This past week Megan Hughes and I put on a FREE webinar “IRS Tax Secrets for Online Business.” Even though I thought I was pretty clear this was about the tax advantages and asset protection strategies for online businesses, I still got some questions from people about how to make money online.

I’ve been online since 2000, and in that time I have made multiple millions of dollars online. And there are guys I know who make a whole lot more than I do online. It’s tempting to jump into an online business. It’s cheap. It’s fast. And there are plenty of get rich quick and lazy stories about online businesses.

So rather than tell you how to do it, let me tell you the five biggest mistakes that I’ve made or I’ve seen others make.

#5 Mistake: Not working the list.

This was my big mistake that I corrected this past year. I had a list, but I didn’t work it. In other words, I would put on a webinar and give out information. And that would be the end of it. The webinar would take me several hours to research and prepare and then giving it was another hour. But it was all wasted time because I didn’t follow up.

I had a list that was segregated by interest, but I just sent everybody the same information. In other words, if you told me you wanted to know about real estate tax savings, I’d send you everything – online business tax tips, asset protection for business, you name it. When in reality, I know you care most about real estate and that’s what I should have been focusing on.

Now I set up automatic alerts that tell me who has been on a webinar, who has expressed interest and about what. That way I can send out just the information to the people who care about it. My income shot up because I was talking to people about what they wanted to know about.

# 4: No conversion.

Let’s say you’re successful at getting people to come visit your site with your interesting articles or fun things to do. But then, that’s the end of it. They come, they leave. If they never join your opt-in list or never buy anything, it’s a waste of time.

#3 No traffic.

What’s worse then no conversion from people who visit your site? No traffic! If nobody is visiting your site, then you’re wasting your time. You need SEO (search engine optimization.)

Make sure you content is relevant. You need to post frequently (at least once a day). You use long tail key words (LTKW) that identify what people are searching for. Use social media to get people to your site and your articles.

It’s all about traffic. Nothing else happens without that.

#2 Never start.

Of course, nothing happens if you never put it in motion. If you don’t start, or just make a half effort at commitment, you won’t get good results.

#1 Starting a site without a product, service or profit.

The number one problem is no business. I see people start a website without a clue on how they are going to make money. They view the blog as a way to connect with the world, a way to express what they’re feeling, indulge a habit or just generally shout into the darkness.

That’s all great. But it’s not a business. A business needs profit and that means you’re selling, directly or indirectly, a product or service.