Remon Talks

Many people who become self-employed fail to reach their goals because they chose an oversaturated market to operate in. I’m guilty to this myself when I first started a business, I chose webhosting! While I still own the webhosting company to this day, I don’t ever see it grow out to be a big player in the webhosting market.

The reasons I chose webhosting was:

1. Low start-up costs
2. The thought that every website online needs webhosting
3. I dropped out of school, I had no money left so I had to do something to bring in some cash

Unfortunately, I forgot some other important point based on the reasons above:

1. Because of the low start-up costs, everyone and their grandmother started a webhosting company
2. Every website does need webhosting, but most website owners are happy with their webhosting provider so they don’t even think about switching to someone else

Because the money needed to start a webhosting company is so low, many new webhosting companies are setup each and every day. All these companies are fighting for the same clients. In Holland, but also in the USA, the webhosting market is definitely oversaturated.

Time investments in oversaturated markets

It’s one thing that getting clients is not as easy at it used to be, but because of the big competition prices start to drop. In the end, the only way to make a good profit is buy having many clients. But many clients have many questions, and answering those questions takes a lot of time, thus causing you to put less time in other business ventures.

There are methods to decrease the time needed, I’ve setup a large client area where most questions they have are already answered. Invoices are automatically created, domain names are automatically registered and account information is automatically send to the clients after signing up.

Fact of the matter is however, it’s still hard to get more clients. Sure, you’ll get some clients referred by happy clients, but with all the superduper low priced webhosting packages today it’s harder to get the quality client.

Client profiles

See, in webhosting, the less a clients wants to pay for his package, the worse kind of client it usually is. The clients with a higher priced package, the quality client, almost never have questions or problems. The “cheap client” emails you very often, and you better be sure to answer in a few minutes or you’ll see him leaving negative reviews on all the webhosting review sites!

Research

But we’re getting a bit offtopic. The point is, if you choose a market to operate in, research it, and research it well. Know all the ins and outs of a market before you take a dive into it. You don’t want to be competing with thousands and thousands of competitors. You can spend that same time on some niche market and become the king of that market with the right marketing, even on a low budget. If you want to be the king of a market like webhosting, you better bring a large budget with you.

Help! I already chose an oversaturated market?!

If you already chose an oversaturated market, there are still ways to increase your profits. Start targetting niches! Let’s stay with the webhosting example, instead of targetting “the world”, start looking for clients in upcoming countries like the Czech republic or Slovenia. The only, minor, problem is the language, have a translator translate your site in the right language and handle email support in english, or outsource email support to a local if you can afford it.

Instead of focussing on upcoming countries, you can also target different niches. Sell webhosting for schools, webhosting for start-up businesses, webhosting for blackhat SEO’s, webhosting for affiliates, webhosting for florists, you get the idea. If you choose niches like these, try to add some value to the sold packages such as usefull tools for that market.

Conclusion

Don’t make the same mistake I made. Although I still earn a nice sum of money from my webhosting biz, the market is now even more saturated then when I started. Don’t start a business because there’s no money coming in (like I did), instead find a regular job, save money, and start a business in your free time. Once business starts booming say goodbye to the dayjob and put your time in the business.

Research the market before you start! Read everything you can about it, visit forums, ask questions and try to get your hands on statistics, any statistics related to your market. A niche market is many times better then an oversaturated market. Don’t compete with thousands of competitors, it’s probably not worth your time.

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