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10 Online Business Mistakes You Need to Avoid

by Steve Scott | Join Him On Facebook

It’s time for another edition of “Letters to Steve.”   In this series, I answer questions about Internet marketing, lifestyle design or anything else on your mind.  Today, I’m going to cover something William asked in the comments section of a recent post.  Specifically he wanted to know what mistakes to avoid with an online business.

This is a great question because I’ve learned more from my mistakes than anything else.  Here’s what William wrote…

Hey Steve,

Got a great idea for a high value post, not sure if I have to email you for your letters to Steve, but this way is easier anyway.

I would really like an exhaustive list of the mistakes to avoid as an internet marketer/online business owner. The don’ts of IM to help everyone here to not end up like 95% of the people attempting to create a profitable online business.

However, I am also talking about more than just mistakes to avoid as we progress to build businesses, but also the necessary things to ensure we build a lasting profitable business. The kind of things that are MUSTS when in the starting stages of an online business to ensure a solid infrastructure and to ensure it does not consume us and allows us to “remove” ourselves to enjoy life outside of the business while still growing it and managing it of course.

To kind of lead your thoughts on the post for these two things that I am looking to know ALL about, here are some examples: not understanding your TARGET audience and speaking TO them, failing to keeping track of revenue, profit/loss, for financial management/tax purposes, constantly analyzing/testing and tweaking, and creating automated systems. These seem pretty basic as I am not experienced, but I am sure your experience gives you way more insight and understanding.

-          William

<<<MY RESPONSE>>>

Hey William,

Thanks for taking the time to provide a very detailed set of questions.  To be honest, I’ve made countless mistakes with my online business.  The good news is I’ve learned a valuable lesson from each misstep.   All have helped me build a solid foundation of Internet marketing expertise.

To answer your question, I’ll list a whole bunch of mistakes I see a lot of Internet marketers making:

Mistake #1- Not Picking the Right Niche

I’d consider niche selection to be the most important step of the entire Internet marketing process.  The wrong choice means a lot of wasted effort, time, and money.

Before 2006, I started a few sites that died a miserable death because I didn’t pick the right topic.  The only smart thing I did was cut the cord when I knew they were doomed to failure.  What I learned is the importance of picking the right niche before starting a web business.

In my opinion, you can be a lousy marketer and still make some money if you’re in a good niche.  But the reverse is also true.  The wrong topic means you’ll probably fail – Even if you’re the best marketer in the world.

I can’t overemphasize the importance of selecting a quality niche.   That’s why I highly recommend downloading my free report on 41 Hot Internet Marketing Niches.  I wrote this guide with the intention of helping people take the first step towards building a successful Internet marketing career.  So be sure to check it out if you’re struggling to find a profitable market.

In addition, I recommend reading up on niche and keyword research.  Below I’ve listed a few videos and posts that discuss these topics.  I didn’t create the videos myself, but I feel they do a great job of describing what it’s like to a find a great niche:

Mistake #2- Having a Short-Term Mindset

It’s easy to think only about the short-term.  We all have bills to pay and dreams to support.  The problem is this mindset affects what you do on a daily basis.   I know most “make money online” courses promise instant results.  The truth is I’ve never heard of a single Internet marketer who achieved success overnight – It really doesn’t happen!

Take a long-term approach to Internet marketing.  This means spending time researching a niche and then single-mindedly working on this business.  You don’t give up when things get difficult.  And you don’t buy into that hot, new product everyone’s promoting.

The best comment I’ve ever heard about Internet marketing came from a $1200 affiliate marketing product I purchased from Ewen Chia in 2006.  In this course he said something like – “Be prepared to invest 2 to 3 years in a niche.”

This is great advice because it forced me to take a long-term approach with my online business.  Instead of worrying about making money instantly, I developed the attitude that all my efforts will lead to success down the road.  Start adopting this mindset NOW!

Mindset #3- Not Having Passion for your Niche

The following might contradict what you’ve heard about Internet marketing – You can create a successful web business around a niche that’s not personally interesting.  I’ve seen many examples of people who make lots of money from a niche they don’t like.  Currently I’m in a niche that was initially interesting.  Now it’s not a lot of fun for me.  But, I’m still making money from it.

