Starting up a business is not easy and once you have taken the plunge there is a tremendous pressure and need for it to succeed. You’ve convinced yourself that the idea is great enough to take this risk, and if only you could get some more exposure you know that people would buy it. The results are so low because you just don’t have that extra cash to push it as far as you can. This business idea is great and it will make it!

The truth is that if your business isn’t succeeding then your problems are far more internal than a simple need for more money or for a feature on Oprah. Your business plan itself needs re-evaulating and tweaking so that you hit the right formula and it becomes viable. Ignoring this fact is a sure recipe for failure and how I learned this lesson in the first place.

Based on this I’ve come up with a rule of thumb for evaluating the difference between a business that needs more time to become profitable and one that is dead in the water. It’s very simple:

A business that has the potential to succeed with time is working hard to make the improvements and changes required for market success. A dead business continues to operate on the same weakly performing ideas and methods.

As long as money doesn’t run out first the above should guarantee the success of any business, although in extreme cases the successful venture would have no resemblence to the original. It’s a very intuitive rule that operates on the idea that if you can measure results and continue to improve them then at some point you will reach your goal. You don’t need a whole lot to be able to do this except a measurable way of defining positive growth and enough of an open mind to be willing to accept that your original ideas are not the key to owning your own Trump Tower.

This blog is an example of a venture that is not earning a lot of money, but it’s doing extremely well due to the rapid growth rate of the earnings it’s generating. The growth has so been quick that in just several months it has gone from earning pennies a day to averaging $1-2. It’s hardly impressive cash, but try calculating the percentage on that. To accomplish this I have worked on many aspects of this site, from the topics and style of what I write about, to the layout and features I present, to the way I position my ads. I know I need to generate high amounts of traffic and be able to realize revenue from this free content model in order to make it work, so I actively put effort into these things and measure my results.

A position like this one is where many good and highly profitable businesses go bad. The excited entprereneur has poured a lot of time and effort into building the business, but the results are just so low. How can anyone justify operating something that is earning $2 a day? Logically you must look at a realistic growth forecast and be able to determine if contined improvements can generate enough changes to steadily bring abouta profitable business. Or perhaps there is an amazing market you need to break into or a big corporate customer that you need to acquire, after which the serious money will start coming in. If you have a realistic plan to make it happen and are showing real progress on achieving it, then don’t quit because the initial earnings aren’t impressive!

On the other hand if your earnings are $2 a day in your venture and you have no plan for improvement then don’t expect to earn more than that. Big or small, something has to change. In cases like this blog its a matter of incremental small improvements. In other case its something more drastic, like a coffee shop that needs a better location or a way to service more customers in its current size. Maybe the change is so drastic it means closing down the business and starting over with a different product or business model.

It can be extremely difficult to make these larger changes as it can be seen as admitting failure or that the fantastic idea just wasnt that great. That’s really a flawed and damaging perspective to take on though. To me it’s changing course until you find the right path for achieving the results you desire. Even deciding to exit entrepreneurship entirely is not a failure, if you have genuinely found that it’s not the right path for you. The only way to really go wrong in an unsucessful situation is continuing to do the same thing that you are now, hoping that your results will somehow change.

This article is part of the Secrets of Creating and Growing an Online Business series. All week you will find articles that demystify what’s involved and what the secrets are to success.

Today we are going to look at an actual online business run by Brandon Aubie, a friend of mine who first began the business in high school. He is the owner of mySportSite, a fantastic and highly affordable way for sports teams to have their own website. He has a great story about how his business grew naturally and how patience has paid off for him, so naturally I’ve been pestering him to write it down for this blog for some time. My persistance finally paid off in time to make the article a perfect fit for this series.

There are a lot of lessons to be learned here for anyone aspiring to start and grow a business, be it online or traditional brick and mortar. Enjoy!

How mySportSite Came to Be and Grew
by Brandon Aubie

Businesses can sometimes get started almost by accident without the owner even realizing it. That’s what happened to me with mySportSite, which has now been delivering sports team, league, and association websites for over 5 years. Being an amateur web designer throughout my teen years and my father being a local rep hockey coach, I was asked to develop a website for my father’s team that could be used to communicate with players and parents in a quick an easy fashion. The first iterations of this website were moderate successes and after a couple of years I was approached by another coach from the city who wanted a similar website. For a nominal fee I setup this website and rejoiced in this moderate success. The year after, to my surprise, I was approached by three additional coaches who also wanted a website. It was at this point that I realized I may have a product worthy of marketing online.

During the summer months, I spent countless hours rewriting the website software to accept multiple teams with relative ease and began to market online with Google’s AdWords. It wasn’t long before I was starting to get calls from Texas, California, British Columbia, and even the United Kingdom looking to use the sports website service. This sudden growth was proof that I had a product that people wanted.

At this point I decided to take things seriously. I developed a business plan, a financial outlook table, a competitive analyses, and marketing plans. In less then a year my customer base grew by 500% and I started to notice a very interesting trend.

Over 75% of new customers for my business were referred by existing customers!

