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How to assess the potential of an Internet business

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Determining the profitability and potential of any web project

Currently, there is an upward trend in the development of online business. Many have already taken their niches in this business, and many only want to occupy. The question is, will they have time? According to the author of this article, who is also the administrator of this portal, the trend of Internet business is still growing, but is already approaching its peak. Most areas can only be successfully entered with good investments, due to the high competition in organic search results. There is simply not enough traffic for all. In the SEO community, the opinion has long been formed that it is not worth optimizing sites for high-frequency queries, but only for low-frequency ones. In many areas, there is not enough low-frequency traffic for everyone. But do not think that everything is so sad. There are still plenty of holes in the Russian-speaking Internet segment, where there is low competition and where else you can have time to enter with a low budget. This was a preface. Now let's move on to our main topic - how do we determine the potential of the Internet business and what does it depend on?

Let's say you have an idea. For example, should you open an online store selling mobile phones or accessories?
Let's go over several points with the questions to be answered:

What is the competition in this area?

Type a query into a search engine and see how many pages are filled by competitors. If your competitors have more than 5 pages of search engine results, then there is no point in entering this business without a good advertising budget.

How serious are your competitors?

For example, if you are going to make a bulletin board for the whole country, your competitors will be such giants as Avito and Yula. To compete with them without a multi-million dollar advertising budget is crazy. It's another matter if you have chosen a narrower niche and there will be no such serious competitors on your way.

How popular is your idea?

It happens that an idea may be quite ingenious, but if there is no demand for it, then it costs almost nothing. Go to Yandex Wordstat and check the frequency of search queries in your direction.

How profitable will your project be with minimal success?

We set the bar of minimum success in order not to overestimate our expectations. The minimum success of the project is going into a buzz. If the project has paid for itself at least 1%, it can already be considered a success. You need to understand under what exact circumstances your project will break even. What should be the attendance? What will be the minimum conversion for a certain number of traffic? If you have experience in promoting Internet projects, this is good and you understand what this is about. And if you have no experience, then it will be more difficult to make calculations and make predictions.

How large is the customer capacity or traffic capacity in your chosen industry?

This is a very important point, because the future of your project depends on it. The answer to this question will help you assess the potential of your idea. It happens that people create projects in a completely low-competitive niche. Then they go into breakeven and then their projects simply stop developing. This happens because in any area there is a limited capacity of traffic and customers.

What investments in the project are needed and after how long will they be fully justified?

The moment is very important. You must understand exactly what the growth of the project capitalization should be, so that your investments return and the project continues to make a profit.

What is the peak profitability point for the project?

Only experienced webmasters or investors can answer this question. But if you already know the answers to the previous questions, then you can give an approximate answer on this point. Why is this moment highlighted at all? Any project has its own lifespan. Death Valley, then rise, peak and decline. At the peak, you already need to make decisions and think about the risks of a decline in traffic and capitalization. The risks, of course, need to be diversified.

That's all. I hope this article helped you with something. Evaluate your ideas as clearly as possible. In the Internet business, as in any other, it is important to have a cold calculation, without emotions. Do not hurry. Good luck!