My first business was a web design company. I quickly learned that this wasn’t a job of designing web sites, but one of selling.

Clients have all kinds of concerns, uncertainties, and doubts standing between them and success. To me, the value of this product was obvious. I quickly bailed and moved on to building internet properties for myself, exclusively.

Its good to be in a business where your clients are practically chasing you down for your product (in my case, that product is traffic.) Chasing after clients can quickly become your core business when your product should be.

The value gap is an important concept in any business venture. Value is a perception that is manifested as a market reality. Would you like a 10 cent click from Adwords or a 1 cent click from ABCSearch? Would you like a $10 shack under a bridge or a $250,000 home in the suburbs?

How do you use the value gap to your advantage?

A combination of knowledge, time, and capital are what allows you to profit off of a value gap. Let me give you some examples:

1. The domain name market. In 1995 a domain invester had two things highly in his favor: knowledge and time. Capital was not so much a requirement as it is now, as knowledge and time are no longer nearly as rare.

The realization of domain name value has created a rapid appreciation in value for the domain owner who purchased his domain in 1995. While no one else may have wanted that domain name for $100 then, today many may wish to pay six figures to own it.

2. The PPC-to-PPC arbitrage market. The time gap is much narrower now. Instead knowledge and capital are the two primary drivers. Knowledge in what steps to complete the process and capital to risk in the event of non-payment.

The domain name market presented an incredible opportunity. However, that was something that took a decade or longer for the value to be recognized. The PPC arbitrage market is another huge opportunity with profits that are realizable almost immediately.

Here are a few steps you specifically can take to ensure that you have the edge in the value gap:

1. Knowledge. Read as much as you can from experts. Put the learned knowledge to the test. Understanding how a market really works is one of the first steps to moving towards the top.

2. Contacts. Have the right contacts within your industry. This ties in with knowledge. Knowing the right people is important. For a web designer this alone can make the difference between sitting at home doing nothing and having more jobs than you can handle.

3. Capital. Have the money ready so when you see an opportunity you can actually do something about it. That means pocketing that bonus instead of making a down payment on a new car. You could also take steps to increase your available credit (credit cards, line of credit.)

You can’t do a whole lot about time other than look forward. I love the domain name market, I believe there are still many undervalued domain names, but I’ve moved on. Why? Because the value gap has narrowed substantially. In some cases, its eroded. As an entrepreneur I need to focus on high-profit margin projects. Because of this, I am working on “whats next.”