With all that said, I think you can be a lot more successful (and find more enjoyment) by building a business around your passion.   Again, take a long-term approach to your niche.  Find something that’ll inspire you for years to come.  Even better – Find a way to blend what you do for fun with a solid business idea.  Kind of like my friend Jay who paints surf art while interacting with people who share his love of this sport.

For me, it’s easy to write content for this blog because it’s what I think about on a daily basis.  I love this stuff and I hope readers feel the same way.

Mistake #4- Paralysis by Over Analysis

Yes, it’s important to do research and know the facts.  However, I’ve found many people make excuses about “needing more information” before getting started.    At a certain point, you need to stop reading and start doing.  You’re going to make some mistakes.   But don’t let a fear of failure prevent you from taking action.

My advice is to find the best online business model for making money and start right away.  If you encounter an obstacle, do more research and learn how to overcome it.  Keep doing this till you achieve success.

A common element in super-achievers is they’re not afraid to take risks.  They probably screw up more than you and I.  But they also learn from each experience which brings them to the next level.  Personally, I’d rather make a bunch of mistakes if it helps me improve my life.

Mistake #5- Not Taking a Total-Business Approach

Like I said before, it’s important to find a business model then get started right away.  With that said, I think it’s important to build a total online business.  This is a plan that incorporates all aspects of Internet marketing.

As an example, a total business makes money through:

Furthermore, this business model is supported by a number of different traffic generation activities like:

  • Writing ezine articles
  • Building an email list
  • Creating blog content
  • Utilizing social media
  • Search engine optimization
  • Networking with other Internet marketers

It’s important to focus on one business model (even a single traffic generation tactic) at first.  Once you get results, take it to the next level.  You’ll find that having a total-business mindset is the secret to reaching the next plateau in Internet marketing.

For instance, let’s say you have success with affiliate marketing.  Instead of resting on your laurels, find a popular topic in your niche and create an information product.  Once that’s done, move on to a blog…or write another eBook.  Keep doing this till you dominate a niche.

Mistake #5- A Failure to Create Systems

All successful businesses have a plan – Even if it’s written down on a small piece of paper.  This blueprint should have a detailed description of all the processes involved.   It answers simple “how” questions like:

  • How do you attract attention among all the Internet noise?
  • How do you generate leads for your business?
  • How do you re-attract people who were initially interested , but left without taking an action?
  • How do you build authority and credibility with subscribers?
  • How do you turn prospects into paying customers?
  • How do you make somebody into a loyal, life-long customer?

A plan doesn’t have to be overly elaborate.  Nor does it have to be written in stone.  The key is to have something written down.  Then it’ll be adjusted as you get feedback from your marketing efforts.

Mistake #6- Not Testing and Tracking

It’s incredibly important to know your stats.  The funny thing is most people don’t have a clue where their web traffic comes from or how they make money.  Let me give you an incredibly simplistic key to success with Internet marketing:

“Success with an online business comes from finding what works and doing more of that.”

Seriously, following this statement will lead to a highly successful Internet marketing business.  I suggest tracking everything, then tweak what’s working and ditch what’s not.

What do I mean by tracking?   Well, here are a few things you can measure:

  • The open rates of your autoresponders
  • The click-thru ratio of your email messages
  • Which affiliate products produce the best income
  • Different traffic generation strategies
  • Your landing page opt-in rates
  • Split-tests that measure different actions readers take

What I suggest won’t be easy.  I recommend putting a separate tracking code for every single factor in your online business.

For instance, at one point I tracked every single ezine article promoting my affiliate site.  I’m talking over 500 articles with the same number of tracking codes.  Yes it’s a little obsessive.  However this technique helped me know what articles got the best response from readers.  Then all I had to do was write more of that type of content.  Makes sense, right?

Another example is I used Clickbank’s tracking code to monitor every single affiliate offer.  At the end of each month, I compiled what promotional efforts were making the most money.   As a result, I produced more income because I knew what methods brought the greatest level of income.

To get started with testing and tracking, I recommend the AdTrackZ program.  This software helps monitor every type of tracking you’ll need to do.  In addition, it’s great for doing split-tests which is another great way to improve a web business.

Mistake #7- Ignoring the Importance of Web Traffic

Web. Traffic. These two words should be burned into your head.  Without web traffic an online business will die.  The best Internet site in the world won’t make a single dime unless it has a large amount of traffic.

