogger.com and wordpress.com; Wordpress blogs can either be hosted for you by Wordpress, or can be installed on your own website.

If your blog is hosted seperately there is the added advantage that linking to your main site from your blog pages can help your search engine ranking for your main site as well.

7: Get An Online Payment Processor

Obviously, for an online business you need to be able to accept payments online as well; Paypal, Alertpay, and Clickbank are possibly the best known.

Clickbank has the added advantage that they also give you a built-in affiliate program, and they can handle paying your affiliates for you if you are also making your products available through affiliates for a commission.

8: Generate Traffic

Without the benefit of a traditional high street store, you will need to tell people that your business exists, and how to find it on the internet. Ideally you should be announcing your business to people that are likely to be interested in your products (known as targetting) rather than to all and sundry.

There are numerous ways generating web traffic to your website, ranging from free resources like Traffic Exchanges, to "Pay Per Click" marketing with Google Adwords, Yahoo, MSN etc..

When you're just starting out, free traffic generation resources may be the best option and can provide significant volumes of web traffic - in fact, well over 90% of my own sites traffic is from free resources like Traffic Exchanges and Article Marketing.

An in depth look at traffic generation is outside the scope of this article, but you can find more info and resources on this subject on my website.

Those are the 8 steps to follow for setting up a successful home based online business; there are other tools and resources that you might benefit from later as your business develops.

Don't expect overnight success, which is rare in online marketing; persevere, keep learning, and you will find success.