A New Series on Business Startups — Part 9

Many people dream of quitting their day job and starting their own business on the internet. It seems simple enough, doesn’t it : working from home, low costs and boss of your own time?

But what about the technical side, the long lead-in to a decent income, and the flakiness of many internet projects?

John Evans, boss of Syntagma Media, has given an interview about the trials of creating an online content business to Gerry Reynolds, business consultant and retail analyst.

Here’s a preview :

Gerry : What are the economics of an online income stream? […]

John : If you set no upper limits, you’re really at the mercy of events. It’s no good having a $10m business if your costs are $11m. Mr Micawber defined that problem 150 years ago.

The trick is to set an upper boundary that gives you the best split between receipts and obligations, building in the vagaries of the tax system, of course, and depending on the amount of effort you can comfortably provide. Everyone will reach a different conclusion, but it has to be within your comfort zone. You are, after all, in this for the long haul.

Gerry : So you’ll not be selling the business?

John : I’ve personalized the business so much, it’s hard to see who would buy it now. But the idea of creating an empty shell of a company, with no branding, so that anyone can buy it, just isn’t how I do things. I’ve always preferred chocolates to boxes.

Read both posts here : #

Jamie Murray Wells, 24, Old Harrovian friend of Prince William and Kate Middleton, sells glasses on the internet at one-tenth of the price they retail in the High Street.

So successful has his business become that he has attracted £3million ($6m) of venture capital funding. His next plan is to take on the lucrative American market

Jamie started out with only his student loan, and some help from his father, who is also an entrepreneur. Simon is an investment analyst, while his mother, Alison, buys up cottages for holiday renting and, for good measure, imports local products from Morocco. His maternal grandfather, Wendall Clough, helped bring Ford and Chrysler to Britain.

In the past few years, Jamie has gone head-to-head with High Street giants like Specsavers and Vision Express for dominance of Britain’s multi-billion-pound glasses market.

He says, “We currently sell 300 to 400 pairs a day. This injection of cash means we could be selling thousands.”

Enterprising he may be, cheeky he certainly is. He recently bombarded Newcastle city centre with men in sheep costumes implying the High Street was “fleecing” consumers. “I love the fact that this business is causing trouble,” he says. “At school I used to behave terribly. Even at university I’d do things like make the campus Christmas tree disappear, watch the uproar and then mysteriously return it.”

Glasses Direct was conceived while he was reading for his final exams at the University of the West of England in Bristol. He set up the website after he discovered the huge cost of spectacles on the High Street, although they cost as little as £7 to make.

He remarks, “I would walk out of the examination room and go straight to the library to use the computers for my business. What gives me kicks is bringing something new into the world. I’m not into starting up just another optician. I want a market-changing business.”

Jamie employs 30 staff in Wiltshire, England and is recruiting for a new London office. Turnover is predicted to rise to £10million by 2008.

A New Series on Business Startups — Part 7

As well as considering how to start a business in various parts of the world, we will also be inserting in this series ideas for unusual businesses that you may not have thought of. For example, what about a business that runs itself with little input from yourself? Impossible? No, not on the internet.

How to create that online money-spinner that works automatically, even when you sleep, is a question often asked. One solution — rather an oldish one — is affiliate marketing.

Essentially, this is signing up as an affiliate with websites selling products or services off the sites. When anyone clicks over from your site, a “cookie” (a little scrap of software identifying you) registers on their site and persists for a set number of days, often 30. Anytime they go back and buy something within that period, you will be entitled to a percentage of the price paid. This may vary from 4 percent on the Amazon Associates scheme, to a bumper 50pc for selling an eproduct, like an ebook or ecourse.

Quite often you’ll find an “Affiliates” link in the footer on retail and other websites. An alternative is to use a mass affiliation scheme like Commission Junction or Tradedoubler, where you can choose from a large range of schemes from crafts to credit cards.

So long as the product or service matches the subject of your site, you should be able to make a start.

Many of the early Internet marketers started out on affiliate schemes. Some became millionaires quite quickly, by first making a success of what they did, then selling their own ebooks on how they did it.

The secret is to presell the product on your site before the client clicks through to the seller’s site. That way they are much more inclined to buy.

From there, it’s a numbers game. The more traffic your site generates, the more likely you are to get sales. That early lesson made serious affiliate marketers become experts in SEO — search-engine optimization — whereby the site figures prominently in Google and other search results for certain keywords.

An understanding of the keywords searched for for each product is also necessary to do well from this process. There are keyword aids available free on the net.

Affiliate marketing can be tough if you go about it the wrong way. But with hard work and a shrewd eye for a chance, you could do very well at it.

SEO
People make whole careers out of advising on how to get websites to feature prominently on search engines such as Google. The process is called search engine optimization, but it doesn’t need to be complicated.

Duncan Jennings started his first website when he was 17. At 24, now owns www.econversions.com. He says :

“All websites want to appear at the top of the list when someone searches on Google. In response to a search, Google will take all the websites that are relevant and rank them according to the number and quality of other sites that have linked to them. If you can get links to your site on lots of others, you will be ranked higher and you will get more traffic. It builds from there.”

If you want a business that costs next to nothing and will run itself once you put it in place, affiliate marketing is a good one to consider.

You can also combine it with onsite advertising, like Google’s Adsense, to add value to your site’s content.

Readers of Small Business Booster may be interested in a piece over on Syntagma taking up Timothy Ferriss’s idea of a “low information diet” to boost personal productivity and quality of output :

The problem is, information makes us feel important, connected, in league with “where it’s at”. If we don’t get any, we’re sure to look inadequate at the XYZ Conference. We never stop to think that the XYZ Conference is just another vehicle for more useless information, as is that so-vital podcast, video hookup or blog post (present post excepted because of its essential nature).

Ferriss’s chapter with the same title as this post is the best eight-page sequence in his book. Alone it will change your life. If you’re a Techmeme groupie or a news junkie — as I used to be — read it and learn about “selective ignorance” and the trial one-week media fast.

Read the whole article here.