Forum Moderators: LifeinAsia
I have a widget site where i custom build widgets from my workshop behind my home and that business has taken off. Im a one man operation so I cant answer the phone to take sales calls, customer service has dropped a bit and im finding myself getting swamped and losing business and floundering because of it.
I also build websites and they have also developed over the years and im slowly starting to make good money via adsense, cj, YPN and other advertising means. Sales from the widget site are going to be around 200k this year but i have a small profit margin and the work to make the widgets is semi time consuming but the business and traffic and sales have doubled since last year so the business model is working and making + cashflow.
My question is should I do what i know the widget business needs and expand out of the house get a small warehouse/office hire a sec to field calls and offer cust. service and hire 1 shipper/reciever to grow the business or should i downsize and maybe find a more automated less time consuming way to operate the widget business so i can focus on developing more websites with an easier income stream?
There are a couple options i could do but would be less profitable, i could probably do an affiliate deal and send my widget sales elsewhere or i could turn the widget site that gets good traffic into a widget portal and sell adspace..
Im sure i could get an sba loan for the office/workers but is it worth all the overhead im wondering. I have always been a positive cashflow never in the hole operation and i think thats what is causing me the hesitation for the jump to bigger things.
Any input is greatly appreciated. Thanks.
First of all you need to see which one is making more money for you and which gives you more satisfaction. The Money answer will tell you what you need to prioritise on and the satisfaction answer will give you the stuff you can do when you are not doing things to make money.
The sites that you are making for CJ, YPN or adsense do not need a person to answer phone, online support should be the primary means of having your customers contact you.
Does your widgets business needs that immediate reply via phone, or will online support suffice? If the problem is not an emergency I would suggest you promote the online medium as the primary means to contact your company for support.
A better option for online support would be to use an online helpdesk where your customers can login and open a support ticket which you can reply to. Helps tremendously in seeing what problems are faced frequently and can be used for product development or an FAQ.
Another advantage is departments! You can have departments in your Helpdesk application and then if you really do hire a person, then you can give them access to those depts to handle those queries.
Your customers will never know whether you are a one-man or 1000-man operation.
Expanding out of your house, will really depend on how much time you want to give to your business. Home businesses are convenient but are a hell to schedule. Household emergencies will keep on interrupting you.
You will almost certainly see an increase in productivity in a dedicated workshop/office. The question you need to ask yourself is whether that office fits into your cashflow? Today at 200K you worry about hiring a person, having an office will mean electricity/phone/rent and other expenses associated with it.
Do your gains outweigh the costs? If yes then go ahead and expand!
Should you downsize? Invariably downsizing will mean that your revenue will decrease from that stream. If it ain't broke why fix it? Downsizing is ok if you are in the red, but then that is called curtailing your losses.
To sum up, you should find a person to whom you can delegate some of the things that you do, in management speak it is called getting your systems in place.
Once you get your system in place then it is just a matter of teaching that system to a person (barring trade secrets ofcourse!) and then going off to build another system in another revenue stream, get that working and going off again!
The point is to make yourself dispensable from the running of the business and getting into the creative side. Then you can simply hire people to run your business, while you dream up more creative (& ethical) ways to make more money....
Too many order/support calls + Low profit margin = Raise prices
Then cut your 'shop' hours so you can answer the phone at certain hours, and publish those hours.
ashishp's FAQ suggestion is also a really good idea.
Jim
Im a couple days away from my P&L year report which will give me an pinpoint accurate gauge as to what made what amount this year so that will also help me decide which direction to go.
Once again thanks for the input!
