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Online business automation is not something you truly “experience” until you have reached the end of a specific business development sequence that looks like the one shown below:

Reflection > Decision > Planning > Organising > Setup > Systems Development > Business Automation

Hopefully, by the time you reach the end of this article, you will understand why the stage I refer to as “reflection” is the most important component of the online business automation process.

The “reflection” stage is where you ask the “BIG” questions … the most important questions you will ever ask about your business and about your life, like “why” is it that you want to build an automated online business, “what” automation and having a fully automated online business means to you, “how” much time, effort and money you will commit to achieving your goals, “where” you will conduct your business and “who” you will do business with, and so on.

Let me give you an example, so you can understand how important this process really is …

Let’s start with the end result in mind. Imagine that you now own a fully automated online business … a completely orchestrated “vending machine” that can run 24 hours a day and 7 days a week without you … automatically prospecting for new leads, finding you new customers, guiding them through the sales process, addressing their concerns and objections, delivering their purchases on time and securely, collecting and depositing money from the sales it makes directly into your bank account, and providing not only excellent after sales services, but also making “backend sales” to your existing customers.

Can you imagine it? How does it feel to you? Do you truly believe that you could have a 100%, fully automated online business that does not require you to physically participate in the creation of your ongoing income (once it’s set up, of course!), or does this feel like an “impossible” fantasy to you?

Maybe you can’t, or don’t want to see yourself developing a fully automated online business. Maybe you would be happy if you just reached the stage where you have a profitable online business with efficient systems that DOES require you to be actively running it. If that idea feels more comfortable to you, then that’s absolute fine. Most people cannot imagine themselves making money without being actively involved in the creation of their own income.

In fact, many people I’ve come across who like the idea of earning passive income, only have a somewhat distorted understanding of the concept of residual income. They may have picked up the idea from a network marketing presentation or a real estate investment seminar that residual income is “doing the work once, and getting paid over and over again for their one-time effort.”

While this is a compelling and seductive way to present the concept of passive income - and getting people to sign up to a network marketing company or real estate investing course — it doesn’t get people thinking about what the “whole” concept really means, or the challenges that lay ahead for anyone who decides to actually go ahead and create a passive income stream.

Let me present to you the concept of residual income in a more challenging way.

Residual income, or passive income, is the process of making yourself redundant to the creation of your own income.

Read the above statement again, and allow its full implications to sink in. You will see that there is nothing “easy” or “simple” about making yourself redundant to the creation of your own income. In fact, it is probably one of the hardest challenges you can undertake. When it comes to making money, it is far easier to “step in” to the picture and use your ego, knowledge, skills, charisma, power of persuasion, sales ability, resources and personal experience to “make it happen”, than it is to “step out” of the picture and have systems run everything for you … and do the same or a better job without you!

So, the first question you should ask yourself if you are attracted to the idea of owning an automated online business that can create an ongoing stream of passive income for you is … “why” do you want to do this?

Why do you want to own an automated online business? Why not work in a job where you can get paid well and not have to take home the pressures or responsibilities of ownership? Or, if being your own boss is important, why not just own a traditional business that doesn’t require automation? Like being a doctor, or a plumber, or a professional of some kind?

My guess is that “freedom” is what motivates you the most. In fact, if you are as obsessed as I am about the idea of owning automated online businesses that can generate an ongoing stream of income for you, then your motivation may be a combination of wanting to have both “time freedom” AND “money freedom” in your life.

To have these freedoms be manifested in your life, requires first that you spend a serious amount of time engaged in deep, active, reflection.

The “reflection” period of your online business development is where you become like an “architect”, thinking about every detail of the structure you are about to build, before you actually commit to “blueprinting” your designs and building plans.

For example, let’s address a practical issue as a “business architect” would. How much money do you want your online business to put into your pocket each and every month once it is fully up and running? $1,000, $5,000, $10K, $25K, $250K?

For this example, let’s use the example of $10,000 a month. Why? Because I am guessing that most people would be very happy to stop working and start living if they were earning $10,000 a month “nett” on a consistent basis from an automated business.

