Business Models for Starting a FREE Business Online

When it comes to starting a business online 99% of people expect everything to be free (thanks google…). In this post I will briefly go over the two popular business models for starting a ’FREE’ business online and how to convert free into dollars and cents.

1. Advertisement Driven Business

If you can produce content or a product that will get a lot of people to view or use with a minimal cost start up then advertisement is the route to go. Think of it as every person who reads or uses your product converts over to $1 a year (this person will probably consist of 100 or so visits a year, so the $1 is NOT equal to a visit but the impact one person will have). A great way to start advertising is to use Googles AdSense it allows you to quickly place ads around your content. The down side is that you have to share the revenue with Google. The other alternative (after you have a proven base roughly 30-60k views a month) is to venture out and find company’s that would benefit from your target audience. Look at competitor’s sites/blogs and see what company’s are advertising on their sites and contact them (and like companies). There are different variations on advertising online IE: Pay-Per-Click, Per-Impression… but I don’t want to go into those. I simply want to convey that if you build it, and they come… Toss some ads on there if you’re looking for some dollars and cents.

2. Premium Product

Another way of producing money, but also offering a free product is to have a stripped down version of your final product. IE: Only let people read half of your eBook, If its an image sharing site only allow free users to upload 10 images and where the premium (paid) version allows people access to the entire product/system. This is a good way to hook them in with the free version, and then show off the benefits they’re missing without the premium version. You could also put ads in the ‘free’ version and no ads in the premium version. There are a lot of ways to play with this model.

The difference between offering something for FREE and offering it for .01 is HUGE. People don’t have to think; don’t have to pull out their credit card… If all people have o do it click to use/view your product then you will start a base that you can then tailor to you ultimate goal > $$.