investment into new business

[Joop]

a different post re how long it takes for an ecommerce site to take off made me wonder the following.

Our site has been going for a couple of years now but we are still not taking any income out of the company. all our profits are ploughed back into improving the site, marketing and new stock.

It is a profitable site and i'm sure if i didn't do the marketing and improving the site, i could sit back and take a comfortable income but i'm not prepared to do that, and the strategy is always on the bigger picture.

Is this what many of you are doing? Ploughing it all back in with a view to taking over the world?

[shigamoto]

I'm not sure it's what everyone is doing but it's a good approach. I try not to spend it all back into the company though, some of the profits are saved if my company will ever need money or will come up short with money.

I know it's a paranoia approach but I'm just so afraid of borrowing.

[Joop]

i probably didn't word it right. the bank account of the business is good - there's money there if needed - i'm just not taking any of it out as salary.

i need that comfort zone too of knowing that we have the money to cover any emergency costs.

[Essex_boy]

The key phrase there is comfort zone. If it helps you sleep at night your doing the right hthing.

[Deab]

Early days for us - we had our first order in May 04, but only 6 months later did it really start to get going. We wasted a lot of cash on print ads and stock we couldn't sell, but we've learnt and continued to improve our site. The business in now pretty much self sufficient (and showing a paper profit the last couple of months).
We plan to only take a minimal salary for the foreseeable future as we grow the business (probably just my tax free allowance. Growing the business is where the real pay off will come from - we're in this for the long term.

Anyone really looked at how to handle growth? I'd like to outsource all our warehousing and fulfilment when volumes are high enough, rather than grow in to our own premises (all done from home right now). I'd also like to avoid employing any staff.

My dream is to be able to work from anywhere there's a wifi hotspot :)

[Joop]

I now employ two staff, one who works just one day a week and is responsible for our marketing (PR, press releases, magazine placements etc..) and one for 25 hours per week who spends most of her time in order fulfillment and other admin tasks which leaves me with the luxury of having time for growing the business in other ways - affiliates, site improvement etc..

We find that increasing stock is the biggest overhead. We buy 2, sell 2, buy 4, sell 4, buy 8, sell 8 etc.. and continue to do this as the site grows, our customer base grows, our name is out there in magazines etc..

It's hard knowing where to stop!