The first thing I would do, then, is work out what that means to me in terms of “residual” income. If residual income is money that comes in 24×7 without any effort on my part, then my automated online business has to bring in $10,000 a month x 12 months = $120,000 per year, divided by 365 days = $328.77.

Let’s round this figure to $330 a day. My online business has to generate for me $330 a day “nett” in order for me to earn a monthly “nett” income of $10,000.

$330 a day is equal to earning $13.75 every hour of the night and day. Therefore, the goal would be for the online business to be generating $13.75 in profit for every hour that goes by … whether I’m playing with my kids, watching a movie with my partner, walking the dog in the park, or in bed sleeping.

Okay. Now that we have some figures to work with, we can ask questions like:

- Would I want my business to produce this amount without having to hire employees? In other words, can I build the structure myself and use software and outsourced components to generate this income? By reflecting on this question, you will see that there are different consequences, or outcomes, depending on your answer.

If your goal is to build an automated online business that employs other people as part of your “automation plan”, then you will need to create excellent training systems, not only for training your employees, but also for training the people who manage and train your employees, as well as excellent reporting systems, for making sure that everyone you employ is performing the tasks assigned to their roles.

If your goal is to build an automated online business that does not employ other people, then not only are you going to be relying on software — and perhaps outsourcing the creation of certain materials necessary for the running of your business, but your time will be very limited and so you will need to have a very clear and tight plan for orchestrating all of the systems and components of your business.

Each of the above choices requires a different business development strategy. Too many people make the mistake of thinking along the lines of “let’s just get started and we’ll deal with the problems when they come up.” You may succeed using this approach, but it will come at a significant cost of time and money, as you experience unforeseen delays and obstacles, purchase useless solutions, and run into many other “dead ends” that could be avoided by spending a little more time of the “planning” stages of your business.

Regardless of whichever way you choose to go, the best resource I can recommend you get yourself familiar with first, is Michael E. Gerber’s “E-Myth: Why Most Small Businesses Don’t work And what To Do About It“. You can get a physical copy of the book here - e-Myth Book, or download an audio version of this best-selling business classic here: eMyth Audio Book.

Another question you can ask once you begin the reflection process, is “how many automated vending machines would I need to build to earn my desired income amount?”

For example, one can earn $10,000 a month from just one online business that sells a $37 product on eBay (sell 9 items a day), or a range of products … or 10 online businesses that make $1,000 a month each (like niche affiliate sites) … or 100 web sites that bring in at least $3.30 a day each (e.g. AdSense sites) … or, well, you get the picture!

Finally, another thing you can reflect on, is the quality of the customer service that you will provide. Using an unlimited autoresponder service like AWeber can be extremely useful for educating new prospects, following up with customers after a sale, answering technical questions, creating additional backend sales, sending out regular newsletters, tips and product reviews, etc … Or, you may decide to set up or outsource your customer service to a live customer service or technical support team, depending on your plan.

Hopefully you can see that by investing time upfront into serious reflection about the business you are going to build, you will save yourself a lot of heartache and frustration later on.

So, when does the “Reflection” phase end and the “Decision” process begin? When you have a crystal clear picture of why, what, when, where, and how you are going to build your automated online business … that’s when!

I’ll be adding a lot more articles and information on the process of developing an automated online business. In the meantime, please check out some other articles and resources I’ve written relating to the initial phases of your online business development here:

Business Startup Articles

Develop The Mindset That Can Help You Stop Working IN Your Business And Start Working ON Your Business

Business Systems - Understanding Processes And Procedures

Is Your Business Idea Worth Pursuing?

Raising Business Startup Capital

The Value Of Joining An Online Membership Site

Recommended Resources:

For a low cost, affordable automated home-based online business that is quick and easy to set up, we recommend you look at this: Secret Money Miracle System

If you are interested in setting up automated affiliate eBay stores, here’s an excellent resource: eBay Affiliate Web Site Builder

If you are interested in building an online business in the area of affiliate marketing, here’s an excellent “how-to” manual written by a super affiliate: Day Job Killer