This post was guest blogged by Gaj Subudhi of prosperpreneur.com, A site dedicated to helping entrepreneurs prosper in internet age.

In this post I will go over an important principle which will define a constructive guide line as well as a frame work of operation for your online business.

We will use the most popular principle from Italian Economist and Industrialist  Vilfredo Pareto to define a set of guide lines and rules of operation that will minize the loss and maximize the profits in a very less time.

Pareto’s Principle states that, for many events, roughly 80% of the effects come from 20% of the causes.

In this case of setting up a profitable online business,  making  money   is the  effect  and the causes are the activities you do in order to achieve this  ultimate goal of making money using the internet.

Now lets break down the set of activities involved in your making money online venture..

Running an online business  without following pareto’s principle,  will involve the following 3 major activities mentioned below in respective order………..

1. Finding some products or services to offer based on your area of interest or expertise.

Breaking down this major activity will involve the following 2 steps.
• a.  Doing keyword research  in those markets and  competitive  market analysis of existing products and services in those markets.
• b.  Selecting  products or services based on your keyword and market research.

2. Finding customers and prospects who are interested for the products or services you want to offer.

This major activity will involve the following steps mentioned below.

• a.  Advertising your your products and services to targeted audience
• b.  Finding out the winning advertisements and channels and scaling it up for more  reach and  more audience.

3. Making them to take advantage of  products and services you are offering.

This major activity will  involve the following steps

• a.  Write a compelling offer and sales copy  based on the benefits and features and presenting them to the  targeted audience.
• b.  Increasing sales  and profits by developing backend offers and big ticket up-sells  to generate more profits

There are some fundamental elements  which makes it tough for a  online business to  see results in  terms of results , profitability and growth by operating in the tradtional way as mentioned ablove.

Internet is changing very fast and all the above steps mentioned above  takes its own time for you to accomplish and perfect  it to be profitable. That means by the time your make your product or service perfect and profitable  you might have to tweak your offer to meet the fast changing expectation of the market  due to all changes in the internet.

Situation become even  worser  because of the fact that  internet is a very insecure place for people to trust anybody and develop a relationship with the  person or businesses offering the products or services.

This involves some other set of challenges which requires  some specific strategic moves as well as excution plan even before you get started.

Applying Pareto’s pricniple will  help you  over come these challenges and be profitable in your online venture from day 1.

Before we start  to think about applying Pareto’s principle we have to understand the fact that most of the time people spend time on line  in order  to find out useful and relevant information  which will help them to overcome the challenges they face or get rid of the pain and frustration they have.

That means  in order to be profitable or maximize  our return on invest we have to focus  on the kind of information  or audience who are close to make a buying decision.

This simple fact changes the entire game and the actitivties you need to take in order to  minimize your risk and maximize your online profits to start with.

1.Find out where are your  buying  audience.

This involves  some critical steps which is necessary for your online business to be profitable fromt he beginning. ( DO NOT MISS THIS POINT)

• a.  Focus on finding out what sells online and where are they buying from.
  For example : look at pulse.ebay.com and see what kind of products and services are selling now and which market they belong to.

  Visit paypal.com shopping mall and see which products or services are selling high and which market they belong to.

  Visit amazon.com and clickbank.com to  see which books or information products are selling.

  Visit cnet.com, itunes.com apple.com and   other reputed sites like buy.com and magazines.com , dummies.com etc.. and see what are the hot selling topics and markets.

• b. Identify the buying keywords  specific to the top selling markets. You can find them from relevant sites as well as doing some keyword research using FREE  google’s external keyword tool.
• c.  Do some research in google and find out the keywords with higher buying intentions while searching in google.

2.Understand what they want and how you can make them prefer you as their ultimate solution provider .

This step is even more critical because even though you find out a winning market and a buying audience who is looking for an offer you have, if it is not presented in the form they prefer, it may be tough for you to close a sale.

More importantly it should be presented to them with an intention to  fulfil their emotional need and desire rather than just the features and benefits.

3.Give them what they want  and how they want it and put a system in  place to follow up with them and make them happy.

This step makes it even more critical because if you are not able to deliver your products, servies or solution in the preferred format you may not be able to win the trust of your customer  and preferred clients and they will not come back to you again seeking for the solution they need.

To summarize this step and make it more easy and understandbale on your part. I  would like to conclude this post with 3 simple rules which will guarantee your online success and profits while  minimzing your  time and efforts and maximizing profits and ROI.

Here is the summary.

• 1.  Find out the audience with buyers audience first.
• 2.  See what they are buying and where they are buying from.
• 3.  Sell  the best performing affiliate products or services to start with and make less %age of profits   and then replace it with your own products or services if you can offer a better solution and keep 100% profits out of it

.

Stay tuned for more updates and interesting  post which will literally run prospects and customers to you and beg you to take their money in spite  of  all other competitors out their.