So you've come up with a list of possible topics for your web business, or maybe you already had an idea when we started. Now it's time to figure out whether you can turn your idea into a workable business.

Breaking down your idea

In order for your web business to be successful, it needs to have several qualities. I've broken these down into roughly two areas: Internal (attributes specific to your idea) and External (how external market and cultural forces affect your idea). We'll cover Internal in this article; look for External in a week or so.

Internal attributes include:
Viability, expandability, scalability, and income streams

External attributes include:
Competition, consumer interest, lifestyle/culture trends

Viability

Let's start with your internal attributes. The first is viability. Is it conceivable that if you live and breathe this topic for the next two+ years, you will still be interested in it? That sounds like an easy question, but believe me when I say it can be complicated. People change over time. You might be very interested in Indian cooking for the next, oh, six months, but what happens when you're tired of eating and reading about curries? Is this a "fad" in your interest scale, or is this something that you'll be able to enjoy long term? Viability is the primary place where my first web business, Pathway to Darkness, failed. While I had some passing interest in the topic, I soon grew tired of it and began to be uncomfortable with being associated as "the ultimate vampire resource" girl. So take some time and be sure, before you jump in headfirst.

Expandability

Expandability is the next facet of your web business. If you're planning a content site (similar to Pampered Puppy, for example), is the idea big enough to be able to expand over time? Is there enough to say on the subject to write two or three new articles about it every month? Is there enough there to expand your content beyond monthly articles to other areas - say, product reviews, discussion forums, contests, blogs? You want to pick a subject that will provide you with lots of room and inspiration for content. The last thing you want to discover at the 6-month mark is that you've said nearly everything there is to say on the subject. Take a few moments and sketch out a rough editorial schedule for the first year, with additional ideas for other types of content.

Expandability is also important for a "service" site (think Flickr, Blogger, Amazon Lite). A good knowledge of software design and/or user experience design will help you at this point, because you need to determine what core features you'd launch with, and what could be added over time to improve the usefulness of your site. As "services" aren't my forte, I'll leave that list there, but I highly recommend you speak to/read from some experts in this area to help you determine expandability for your service site.

Scalability

Scalability is another important component. The ideas you're sketching out for your web business must be able to scale from 1 visitor per day to 100 visitors per day to 1,000 visitors per day and beyond. For example, if your idea centers around a community - discussion forums, social networking software, visitor submissions or reader reviews - that idea doesn't work well in all scales. Each of the examples I just used need a critical mass of users before the site becomes a useful resource. While depending on your users to help create the utility and/or content of your site is a great idea, you need to remember that only you will know about the site the day it launches, and you aren't working with large marketing budgets to launch your web business. Growth will be small but steady over the first few months. Make sure the visitors you do get during that time find something of use during that time.

Income streams

Once you have determined that your site is viable, expandable, and scalable, you need to ensure you're actually going to make some money from the thing. While the money will not (I repeat, WILL NOT) start flowing your very first day or even your first month, you need to ensure that you build a business that will allow you to eventually make money in several different ways. Multiple income streams are the key to building a successful business.

A bit of history on income streams. During the dot-com rage, everybody and their brother started a web business with a single income stream in their business plan: advertising. But I'm here to tell you that advertising is NOT the golden calf - it's incredibly challenging to build a web business that survives and pays you lots of money based on advertising alone. If you are hoping that advertising will be one of your income streams, you will need to take a look at your business idea to ensure it will attract advertisers.

Web businesses that attract advertisers have several things in common:

1. They are generally a very targeted site focused on a single, narrow niche (the broader the idea you're entertaining for your web business, generally speaking, the less money you're likely to make via advertising). Web sites about computers in general, for example, are not very targeted. It's too broad a subject to make itself a viable source for advertising. At least, not with the budget we're currently working with. :)

2. Their visitors are generally predisposed to thinking about purchasing products or services online. To take some examples from our original list... If your topic is history of medieval cooking, your visitors are going to be there primarily to learn (in most cases). "Learning" mode is all fine and good, but you'll have a much better chance at success if you choose a topic that pre-sets the concept of consumerism in your visitor's minds: restaurant guides or reviews, products used for food preparation, national supermarkets that deliver. The closer your topic is to the buying cycle for customers, the more likely it is you will be able to attract companies who want to advertise with you. (Remember the outstanding success of Lucky magazine?)

3. They are on-topic to attract a serious number of advertisers. In other words, if your business idea only extends to a handful of businesses (be they products or services) available online, then you're not going to have a large enough pool of potential advertisers from which to draw. For example, if you live in a not-very-wired city (i.e. not many businesses from your city are online) and your web business idea is to list local services, then your potential advertiser pool is very small. You want to ensure that your web business can attract the widest possible audience of advertisers without exploding the targeted nature of your web site into something too general.

4. They generally get a decent number of visitors per month. Which, for the time being, is not you. Reason enough to make sure there are multiple ways to walk to the bank for your web business.

Beyond advertising, there are many other ways out there to make money, and you need to be able to incorporate at least one other method of making money into your web business plan. Each of them come with their own pros and cons, and I could almost write a book on that subject alone, but for now I'll just provide a list of a few options to think about. Please remember that each of these income streams come with their own caveats! Do your research before choosing them!

Other possible income streams include: submission/subscription fees, affiliate income, print/digital products produced and sold as an extension of the web site, branded product sales.

Wrapping it up

The most important thing to remember about your internal evaluation is to be realistic about its possibilities. Discuss, evaluate, and don't be hesitant to discard for a new idea if your concept is limited in one of these factors. The goal here is not to push forward with the idea you've always thought would work; it's to have a successful business in the end. And at times, that means being flexible about what that web business will be.

But even once you've determined that your idea passes the internal evaluation with flying colors, we're not done. Now we need to take a look at the externals: competition, consumer interest, lifestyle trends.

I'll cover the next step, Evaluating an Idea (external evaluation), in my next post.

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