One of the most important skills in Internet marketing is traffic generation.  While writing is important, I feel you can be a bad writer and still make money.  (To this day I wonder how I was able to make money as a newbie because my writing was horrendous.)

Right now, make a commitment to learn everything you can about traffic generation.  Furthermore, be sure to check out my weekly series on blog traffic.  Even if you don’t manage a blog, I feel this course teaches a lot about different techniques for driving traffic to any online business.

Mistake #8- Allowing the “Inner Sleazy Marketer” to Take Control

We all want to make a lot of money.  But don’t let this impulse to control how you run a business.  Most people have developed an acute bullshit detector when it comes to online marketing.  Ultimately, allowing your “inner sleazy marketer” to take control will be destructive to your business.

It’s really easy to get people to hit the “unsubscribe” button.  All you have to do is turn your list/blog into a constant pitch-fest of every product under the sun.

I know this from personal experience.

For the longest time, I promoted a lot of products to my affiliate marketing list and didn’t give much value in return.  I do think the products were high quality.  But I forgot about the cardinal rule of Internet marketing – Give value before asking anything in return.

Right now, I’m making a big transition with my affiliate list.  I now give a lot of content before asking subscribers to spend money.  The result is I have higher retention rates and I’ve increased my overall profits.

Bottom line is you can easily burn a list by doing too many promotions.

Mistake #9- Having the “Must Beat the Competition” Mindset

Internet marketing isn’t about winning at all costs.  You don’t need to crush your competition in order to achieve success.  In fact, I’ve learned it’s wiser to form alliances with people in your niche and find ways to work together.

Every major niche has more than enough room for multiple marketers.  In fact, as more people use the Internet, it’s going to be easier to carve out your own slice of the pie.

For example, my information product is in a very competitive niche.  Instead of trying to beat my competition, I’ve developed a relationship with a number of eBook authors.  We promote each other’s products.  Sometimes we recommend people’s affiliate programs.  And we stay on top of what we’re all doing.  The end result is we’ve built a pretty strong coalition that looks for the win-win in every situation.

Mistake #10- Not Enjoying Life

It’s easy to get wrapped up in an online business – Especially when you’re getting results and making money.  I don’t think there’s anything wrong with dedicate a lot of time to an online business.  But this shouldn’t go on indefinitely.  Ultimately it’s important to create a work/life balance.

I make a pretty good income from Internet marketing.  But this would be worthless if I wasn’t able to enjoy things like: Relationships, traveling, running, and simply enjoying the freedom that an online business provides.

I truly love Internet marketing.  But I also enjoy life.  Sometimes you need to disconnect from the Internet and do what makes you happy.  We only have a limited time on this earth.  Don’t get caught in the trap of continuously saying, “I’ll have fun tomorrow.” One day you won’t have a tomorrow.

Final Thoughts on Online Business Mistakes

We all make mistakes.  I’ve made a ton with Internet marketing.  Hopefully this post will help you avoid some of the major missteps I’ve taken in the last seven years.  Some of these lessons were pretty hard to learn.  So please do me a favor and avoid what I’ve just discussed.

As we close this article, I’d like to hear what you’ve gone through.  In the comment section below, please list a few mistakes that you’ve made and what they taught you…

Take Action. Get Results.




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{ 34 comments… read them below or add one }

Fran Aslam

Hi Steve:

I was up almost all night surfing the internet. But to my surprise your post was up when I looked at 6.00 am. Very informative post for the one who is ready to plunge in the
business to start it as they are desperate to start make more money.

I read it once but want to read it another time. I like how you said how anyone can make money with a profitable niche even if they are not passionate about. I agree with you. Because once you have the effective motivation to achieve a goal you can do anything to achieve it.

Hard working, and persistent people can easily do it and every can do it. I know people who worked in a job they did not like all their life. Such is life.

So, I m thinking Turkey and you are thinking for me to be careful and do not make these mistakes while selecting my niche. Thank you. One more reason to be thankful about.

Have a fun day, and be more successful

fran A

Reply

Steve Scott

Fran,

I am actually way ahead on post for first time in a while. So all this week is pretty much in the bag and just waiting to be posted. It is a good thing. Since I havent had time to really be on at all in the last few days. So they should all go up nice and early automatically.

