Forum Moderators: LifeinAsia
I have website that I started as a hobby about a year ago and it has since been slowly but surley picking up traffic as well as some pocket change through adsense. I've been considering moving to the next level which requires some big bucks spending in marketting. My question is how do I approach this? do I make a business plan and go to a vc firm? do I look for friends and family to give me loans? etc.
I would be really interested to hear for others who have gone through such a transition and can provide me with some advice.
thank you
A few questions:
1) Can you quantify "pocket change" and "big bucks" better? To me, "pocket change" means less than a couple of bucks per day and "big bucks" would be along the lines of my mortgage.
2) Are you thinking about basing your entire business idea around AdSense? If so, please read the numerous postings in the AdSense forum, ranging from "I've been banned from AdSense" to "My AdSense earnings are down" to "Why doesn't my arbitrage scheme make me money?"
A few sugegstions:
1) Talk to other people about starting a business, preferably people who have already done it and are in a similar business line. If you're in the U.S. make an appointment with a SCORE counselor (although I've found many of them don't have a good background for online business). Get a good reality check from them that your "can't lose" plan isn't really just pie in the sky.
2) Make sure you have a good backup of cash- poor cash flow is what kills most businesses. Especially if you've brought in "big bucks" from VC or other investors, there is a tendency to spend it like a drunken sailor with (unrealistic) expecations that more money will appear tomorrow. Take a recent history lesson and review the .COMs of the late 90s who had millions of VC money and are now no longer.
3) Adopt the perspective of making this a business, not just running a web site. A business is much, much more than just an idea.
By the way, these questions/suggestions come from one who has been there/done that. I quit my cushy day job to take my personal web site to the next level. It was making a bit more than pocket change at the time, so I had wonderful visions of how much I could make doing it full time. Yeah, we're still around, but we bled money for years. And there were several points where shutting it down and cutting our losses looked like the smartest idea. (Luckily, I wasn't that "smart" at those points. :) )
Keep building it as this is one of the best ways to stay ahead in another year you may be were you don't need a loan etc.
Loans are ok but can be a loop around the neck as well. I say keep doing what you are doing study up on marketing and save the money You can do it just as good as anybody else.
First up....you should have a business plan regardless of how you proceed IMHO!
Second up...never look for loans. Family.....your Dad should be your first and last resort....never look to any others! And make every effort not to look at your Dad for money!
If you can't make a profit on your own then why do you want outside investors? I'm sorry, but, you have to be able to cut a profit on your own!
For the occasional few there can be an ideal need for a huge amount of capital expansion....that is very, very rare, and usually common banks will provide it.
If you are "certain" secure the loan against your assets.....not something I'd ever do!
You have to grow a business. At each stage you will learn more. Attempting to jump from step 1 to step 11 is not likely to work!
Banks like people who make slow, gradual and measurable progression.....and those folks that achieve, usually also hate banks!
Yeah, banks are bad if your profit is much less than what you return back to banks. I'd very bitter experience with banks.
I hope, if idea is unique, backed by powerful concept and fortune favors, you might get good financiers. You may talk to colleagues, friends ( and may be with your employers ), in case your family unable to fund you.
it can cause bad feelings that will linger for years.
Most of us just gut it out and build our sites bit by bit till it
eventually pays off. Thats the beauty of the INTERNET business
model it just doesn't take a lot of cash, just a good idea and
some hard work! Good luck!
Got for free resources, SCORE, other small business groups, local Internet or non Internet marketing associations.
Cash flow can definitely be an issue and credit cards can usually fit the bill there. I.E. if you are spending 20K a month and getting 40K back, you need to be able to float some serious $$$ for a while. 0% credit offers are out there as well as 0% balance transfers.
Get one good rewards card, find another with 0% for 12 months. Have the 0% card send the rewards card as much money as possible or as much as you need to borrow for a while (even if the rewards card has no balance on it) and they you'll be able to charge at 0% for a while. Of course check the details and make sure the balance transfer fees are relatively low or capped and the rewards card will take a payment when there is no balance on it. There is lots of stuff you can do with credit cards to get cash for up to a year while paying little if any interest.
