Successfully building a business around a product is a wholly separate area of expertise, not something that you kind of pick-up as you release it. Yet that’s something I very much did with CustomBar, a terrific piece of productivity software that I devoted the larger portion of 2 years of my life to developing. I was very much a software geek first and business man a distant second, consequently making many of the same mistakes as hundreds of other shareware authors. The result was making only 10% of the profit that the software could have made (a very conservative estimate).

The initial launch did fairly well and my inbox filled with sales. This is also the only time where I really thought about the marketing and spent serious time putting things together. However I lacked the knowledge that I needed to build something that would continue to grow and receive attention long after the last news article on a popular software site had sunk to the bottom.

Two years is a long time to invest in a product when you end up making a grocery list of amateur mistakes when finally selling the thing. Yet that’s one of the reasons the business start-up failure rate is so incredibly high; I was the rule and not the exception. I was very strong in a technical skill (programming in this case), had a great product idea, but not nearly enough business knowledge to make it viable.

If you are the brains behind the world’s next big mouse trap then learn from these mistakes. It’s not easy to come up with a viable business model and strategy to execute it. Top CEOs of billion dollar companies get it wrong all the time, and surely they must have a little bit more experience than simply picking-up a marketing book. Aquiring a combination of experience and knowledge will put you light years ahead of the inventors out there that dived right in. If your Big Idea will still be there in a year or two perhaps it’s best to try a smaller business first? If you don’t yet have a Big Idea then there is even more reason to start a smaller business now, as you will have the necessary experience when you do have that Idea.

Inevitably the next question that has come up in most readers minds is “but what other business could I possibly start?”. Believe it or not, you don’t need to create something new and revolutionary to launch a company and start making (or losing) money. That’s actually a very risky path compared to taking an existing product or service and simply doing a great job of providing it. Businesses that tend to be inexpensive to start are those that do not require a large investment in materials or commercial location. Digital products work well, such as software, ebooks, online courses, web services and so on. The internet also happens to be a fantastic way to get experience in marketing strategies as investment is generally low and you can accurately measure results within days instead of months. If that’s not your fancy do not worry. You can take advantage of virtually any real skill, and the less formal education it requires the better for you (it is much easier to start a landscaping business than a biotech company).

One catch is that you do have to put serious effort into the business and want it to succeed. You are starting small so that later on you have the foundation to go big. It may even be that you succeed on your first try and want to continue developing the business. My own primary business, which I plan to grow and expand for many years to come, started out as a side web hosting venture years ago by another name. You won’t get anywhere putting in a half-hearted effort into something, and you won’t learn a whole heck of a lot either.

If all that you do is Build It, the only customer will be your mom.

You want your dream to succeed. Maybe it’s a great piece of software that you are putting every bit of effort into after 8 hours of database programming in some dull cubicle (if that’s the case read this legal issue). Maybe it’s a music school you’ve been sketching plans for while finishing your degree. Maybe it’s a $29.95 product that will be sold in retail stores across the country if you can just convince them that people will buy in droves. Great products are created by people specializing in the related field, not by armies of people in suits and ties (those guys are all managers and accountants working for someone else). You don’t necessarily need a business degree to succeed in running a company. However don’t let yourself stumble so hard that the fall kills you just because you’ve never navigated terrain like this before. Aquire all the business knowledge that you can for your new company, either by getting some experience launching a smaller venture first or by finding a partner who has done it.

What happens with CustomBar you ask? It gets a new 1.1 release in Winter, accompanied by major fixes to the business model (which is where the delays on the update actually come from). That’s the first block of time I will have since Tilted Pixel’s launch in September to revisit things and get it moving again. In the meantime sales continue to trickle in, but at a much slower rate than I would ever be willing to find acceptable.

Last week I finally received papers stating that I now own my very own corporation (federally registered in Canada)! Tilted Pixel Inc. is now my 100% owned-by-me corporate baby. As you can probably tell by the reduced posting frequency I’ve been working extra hard to pull together everything related to that while keeping up with the ever-increasing work queue.

Incorporation of the company represents a bit of a graduation ceremony from a small business idea to a serious commitment and a validated business model. Less than a year ago I had a registered sole proprietorship, business cards, a single client, and three oversized photo prints with the company logo (for “exhibitions”). I now have three website projects on the go at any given moment and a solid plan for expanding the company further and further. Keeping the business profitable and growing has been a matter of applying what I’ve learned in my previous ventures and sticking to the fundamentals of building the business one solid block at a time.

What makes Tilted Pixel work? It’s actually a very simple concept, albiet shockingly ignored in the website development world. Tilted Pixel delivers what clients ask for with websites that are built to spec and can be edited by the client rather than requiring the web developer. I’ve invested the past three years into a terrific website development architecture custom built exactly to deliver on this promise. It would have been easier in the beginning to use an off-the-shelf solution, but had I gone this route I would have lost control over the services and capabilities that I am able to offer my clients. The software would have ruled the company. With my architecture I never have to feel restricted since even if a capability is not there I know it can be created.