Anyway, I am glad you liked it. I tried to give some quality information and i am glad you liked it!:)

Getting involved in something that you care about is of the utmost importance for future success. it is rough but the first steps you take for these online and affiliate businesses are sometimes the most important. On the birghtside. once you learn some lessons, it becomes really easy to start over and do it “right”

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Barbara Ling, Virtual Coach

Here’s my favorite:

“Mindset #3- Not Having Passion for your Niche”

I have some of the *best* domain names for some of the *hottest* trends…but honestly, I have zero interest in them. So some year, I really do need to sell them off.

Passion, for me, is the number one priority.

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Steve Scott

I think as people get really good at internet marketing, there is certainly a way to make money where you are NOT passionate about things. You make a great point though…why would you want to.

There could be some point in working a site for a little rank to “flip” it, but there are so many topics out there, if you can find one that you wake up looking forward to getting up and writing, why would you ever want to do anything else?

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Susan @ Easy At Home Workouts

Hey Steve, another great and very thorough article! One of the most important points you make is not having a short term mindset. I have no idea if there is an average time it takes to make a certain amount of money from having an online biz, but it isn’t quick, especially if you are a first timer starting a new blog. We do make a lot of mistakes in the beginning with a large learning curve. Even if you know what you are doing it still takes a ton of time. I had NO idea it would take this long. But I am totally passionate about what I am doing, so, as long as there is a light ahead somewhere I will continue to educate my weight loss and fitness clients. The other big mistake I made is not putting into action what you learn immediately. I do almost immediately now!

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Steve Scott

Yeah, the idea of “quick” profits is one of the biggest “lies” in the biz I think. Some things like like affiliate marketing can be a little bit quicker to gain “some” profits and other like Blogging can be a much longer term money makers.

The thing is that once you get rolling and learn mistakes it does come easier and quicker….even though it still takes time and effort to get it done.

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Ryan Biddulph

Super 10 stips Steve.

LOL on the oh-so tempting sleazy marketer bit. When the chips are down it’s tough to resist the urge to use bullshit marketing tactics because you’re desperate. I’ve been there – as have most of us – so I know how it feels.

Big picture thinking helps in this area. When positioning yourself as an authority you do what an authority does even when your results don’t scream authority. Taking the high road prospers you now and for the future.

I’ve made just about every mistake too. Systems are a biggie for me. Always think exit strategy. One day you need to have a system in place; auto-pilot is one of the goals as we don’t want to sit in front of a PC typing away into our 70′s.

#10 is money and #1 on my list. Enjoy life, build a vision and everything else seems to fall into place. When I choose to stress things get tough but when I relax and laugh at it all things get easier ;)

Thanks for sharing and have a powerful day!

Ryan

Reply

Steve Scott

Ryan,

What you say about systems is really good. Having an automation goal and plan in to eventually “get away” is essential. Getting away may mean moving on to new projects rather than “quitting” But having such a game plan is essential. There may be many things like posts on you blogs that you HAVE to do most of yourself. But just about everything else should ultimately be systemizable and able to outsource (at some point).

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Moon Hussain

Great list there Steve! I can’t make money online by being sleazy…. I couldn’t live with shady, greedy self haha.

Or people can read some of my free ebook and see the mistakes I’ve made ;)

Reply

Steve Scott

I love mistakes. I think they are a great chance to learn and grow. Sometimes you need to make them yourself to “really” sink in, but you can also jump the process a little by learning some of the mistakes of others. You will still make your own mistakes, but perhaps not as many or as big.

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Tito Philips, Jnr.

Thanks for these great tips Steve. Most importantly for me was having a total business model to it. Seeing every step as a foundation for the next and also having a long term view of your business, getting rid of the get rich quick mentality.

Good one.

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Steve Scott

Yup,

Dumping get rich quick is one of the biggest benefits people can do when approaching an online business. The long term approach really is the only way. You can generate “some” success earlier and easier, but real success requires building a solid system that lasts.

