Here's your first step: deciding what your business is going to be all about. Of course, you'll need a product or service to sell—but it should be something people want to buy. Generating enthusiasm for your products or services will sell them better than anything else.

It's the catch-22 of Internet marketing—to be successful at sales, you need something that sells itself.

However, there's another aspect to this secret of success, and it's what allows so many Internet marketers to run profitable businesses. Here's the thing: your products or services don't have to sell themselves to everyone. Remember, you're only targeting a fraction of a percent of the Internet community. That's where niche markets come in.

Niche marketing is one of the most powerful strategies available for online businesses. Creating a niche allows you to focus your efforts and offer products and services people will want to buy.

Why does niche marketing work online? Internet businesses have one big disadvantage when it comes to sales: there is no personal contact with the customer. Online shoppers can't pick up and examine your products, nor can they see your services in action (unless, of course, you're a website designer). The deciding factors for most people when they make Internet purchases include:

The known factor: online merchants such as Amazon or eBay

The professionalism and appearance of the website

Testimonials or recommendations from other customers

Price, options, and speed of delivery

Whether or not they can get the products or services elsewhere

There are two steps to finding your niche: choosing an industry you love, and determining what that industry is missing.

You must be able to generate enthusiasm for your business. Particularly in the early stages, you will be living and breathing whatever it is you've chosen to pursue. If you get sick of it, you'll put less effort into making it work.

Other than staying power, having passion for your business helps you increase sales. When you're enthusiastic about your products or services, and you truly believe what you have will benefit other people, that passion comes through in your dealings with customers—even on the Internet.

Note: For best results, answer the following questions honestly, and as completely as possible.

YOUR PERSONAL DEMOGRAPHICS

• Age

• Gender

• Geographical location

• Type of home (apartment/house/trailer, city/suburbs/country)

• Number of children/grandchildren

• Ages of children/grandchildren

• Single/married/divorced/widowed

• Religion, political affiliation, family income range

• Other pertinent information

YOUR BACKGROUND

• Companies you worked for

• Positions you held

• Organizations you volunteered for

• Community activities

• Groups you belong to

• Diplomas/degrees you earned

• Classes or specialized learning programs you completed

• Any other accomplishments

YOUR HOBBIES AND INTERESTS

• Past and present hobbies

• Personal collections

• Things you've “always wanted to do”

• You favorite books and genres

• Your favorite songs and types of music

• You favorite movies and/or television shows

• Pets past and present

• Anything you do for fun

Once you've determined the best area for your business, it's time to do some brainstorming and research. Find out what your industry is missing, and develop a product or service that will fill that need—this will be your niche.

Before you begin your brainstorming process, keep two things in mind. One: have a notebook and pen with you at all times to write down ideas as they occur. And two: write down any idea that occurs, no matter how far-fetched it may seem. One of your crazy ideas might just develop into a viable niche product.

That's it for now...you have plenty to do so all you need to do now is get started.