I’m basically tooting my own horn in this post but this milestone is tremendously important to me and something that I feel like sharing with all my readers Feel free to post stories of your own business start-up achievements in the comments!

These days nearly every business has a website, and those that don’t have at least thought about it. Google is very quickly replacing the Yellow Pages as the first place to hunt for information about a company and customers are starting to find it odd if your business does not have a website.

The website has tremendous advantages over traditional advertising. It is your 24/7 salesperson that delivers the message perfectly every single time, can be instantly changed at a whim, and can store as much company and product information as your potential clients care to view. It is also a 24/7 support center, lead capture, hyper cost-effective storefront, traffic analyzer, survey tool, and much more. Yet time and time I encounter people who have only one burning question…

“If a Website is so Great, Why the Hell am I Losing Money on this Thing?”

As a website developer I am constantly facing the challenge of providing my business clients with website solutions that generate a positive Return On Investment. Simply building a website and tossing it online, no matter how complex and e-commerce enabled it is, does not money make. Yet many business owners think exactly this, and experience has taught me to never develop a website for somebody who I cannot steer away from this mentality.

Just like a profitable business, a successful site needs a plan. At the heart of this plan is your desired outcome, which will shape what you put on the site, how much you’ll spend on development, and what kind of marketing you will do. Here are just some of the motives a business may have for starting a website:

Modern “Yellow Pages Ad”: a business may simply want to take advantage of the inexpensive and rich internet format to present potential clients with basic business information. These kinds of sites tend to have basic information about the business, store hours, and contact information. Traffic may come from local business listings (like the Chamber of Commerce or Google Maps) and advertising that the business itself puts out (flyers, business cards, etc). There is nothing wrong with having a site this simple, particularly in a brick and motar industry.

Online Marketing: this is a much more serious version of the Yellow Pages ad. Rather than simply using the website as an informational resource for people who want to know more about the company, the purpose here is to actually attract new customers from internet sources. Traffic will come from whatever online marketing methods you succeed at, such as banner ads, search engines, PPC ads, product-related websites, media sites, blogs, etc. It’s really important to have someone experienced in online marketing developing this kind of website; many business owners make the mistake of finding a web developer with no marketing experience (mistake #1), dictating to them what the website should have (mistake #2), and then wondering how they spent so much money with revenue to show for it. Bonus mistake points for not even attempting online marketing.

Existing Customer Support: many smaller businesses omit this very important opportunity to keep clients happy while selling more to this highly receptive group. A “customer support” site can mean very different things. It can be a place for clients to receive the latest updates or documentation for your product, it can offer an actual help ticket system, or it can be a place where clients can manage their accounts. In all cases you definitely want to use this area to inform clients of new offerings and post special “existing customer only” promotions. Customers love to receive exclusive bonuses and since they have already bought from you they are very likely to buy again. This style of site still needs to be marketed, but this time towards your existing clients. You can do this on materials that your customers receive such as the product/service itself or on an opt-in mailing list.

Internal Management and Collaboration: not every site has to face the public. There are many advantages to having an intranet or internet site to help you manage your business. You can use this area to collaborate effectively with company units across the country or globe, such as sales teams, branches, investors, or your board of directors. You can also build in internal functionality for easily importing your website’s sales into your accounting software or managing your customers. With internet access available 24/7 to almost anyone and anywhere, you gain a great deal of mobility by not limiting yourself to having to access your data from a single PC.

Selecting a Revenue Model

Depending on your desired end result you may apply any combination of the following four types of revenue models to your site:

• Direct Sales: sales can be traced directly back to the website. Relatively easy to measure ROI.
• Marketing: presenting more information about your company and building brand awareness. Helps increase sales but works alongside other general marketing. Just like buying an ad in a magazine or a billboard, it’s not always easy to measure ROI.
• Advertising/Affiliate Revenue: characterized by free content sponsored via advertising of 3rd party products.
• Cost Savings: your website return may actually come from the money you save by using it in place of other techniques. Providing customer support online and using online collaboration tools are great examples.

Each of these four categories have many different revenue models within them. All of them have their own unique challenges and literally millions of ways of implementing the site. Once you know what it is that your website is doing to make you money, you need to figure out how it will attract this money. This means knowing how to measure the ROI that you are receiving from your site, and constantly working to optimize it (the initial site delivers only a fraction of its potential). It also means you need to find someone that can not only get a great website built, but who understands the revenue model in question and can make make it profitable.

If your website is currently a money pit, hopefully by this point in the article you have some idea why. Fixing it may be a matter of hiring an internet marketing consultant, learning online marketing strategies yourself, and possibly the scrapping the site and starting it over. If your problem lies in no one coming to the site then intelligent and effective marketing is where you need to invest. If people are coming but not buying then new sales copy, a more effective design, or better product/pricing may be what needs to be done. You also need to make sure that when you do get a sale, that all the marketing effort directly involved in getting that sale still leaves you with a profit.

There are many great website developers out there who will simply do what you are told. The finished product may be of extremely high quality and be built on time and exactly to spec. None of this will matter if you don’t have someone who also understands the ROI aspect and can advise you in building a site that will make money for your business.