It is everyone\’s dream to start a business and make it successful. Business ownership has long been considered the holy grail of wealth and independence. While in the past it may have been the privilege of the well-to-do, or the ones who got a loan from the bank, the 21st century brought three distinctively different phenomena. The first is the crash of the banking system and the irresponsible spending of the consumers that made it difficult to get credit. The second is the proliferation of Internet technologies into every segment of society, and the third is the emergence of new business models that were unimaginable before the advent of the Internet. If you told someone 20 or so years ago that software is available for free and it is very powerful, you would have been labelled as crazy.

Let us call the first business model niche software. In the past, software used to be bulky, heavy on the CPU and it took a lot of time to learn how to use it. It quickly turned out that the average user utilized no more than about 5-10% of the capabilities with the other 90-95% sitting in memory and taking up dust. What people really needed was simple bits and pieces of software that did exactly what they needed: nothing more, nothing less, and so niche software was born. A simple example is TechSmith\’s SnagIt. It does what it says: snags part of the screen, annotates it and creates the output in any form you need. Cheap, elegant and it works.

The second important model is called the long-tail model. Web analytics has shown that most of the purchases come from a small percentage, roughly 3-5%, of the traffic leaving the 95% or so, the long tail, as unconvinced, undecided or just browsing visitors. A few companies like Google and Amazon have figured out how to penetrate the long tail with free products like Gmail or heavy discounts and no State taxes. Once the long tail was penetrated, it was time to monetize which brought all sorts of goodies to the savvy business person.

So what do these models have to do with how to start a business for next to nothing? Well, everything. Before we go to the step-by-step how to start process, let us take two simple examples. The first comes from trading (in case you want to start a trading business). Each on-line broker wants to occupy their niche, luring customers with what they want to be known for in the hope that they take the rest of the package. Options Express (OX) is known for its excellent platform and customer service, but trading is a bit pricey. On the other hand Zecco trading has an OK platform and service but one of the cheapest trading costs. So what do you do? Simple, take advantage of the niche: research your stocks on OX and trade at Zecco (there is no minimum balance requirement). Your annual savings: 50% of trading fees!

For the second example let us go to the long tail and pick Google business. For 50 bucks a year you get a business e-mail and all the free stuff you can handle. You want e-mal marketing? No problem, get MailChimp for free up to 2,000 customers. Now, at Aweber this would cost you $29 a month raking up a bill of $348 a year. $50 versus $348 a year is a big difference!

OK, so how to start and run a business for next to nothing:

Start or go on-line. Even the guy who takes care of my lawn knows the advantages (surprisingly, many professionals do not!). He recently cut his office costs to zero by taking electronic and automatic payments. He operates out of his van with a mobile device: no office space, no printer, no invoicing, no secretary, nothing. Just a guy and his best friend: his computer.

Find niche products. Research all the electronic products you need and find companies that provide niche products. These products are either cheap of have free versions. You may be surprised to find that putting together a set of free products can add up to a powerful suite of tools.

Find long-tail companies. Companies that are able to penetrate the long-tail have products and services that are either free or cost very little. Pay a small annual fee and enjoy an arrays of products that are either free or heavily discounted.

What if I need employees? Go global like the big dogs: Apple, Intel and the like. The Internet allows you to do just about anything these major players have been doing for decades. Now, going global is not difficult at all, however, it is not for the novice entrepreneur.

Author Bio: Krung Thep writes about Internet based solutions and business modeling using web based technologies. For more details please visit http://www.myibusiness-solutions.com/.

Category: Business
Keywords: starting a business, web based business solutions, niche software, long-tail business model