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Brandon

Ouch Steve! That #1 kind of goes against what I know about marketing. You can still rock an income on a bad niche. There are still people out there looking for it. It’s just a simple matter of going where they are. Also, how do you define a bad niche? Take for example, I can sell $10,000 reputation management services or celebrity pr services for just as high. But with logo design services, you are likely to push them out for a couple hundred bucks.

If you are speaking purely of adsense, amazon, affiliate, etc, then you can still make a profit from it just by marketing the sites. Never count out a dollar man.

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Steve Scott

Well, it may come down to what definition of bad niche is. Some niches might be “bad” for a brand new internet marketer but fine for someone with a lot more experience. That would be the “competition” factor. You could likely handle it fine but someone brand new getting into a niche might have a hell of a hard time getting any traction.

The other main factor I was thinking of is commerciality. There is money to be made on a lot of things, and thinking of something no one else has thought of just means you have the market to yourself. BUT the way I see it some things are much less likely to turn a profit. Like movie fansites. There may be a lot of interest in a flick, and It may have a lot of fans, but it would be hard to turn a profit from that since people go to those sites looking for information not to buy. There are sales there…but the question is is it enough to justify the effort.

As long as people hit the site with at least a vague notion of buying something it is probably a good niche.

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Karen

Geat tips for some very common mistakes, Steve

I think so many people want to buy into the “instant” “passive” money-making opportunities and don’t realize the amount of hard work and sacrifice is needed. You got some very useful advice back in 2006 when you were told that it would take 2-3 years to see a return. Good for you for being aware of that and yet sticking with it, as your hard work and sacrifice are paying off. I also think that many people want to create an online business but are stumped at the so many options and people telling them what to do. It can be overwhelming and you also have to be aware of the scammers out there. But, that shouldn’t stop you from taking that first step. As you say, even if you pick the wrong niche or are on the wrong track, you can always change your approach (and learn from your lessons along the way).

Thanks,
Karen

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Steve Scott

You are right about too many options. There really are a ton out there and it can be hard to see through the noise sometimes. The important thing is to find a model that really works. once you do that you can hopefully keep plugging away until it really comes to fruition.

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Daniel Sharkov

Hey Steve,

That was an amazing read mate! One can really learn from the mistakes you have included in the post. Choosing the right niche to work with, is one of the most important ingredients. If you mess up that one, pretty much nothing else can save you. Trying to go with something that you are passionate about is a good thing, hwoever whether you will go for success, depends a lot on what exactly your passion involves. If the niche does not have potential, wasting time is not much worth it.

The second point I really liked is the one about acting. Reading is always a good thing, as it can help in many aspects of your business. Only reading is not going to lead you anywhere though. One should not be scared of potential mistakes – it’s human to make mistakes. Not trying and taking your chance is foolish. Better act now and make a mistake, instead of waiting and waiting for the “perfect moment”.

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Steve Scott

Daniel,

You pretty much nailed it. Just about everything you do besides the niche you pick is correctable. If you do not know anything about SEO. Don’t worry about it…write and fix SEO as you learn it.

I think of it as pen and pencil. Your basic niche you write in pen. There is only “minor” tweeks like slightly narrowing it that can be done after you start. But everything esle is written in pencil. You can go back and fix it at any time.

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Mike

Awesome article, Steve and thank you for bringing up the point about testing and tracking.

This is very essential process, yet I think many bloggers still did not fully understand about it. Testing and tracking is not simply just install Google Analytics into your blog. It involves a lot of steps, with different kind of measures and indications. For example, different sales copies yield different result. Even different button color can make your conversion rate goes up to several percent. Testing and tracking is a must-have for every blogger and marketer. Do you agree, Steve?

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Steve Scott

Mike,

Sometimes I feel I might get “too” involved in tracking some things. But still, like you said, there is no real way to know for sure what works and what does not work until you take the time to go and check it out. Theonly way to do that is to analyze the data.

Overtime you can decrease it a little once you “know” the answers. But even then some monitoring is important, because things on the internet change fast, and what works like gangbusters right now may not work worth a damn 1 year from now as the audience matures.

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Dan Lew

I would put a 11th one there and most important one, NOT PICKING THE RIGHT KEYWORDS!

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Steve Scott

I “kinda” think of keywords along with niche. But yes even thinking of including the idea in nche it is important enough to mention twice, and if NOT included in a niche it is very worthy to have its own entry.

