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Let’s “cut to the chase”.  Review the following diagram of the responsibilities of your average internet information marketer / small business owner:

And now review the organization chart of your average small business owner:

This courtesy of Rich Shefren and the Internet Business Manifesto (read his report, it’s one of the best business papers I have ever read).

But before you go slit you wrists over the problems that your average internet marketer and solo entrepreneur faces, let’s drill-down a bit deeper.

For background info let me first summarize some of the key points made by Rich Shefren:

• Most entrepreneurs and internet marketers are opportunistic (looking for “the next shiny thing”) rather than strategic (“plan your work and work your plan”).  This may be part of the reason that the majority of aspiring entrepreneurs and internet marketers will fail to achieve their dreams even if they buy lots of products, study them religiously and work extremely hard.
• Big business always beats out small business eventually (saturates the market).  This is the other reason that small businesses fail. However, fortunately, we are still in the “gold rush” era of new internet business (because the available niches are so numerous).  Opportunities are available, but more are closing every day.  Conclusion: if you don’t plan to dominate your niche from the start, you will likely fail.
• The only way that it’s possible for a solo entrepreneur to manage the task complexity and organization chart above is to collaborate and/or outsource. However, most entrepreneurs are poor outsourcers and project managers (third reason businesses fail – I have experienced this myself).  Effective outsourcing is not about finding the cheapest provider.
• Figure out the number of “productive” hours you have in a day – and then try and maximize. Rich defines “productive hours” as hours spent on high-return activities.  High-return activites for an internet marketer are: product development, marketing, and creating systems.  Rich estimates that the average person spends less than 2 hours a day on this (if that). The rest of the time is spent answering email etc – these are necessary tasks but they are not high-return, high-leverage activities.  You must carve out time for high-leverage activities. Eben Pagen in the Guru Blueprint Home Study Course says the same thing (and if Eben Pagan says it, I listen).

A further distinction: the types of internet business

Not everyone aspires to earn a full-time income from the internet (if you haven’t fully committed to it yet, walk out there is still time – kidding kidding, but only half).  In my work as a web designer and internet marketing consultant I see people at various levels of internet business development.  Understanding these is also key, as they require different strategy and have different degree of potential.

Types of internet business (in increasing order of difficulty to create and manage):

1. People with an existing, on-the-ground service business or physical-products business who want to promote it and increase their income via the internet.
2. People with a new, on-the-ground service business or physical-products business who want to use the internet as their primary marketing
3. People with an information product who want to use the internet as their primary marketing.  This include affiliate marketers (although I would not recommend this as it is also a very saturated market).

For example, the WordPress Academy course curriculum can be applied with very good effect to businesses at tiers 1 and 2.  Don’t give up on internet marketing just because you are not able to master every element of internet product development and marketing.

Now Rich Shefren’s analysis applies primarily to people at tier 3 (internet information marketers such as myself).  Bear in mind that creating a new, successful information product business is much more difficult than promoting an existing service business, or in starting a new service business via the internet.  So start by creating a successful service business.  If that works, then go on and make an information product out of it.

This being said, most beginning internet marketers simply don’t understand the complexity and the amount of work involved in being successful online.  It’s taken me 6 years to really grasp this myself.  I am a slow learner, but I was also deceived by the internet marketing industry and the “next shiny thing” philosophy that is rampant.

My final advice to members of Lifestyle Design School and aspiring internet marketers

1. If you have or want a first- or second-tier internet business (see above) – get yourself a site and invest 10-20 hours in marketing it.  This is a no-brainer, seriously.
2. If you want to create a third-tier internet business (internet information product), seriously consider whether you are really cut-out to be an entrepreneur.  For a very personal perspective on this see the article Do you want to become financially independent?.  Lesson learned: your greatest asset is self-awareness (understanding your limitations and personal biases / blind spots)
3. Understand that regardless of the above, you are going to need to collaborate with other people and find good employees and partners.  Otherwise your lunch will get eaten by a bigger and better competitor – often after you have invested years of effort.
4. Understand that if you can’t carve out time for high-leverage activities, nothing you do will succeed.  This is why I am starting off the year with Eben Pagan’s Wake Up Productive program.

That’s all for now – happy new year and wishing you all a fantastic 2011.

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Bob,

Yes I agree that to do social media well is an art. I teach people to at least set up their profiles and integrate their blogs, which only takes a few hours, but I don't teach advanced social media strategies. Do you feel like giving a webinar to the group?

Brian,

Yes good point "why are you in business"

Rich Shefren doesn't say that big business always wins, he says the best product in the niche will crowd out the others until there are only one or two left. There are always niches to enter and some niches are so diverse that it's not possible for anyone to dominate. I do Ok in my niche (WordPress training) even though it's a very big one