Section 1.07 – Online Industry

The online industry 

This training will be of great value to your progression and online experience. It is designed to develop you as an Entrepreneur to make a significant contribution in delivering a business behavioral model to succeed in the digital online Arena.  

It is the best industry to be involved with, and in the long term, it will open doors of opportunities for your future. We ask you to take this training very seriously and align your goals to complete the Sections and Modules.  

We encourage you to learn about the whole online industry to gain insight into future directions or your business niche and be involved with an online business to get practical experience, one day you will need this experience for your own business model to achieve success.  

Some people would dream of success, others think of success, whilst others make it happen with the online industry – Melvin Mayard 

There is no significant internet big bang evolution. 

Everything starts with a natural person going online for some form of business trade with a product or service. There exist only two format processes, 

1. Real-physical world to the online digital virtual world. 
2. Real-physical world to the virtual world and back to the real world.  

• World-digital = sell digital items. 
• World-digital-world = selling physical products and services.

Online industry 

Depending on which sector, online learning alone is said to be worth ‘The $107 Billion Industry That nobody’s talking about, hardly anyone has noticed, but the online learning industry is exploding’, Inc.com (2016)

No one really knows how much the whole online industry is worth as a calculated guess it would reach several trillion a year. Do you now see why you need to learn how to operate online?     

Today as we are all forced to move and operate online, by 2025 we can easily estimate the online learning industry to be worth $350 Billion.  

Value a website 

A general rule of thumb for a good website, a quick valuation would be 24-36x the monthly revenue. For example, if your website makes £2,000 per month, a good range for its value would approx be £48,000 to £72,000 depending on your niche.

You do not have to abandon your business principles when attempting to value an online business, subject to the same principle of profit and revenue as any business. However, professionals have developed some reliable shortcuts for valuing online businesses, and you can use these techniques to size up an e-business you want to buy. You also can learn to value your own Internet business in case you want to sell it.

1. Identify the revenue model. Different types of online businesses have different revenue models. Your choices are an information site (no revenue), donation, subscription, advertising, service, lead generation and products. Knowing how the business makes money is vital to understanding it. For example, if a site makes money from advertising, you know you will always be involved in selling ads. A subscription business will require a lot of customer service to maintain a reliable subscription base. Examine the revenue model and decide if that is the correct type of business for you. This will tell you where the money will come from, and you can evaluate whether that model seems viable.

2. Calculate the trailing 12-month revenues. One way professional appraisers value online businesses is by gathering the figures for the last year’s worth of gross income. These revenues should not be averaged; they should be totalled up. You can get these from the balance sheet for the company, though you may have to ask for the most recent month’s revenues if the balance sheet has not been prepared yet.

3. Multiply by a factor of 3 or 6: If the business is a commerce business (it sells products or services) multiply the 12-month trailing revenues by 3. If the company is a content business (supported by advertising or donations), multiply by 6. This is the approximate value of the company. This gives you an excellent figure to start with, and it is helpful for comparing one company to another.

4. Estimate business expenses on an annualized basis. Discount the value of the company according to its expenses. These expenses include advertising, hosting fees, merchant fees, bank fees and administrative expenses. There is no formula for how much one should discount for an online business, base it on your expenses, beware if expenses are within 75 per cent of revenues. Expenses could quickly overtake revenues in a sudden fluctuating inflationary economy.

Getting online starts with you as a person despite the fact it’s already there even if you do not connect via a device of some sort; computer, laptop, tablet, mobile phone, T.V, smartwatch, car screen and any future devices with a digital screen. Otherwise, it is impossible to connect to the internet highway.

The online industry is the future of humanity. Your future is online. 

Today virtually all industries are already set up with online access to theirs.

Be realistic with your evaluation otherwise, people will ignore you – Melvin Mayard  

Summary 

• The online learning industry experiencing massive growth. 
• Selling has only two format processes,
  • Real-world to digital.
  • Real-world to the digital world and back to the real world.
• Websites have value.

                      

ACTIVITY 1.07

 Research which niche of the online market you are planning to operate and write a primary goal.   

Please grade yourself on this section.

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