Wrong keywords…or insufficiently researched ones just lead you down the wrong path, making a lot of your efforts “that” much more difficult.

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Patricia@lavenderuses

Hi Steve

Excellent post. So much information and I am going to be marking some of them down to make sure I heed them! I love how you just tell it as it is. Also you admit to your mistakes so that makes it more real for us to believe we can do it too. So much fluff out there and I’ve heard it all!!! Great article Steve. Now time to RT.

Patricia Perth Australia

Reply

Steve Scott

Thanks Patricia,

I am glad you liked it. I do try to be no (or at least very low) BS. There is always things to learn from mistakes and learning a few lessons from someone who has made a few is somethign that will hopefully help and/or inspire a few people.

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Bryan

Steve,

Superb 10 online business tips! Well said and written. What struck me the most was beating the competition. You’re right, instead of trying to beat the competition form alliances and get help especially in a competitive niche. I find that if I try doing things alone, it’s tough. Gonna RT this!

Reply

Steve Scott

Thanks for the RT Bryan!

Joining a community rather than trying to “crush” everyone related is something that can never be underestimated. It is sort of the old analogy of catching more flies with honey than with vinegar.

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Adam Paudyal

Steve,

What an awesome post !!! Packed with information real handy for people that are willing to take action.

The importance of having long term goals is really important. Today, I was talking about the same thing with a friend of mine who just started blogging!! I even told him that you are the guy to follow, as you always know what you are talking about :O)

The only way to learn is from failures. I know you always emphasize how important this is. I agree one has to test an idea to know if it works for them or not as something that works great for somebody may not work for somebody else.

You are one freaking awesome dude man..no doubt about it !!!

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Steve Scott

Thanks Adam,

I really appreciate it. Telling one of your personal friends to follow someone is really one of the biggest compliments you can give someone. I really appreciate that, and hopefully there will be some things that really can help/inspire your buddy.

Thanks a lot for the awesome words. They really helped to inspire ME! :)

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Mark of Success

Steve,

Great post, and a very detailed answer to William’s question.

As for me, I write about something for which passion comes from deep within me. I began writing about it because I realized so many ideas were coming to mind, and disappearing quickly too, and it would be a waste if I did not log them somewhere. Blogging came a lot later for me, and it was just notepads for a long time. So it was passion for me all the way, and I hadn’t even heard about niche marketing back then.

I’m yet to dive into affiliate marketing, so the mistakes you’ve laid down here related to marketing, competition, business mindset, systems, etc. will all be good points for me to keep in mind. Thanks for the nice post!

By the way, looks like no one realized that you repeated #5, so there were actually 11 tips in this post :-)

Cheers,
Mark

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Walter

Honestly, I’m not sure what my niche is. All I do is just write thing about my experience and about life in general. But I also think that it’s important to know my niche, and perhaps in the long run I will slowly find it. As for know I keep on learning and I truly appreciate what you have shared here. :-)

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Steve Scott

I hear you. My “niche” is a little on the “broad” side too. I am constantly thinking about narrowing it even more -I have narrowed it some since I started- I think it is sort of an ongoing process as you grow.

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John McNally

Very good advice Steve.

I’m always drawn to the “10 mistakes to avoid” type of headline. Mistakes are about human fallibility. It’s not a perfect world but knowing some of the pitfalls will help.

I have downloaded and printed your “41 Hot Niches”, and will be reading it next. I already like the design and page style. 8)

John

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Mk Akan

First comment here Scot,
Got your “41 hot niche e-book and loved it…got to your blog from blogenage…
i agree picking a profitable niche is the first and important thing to do..seconded by having a long term mindset..most times we think since evertything online seems fast,making money online should be fast too.bad having a long term mindset ina bad niche is a total disaster…am still digging for the perfect niche….your doing a great job..
i really love the reference to the 2 two in book -steve and scot that were running in the jungle…really expressed what competition really meant…would spent more time here…thanks

Reply

Steve Scott

MK!

Glad to have you join and glad you read and liked the 41 niches report. I am busy working on another free report now, hopefully between that and the daily posts here there will be a lot of information here you may enjoy. I look forward to hearing more from you and hope you keep visiting.

Thanks for your time and comment! :)

I hope you are having a wonderful and productive week.

Reply

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