Learn From My Mistakes When Starting an Online Business and Save Money!
I’m ashamed to admit it, but before I started eCoaches.com, I was totally unprepared for the two year journey that was about to start. In this blog, I’m going to lay out some issues that arose during that period, and how I managed to overcome them (but not after losing a ton of money). This information would have been tremendously valuable to me before I started, so I hope you can use it to your advantage before you start.
1. Choosing a domain name
Choosing a domain name is obviously one of the most important decisions you’re going to make. You need to think long and hard about a range of names that are attainable and represent what you have to offer. Make sure to have a clear understanding of what your business objectives are before you start! These will need to be reflected in your name. My advice to you is start this process before anything else.
Remember that there are a variety of things to consider before finalising your domain name. PLEASE consider the following…
Is your domain name available?
You’d be surprised by the names domains that are already taken—believe me! If you’ve never been through this process then you’re definitely ignorant of what will actually be available then you go to purchase your domain. This is why I say you need to do this first!
Is your domain name succinct enough?
You preferably want a short domain name that’s easy to remember. You don’t want to make it anything tricky that’s hard to type or remember—keep it simple and relevant!
Do not use numbers or hyphens!
This was a mistake I originally made. I purchased a few domains that used numbers and hyphens so that I could obtain the names I wanted. It was a mistake that I quickly realised after doing a little bit of research. I, obviously however, didn’t realise it quick enough to save the money I spent on the useless domains!
Choose the appropriate domain extension
Another mistake I made was to try and avoid .com in order to attain the domain name I wanted. I was quickly warned off of this by my developers who assured me for the purposes of my site I’d need a .com. They couldn’t have been more right. Once again, I was uninformed before making these decisions and it led to me wasting money.
PLEASE also consider this last point… It’s something that NO-ONE ever talks about, and something that EVERYONE needs to consider!
Can you obtain your domain name on social media channels?!
This is something that I was unbelievably lucky in. You cannot believe how lucky I was to get @eCoaches as a Twitter handle! Someone had created it in 2009 and not used it since. Out of desperation (I had already purchased the domain name without considering this step), I contacted the owner over Twitter. Not thinking I’d ever receive a reply from an unused account, I began looking for alternatives (totally unappealing). Luckily for me, the owner replied and offered it to me for free with no strings attached. If someone more unscrupulous had owned the account, I could have lost a lot more money (which I would have not-so-gladly paid). If you take nothing else away from this blog, please take this!
2. Build a thorough blueprint of your site
Something that I failed to do was create a thorough blueprint of the site I wanted made. My developers found this extremely frustrating and things got messy as a result. We went over time by six months and over budget by $30,000. You NEED to create a blueprint of every page of the site, and every function therein. Without this, you’ll be left spending paid hours working out all of the little 1 percenters which can add up to six months paid time (believe me). Work it out yourself BEFORE you take it to your developers! Save yourself a bucket load of money.
3. Find the right developers
Being in Australia, wages for developers are quite high. You have your choice: hire local developers for more money where you can communicate easier and have more accountability; or hire overseas developers for less money where communication is a little harder and accountability is definitely lower.
This was one area where I believe I made the right decision. I chose to hire locally so that I could have more communication and more accountability. The risk vs reward of hiring overseas is that you can save yourself anywhere from 50%-80% of your money, but you could end up with nothing. When you’re talking about an amount over $100,000, the decision becomes very hard. This is because you can save a hell of a lot of money by going overseas, but you can also spend a hell of a lot of money on nothing. If your business is your dream and you truly believe in it, like I do, then spending more to get it started is probably the more prudent option. After it’s been developed and you’ve got it off the ground, then start looking to save money by moving your development costs overseas.
4. Prepare your capital, know your budget, and prepare for the worst!
I didn’t prepare my capital for eCoaches before we started. In hindsight, this was insane. We got half way into development and I hadn’t even organized my business loan! Absolutely insane!
This was an area that I got extremely fortunate in. My father was in the process of purchasing his first house. I was able to piggyback on his loan by obtaining a split-loan. This means I received my business loan, but at mortgage rates. If I was unable to find this money, everything I had already put in would have become a sunk cost and the business would have gone under before it started. Never make this mistake, prepare your capital!
Before you even prepare your start-up capital, you need to budget for post-launch costs. You need to be aware that not of all of the costs involved in running an online business are limited to hosting fees. For most of us, you’ll have a marketing team, marketing costs (SEO & SEM), maybe a blogger, continued development, etc. These costs add up quickly, so budget for them and prepare for them to blow out, because they will!
5. Plan for marketing
Traffic does not come to you, believe me! I could not have been more ignorant of marketing before I started eCoaches. I believed that if you created a cool website with great utility for everyone involved, then traffic would come to you. HA! This couldn’t be further from the truth. Obviously some websites get lucky and have exponential growth out of the gate, but those cases are extremely rare, and most online businesses fail. It’s a scary fact, but one that we all have to face at launch with 0 traffic. It takes work, and you need a plan.
My advice? Make sure to build in a blogging engine! This was a tool that I added after the fact, but one that has proven to be the most valuable. It’s a great way to engage your audience and provide them with some free advice that organically drives traffic without being too salesy. Adding this in late cost me time and money. I needed to catch up on all of the blogs I could have written during my downtime, and adding the engine in late meant we had to go back and modify parts of the site that had already been written.
6. Do your own research and make your own decisions
This is a tricky one. When you’re starting an online business for the first time, you rely on advice from those with years of experience. However, sometimes what works for one person may not work for another. I definitely wasted a lot of money implementing advice and being lazy, rather than doing the hard yards, doing my own research and making my own decisions. Sometimes you just have to go with your gut. I was far more successful on the times where I made my own decisions than when I went with the recommendations of others.
7. Be careful with a pre-launch site
Pre-launch sites are said to be essential for upcoming online businesses. The problem with pre-launch sites is that you need to get everything perfect, especially the timing. It’s not cheap to get a pre-launch site going, and the payoff can be rather low. If you mistime the launch of your site, then all of the money you spent on the pre-launch site is down the drain. This is what happened to me.
Unfortunately, with pre-launch sites, you need to launch them anywhere from two to six weeks before your actual launch. Any longer than this and people lose interest completely. We knew this going in, and still failed to meet the deadline. The result? Virtually no follow-throughs on registered interest post-launch. Money wasted on setting up and marketing? Around $10,000.
Would you like to contribue to this discussion? Tweet us @eCoaches with your own experiences and we'll add it to this list!