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When using DotNetNuke, as a web site builder, it is relatively easy to build a website and we sometimes rush to production without taking into account an understanding of what type of Internet business is profitable and what are the necessary steps to ensure our Internet business is a success.

Yes, you can still build a profitable web business from scratch. Here is how to do it.

This is the first of a six part series that will cover the step-by-step process on how to market and create a successful Internet business on a shoestring budget. Each week, for the next six weeks, I'll post a new installment in this series until the process is complete.

So, you're looking for a great business idea to start online? First, you should understand the different business models that exist and then decide which best meets your needs and resources.

Here are some of the more common ways to make money on the Internet:

• Sell a Product. Most money in e-commerce is made by selling products – either physical or digital. Many of the same common sense rules apply whether you are selling online or "offline." Look for products with high margins, high demand, low competition. This option may be a web store where you sell items you buy from other sources or a web store where you sell items that you create yourself.
• Sell a Service. Many businesses sell services on the Internet where you generate profits by performing a service for your clients. Some examples include App on Tap, hosted software applications, and Vendomatic type products (typically ebooks, audio, and video files. Basically the customer sees a product they like, and uses the vendomatic type site to order and receive the product).
• Sell Information. This can take one of two forms:
  • Subscription sites
  • How-to DVDs and E-books: These products are popular because they can be downloaded instantly. If you are an expert on a topic that others want to learn about, consider writing your own e-book. Once the writing is done, the cost to produce and deliver an e-book is minimal.
  For a subscription site you must provide valuable, timely information that is difficult to get elsewhere. You generate revenues from selling subscriptions to access the content on your web site.
• Sell Advertising. A free web site where you sell nothing but try to survive on income from banner ads. Advertising makes big money on the Internet, but it can be hard for the little guy. If you have a site with a lot of traffic, though, you may be able to make some money by joining an ad network or incorporating Google AdSense into your site.
• An affiliate system. An affiliate makes money by sending buyers to another merchant's web site. The merchant pays the affiliate either a flat fee per sale or a percentage of sales originating from the affiliate. To succeed you'll need expertise in search engine marketing or a web site that already attracts a lot of traffic. Affiliate models require little up-front investment and no inventory. However, you'll need to generate a lot of traffic to make money in affiliate marketing because revenues per sale are generally low.
• An affiliate master. Where your affiliates generate sales for you, and you pay them commissions.
• An eBay based web business. Where you generate profits from selling items on eBay

Starting with a formula for success

When it comes to choosing business models, I prefer to first evaluate the strengths and weaknesses of the person that will be running the business. Knowing and understanding your strengths and weaknesses is extremely important before a business model can be chosen.

For the sake of this learning series, we will assume the following:

• You don't have a web site
• You don't have your own products to sell
• You don't have a merchant account
• You can't afford subscription web site software
• You don't have an 'app on tap' to offer clients
• You don't have products to sell on eBay
• You don't have any products to offer affiliates
• You don't have much of a budget (less than $100 a month)
• You do have a little free time

Basically, we're assuming that we will start a business with next to nothing. No money. No products. No merchant account. Just the desire to have a profitable web based business.

Starting out with nothing is not as bad as it might seem. At least it means you are not starting out having to carry the negative baggage created by already having the wrong business model, wrong type of web site, and wrong products to sell.

When starting out with nothing, at least you have the benefit of being able to make some smart choices. By building on the formulas for success that have worked well for me, 

Decisions

Based on the starting assumptions above, we can rule out most of the Internet business models.

Since our mythical business will not have a merchant account to start with, we can pretty much eliminate selling products over the net - at least at the start. Same is true with subscription web sites. No merchant account, no business. In fact, almost every business model on the list requires a merchant account.

Eventually, we will need to get a merchant account for the business (we'll start the ball rolling on that next week).

But even without a merchant account, there is a proven business model we can follow. A business model with hundreds of easy-to-find 'models of success' – businesses that started out with nothing, yet by pursuing this business model we're able to become profitable in a matter of months.

For this business model (which I won't reveal until the next lesson in this series) to work, we must find our 'focus area'. We must understand who our target audience is and find a niche area of interest on the Internet where there is unfulfilled demand. And the niche must be something that you, as the business owner, enjoys being involved with.

Next week, I'll provide several niche suggestions, and further lay out the details of this business model.

By the way, even if you have an existing web business, I think you'll find the business model presented in these upcoming lessons could be a quite profitable addition to your own business.

Watch for the next installment of this series at the end of each week.