Should You Own an E-Biz?
Maybe You Should Think About This.
You read about the success stories and figure if those two teenagers can make a million on the web, so can you. Sorry, ain’t necessarily so – even if you’ve been in brick-and-mortar retail for a decade or two, the rules are different, the dynamics are different, marketing is different. It’s like comparing apples and applesauce. Sort of the same but not really.
So, here are a few questions to ask yourself before you decide to launch the next Amazon or YouTube. BTW, honesty counts. Don’t fool yourself as you answer, and no, this will not appear on your permanent record.
1. Are you ready to learn a new technology?
Actually a lot of new technologies. For instance, are you wiling to learn how to send out an auto-responder series and what that’s going to cost? Do you know what an auto-responder is??
The commercial web is a vicious, dog-eat-dog marketplace and if you’re going to compete, you’ll have to learn everything from keyword density to content management systems. Are you ready? If so, move on to question number two.
2. Do you have the time to run an online business?
A lot of new site owners picture a site with affiliate links and Google AdWords that magically draws traffic and returns pretty much a nice passive income each month. Ah, if only it worked like that.
But how are you going to get people to your site? They won’t find you on Google or Yahoo. You’ll be listed on page 121 of the search engine results pages so before you see some of that “passive” click-through cash, you have to get traffic to visit your site.
Think you can devote the time to run an online business? You can if you’re retired or a stay-at-home parent, but what if you put in long days at the office? Will you be eager to get to work on your real business – your online business? If your answer is yes, please move on to the next question.
3. Do you have the financial resources to grow an e-business to profitability?
The web is the last bastion for the do-it-yourself entrepreneur. However, there are expenses involved in launching and overseeing a cyberstore. There are web hosting costs, marketing costs (marketing should account for 60% of your initial capital outlay), the cost of inventory, shipping and so on.
You can get started on a shoestring and maintain a website for less than $7.00 a month – and that’s with a web host that offers a full bag of tools and a lot of other freebies (like free domain registration). But once you’ve launched, you have to market and, if you want traction quickly, you’re going to have to spend money to make money, just as you would in any start-up business.
4. Do you have access to support?
‘Cause you’re going to need it, unless you’re already a “behind-the-curtain” online commerce veteran. Sources for support?
Your kid probably knows more about computer security than you do. Your spouse may have a penchant for writing great sales copy. Your neighbor is a techno-whiz. There’s also tons (yes, tons) of information on the web – all free. Hey, reading this isn’t costing you a penny.
If you try to go it alone you may be overwhelmed by the learning curve. While you’re learning about keyword generators you’ll also be learning about content architecture, site navigation, product placement, affiliate programs and on and on.
The point is, you can learn all this stuff quickly – it’s not rocket science – but, at least in the start up phase, put together a list of sources that can support the effort. And don’t forget tech support.
You want access to U.S.-based tech support from your web host (when your server is down you’re out of business), the manufacturers of your business system, whether a single computer in the spare room or an ever-expanding network of work stations, and, of course, you want access to tech support or vendor support from the companies that produce the products you sell.
5. Do you like working with others?
You may be working alone at home but as an e-biz owner you are anything but alone. If you do it right you’ll be contacting wholesalers, drop shippers, customers, tech support personal and on and on.
An online business quickly becomes a part of your social network. You’ll make lots of e-friends and you’ll never be alone – even when you’re alone taking care of baby #2. Scared yet? No? Good for you. We’re almost to the finish line.
6. Do you have patience?
No matter how good you are, no matter how much of an SEO/SEM expert you are, success is almost always an evolutionary process with each new generation or iteration producing better and better results.
That means that you spend a lot of time on webmaster sites and designer blogs learning the minutia that’s now become such an important aspect of your site’s success. If you expect to turn a profit within the first week or two, it’s not going to happen. However, if
you can hang in there and overcome setbacks (all part of the game), your chances for success increase significantly.
7. Are you self-motivated?
When the alarm clock goes off and you’re faced with commuter traffic, you’re motivated – motivated to get to your desk at work on time. Working for someone else provides external motivation. You show up at work on time every day because you have to.
Not so when you run your own business. Sleep ‘til noon. Go see a movie or watch your stories on TV. If you aren’t motivated to get up, grab some coffee and log on in your PJs, you may have trouble getting down to business everyday.
The successful web entrepreneur can’t sleep. Her mind is racing and she’s at the computer at 3:00 AM – and loving it. You’re going to need that level of commitment, that drive and motivation to be one of the web success stories. No matter how many “How to Make a Million Bucks on the Web” books you read, you still need “the right stuff” to pull it off.
You have to be motivated to work long hours, to study new trends in web design (more interactivity, please) and to sit there over another cup of highly caffeinated coffee analyzing your sites metrics.
And you know what? You’re going to love every second of it. Go for it and may success greet you on Digital Boulevard.
A Cash Flow Timetable
There are lots of ways to monetize a site. The easiest for start-ups (that’s who we’re talking to today) is by signing up for affiliate programs that pay you for referrals (checkout www.cj.com) from your site and Google AdWords, a program in which you pay for placement of those little blue links on all of those billions of web pages. Talk about a cash cow! No wonder Google shares keep going up, closing today at $714.19.
Back to reality. Your cash flow timetable will be determined by the success of your marketing efforts. No marketing efforts, no success. There’s just too much competition no matter what you’re selling. So marketing is just part of the deal and always will be.
And again, to market your site is going to take dollars or euros or rupees. The more you can spend each month on marketing (without betting the farm on your site’s success) the better. There are numerous ad placement programs and pay-for-play sites that’ll be happy to link into you. (Important note of caution, here. As far as search engines are concerned, you’re known by the company you keep. If you have 200 low-ranking junk links hooked into your site it doesn’t do a thing to improve the site’s quality in the eyes of search engine spiders.) Go for quality links from the start.
90 days. There’s a number for you. IF you launch, locked and loaded with AdWords ready to fire and affiliate programs set up, AND you aggressively market your site (check out this blog for lots of good advice on site promotion), you could expect to start seeing revenues within 90 days. But again, that assumes you’ve got your drop shipper plugged into your CMS, your navigation accessible to all (even those with poor eyesight and zero computer skills), your AdWords account is set up and funded and you’re looking like a business ready to hit the ground running.
90 days if you do everything right. However, mistakes will be made (you are human, aren’t you?) and glitches will gum up the works so assume a maximum of 180 days before real revenue flows just to be overly cautious (and not run out of $$$ before you even launch).
Do this. You can. And even if you don’t hit a home run, a double that brings in an extra $300 a month isn’t bad. In fact, it sounds pretty good.
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