One of the great benefits of selling websites is that customers are literally paying you to advertise. Every person who visits a mySportSite website sees the mySportSite link at the bottom of the page knows about the service. This is especially useful when the visitors are almost always people related to sports. A minor sports team generally has between 15-20 players with parents. Many of these players have siblings on sports teams and parents who coach them. The power of referrals definitely shines through.

The best part of this is that customers, paying customers, are willingly advertising your service for free! What better advertising is there than a current customer telling others how great your product is? This is one reason why it’s important to keep customers happy. The old saying goes something like “A happy customer tells 3 people about your service and an angry customer tells 10.” It is to your advantage to capitalize on those 3 people to the best of your ability. Here are some ideas for how to use current clients to your best advantage:

1. Offer current customers coupons or discounts on products for every referral they send to you.
2. Go the extra mile for a customer and politely ask them to let others know of your service. You’ll find that people are more than willing to do this.
3. Use high class clients as spokes models for your product. If X uses this service, it must be good!

This article is part of the Secrets of Creating and Growing an Online Business series. All week you will find articles that demystify what’s involved and what the secrets are to success.

There’s a lot of money to be made online and a lot of fantastic opportunity to learn along the way. In fact there is so much choice out there that it’s easy to freeze and not know where to begin. This article is intended to help you in finding the right venture for your situation and skills.

Should You Start At All?

Owning an online business is a commitment and like anything worth doing it takes time, effort, and patience to pull it off. Normal life is rarely an excuse to pass up on embarking on such a rewarding experience, but be realistic about your situation. Be sure that you can devote time each day to keep things running and that your finances match your business needs even when you find that sales aren’t coming right away.

Part-Time or Full-Time?

A great advantage of starting online is the ability to run a smaller business. If you rent a physical store then that store must be operating full-time hours to have hopes of generating the revenue to pay for the rent. Online you pay very little to have your website up 24/7, and that’s assuming your business will even have a site.

If this is your first online venture then you should strongly consider putting this advantage to use and starting it on the side first. You can accomplish a lot while still earning an income at another job, going to school, or participating in some other full-time commitment. You can always quit your day job once the money is rolling in. Do pay attention to your employment contract and check with your boss before you start or you may run into ugly issues with intellectual property ownership.

What Kind of Business Will it Be?

“Online Business” is an extremely vague term. You will need to decide whether you start at home or an office, whether you have employees, and what exactly you will sell. Whatever you do decide to take on, it should be based around a strong talent or skill that you possess. Don’t bother trying to do something that you don’t know anything about just because you hear it’s hot; your abilities and knowledge are part of your competitive advantage!

The amount of opportunities out there is rather stunning, so let’s have a look at a few:

Creating Your Own (Digital) Product

Be it an information product such as an e-book or newsletter, or a nifty shareware program, this is a really good opportunity for creative folks with knowledge and talents to share. The internet has removed the traditional barriers of manufacturing, shipping, and publishing a product by allowing everything to be done digitally. If you can find the right niche and are an expert, then creating a strong-selling product could take you only a couple months or less. You do need to be able to provide substance and not just hype, so draw on what you know and are capable of to create something new and desirable.

CustomBar is a shareware program I wrote several years back which still receives sales today. Since it’s all online the only fees I have to pay are for payment processing (I already have web servers so didn’t need hosting either) and purchasing is fully automated. This is a good example of passive-income: I make money without having to perform work for every sale. It’s a great way to build a highly scalable operation.

Creating Your Own (Physical) Product

If your strengths lie in physical output, selling online still grants you access to a much bigger market than you would achieve through local means. There’s plenty of market space for high quality hand-made goods ranging from candles to pipes, customized items, or items that you are manufacturing.

Shipping becomes an issue so be sure that your target market doesn’t live too far away, or that the cost of your product makes shipping costs negligible in comparison. Every order will inevitably take more of your time than a comparable digital product, so make sure that you are in a position that allows you the time to fulfill orders.

Contracting and Consulting

In this case you are likely selling yourself or a small group of people with a specific skill that others desire. The service doesn’t necessarily need to be performed online to take advantage of the internet, but it certainly helps. Common skill sets include graphical design, computer programming, website optimization, and marketing services, but everything up to and including love advice is fair game.

Be aware that since you are selling yourself and your time, there is a limit on how much work you can take on. Since people are often buying you the person it may also be difficult to hire others to do some of the work. This will make it harder to grow your business rapidly, but with the right skills and a great track record you are also far less likely to become obsolete than a product.

Since starting Tilted Pixel I have carved out a market for myself through providing highly manageable websites that accomplish the needs of my clients. As more people learn from trusted friends and colleagues of my services, I find myself with more and more work to do.

Online Publications

Blogging is the new phenomena sweeping the internet, but people have been making money from online content for a very long time. To do well you or your writers must be able to continuously deliver content that internet users desire and find ways to make money from doing so. Since so much information is available freely it is difficult to charge directly for content. Donations, advertising, affiliate programs, or using your publication to sell your own products or services are all ways to get around people’s expectations of free information. Whatever revenue module you choose, you will need to spend a long time optimizing and building traffic before you receive enough revenue to live on. Be patient.

ProBlogger.net and StevePavlina.com both have terrific information on monetizing content. They are focused on blogs, but much of the same applies to content sites with a more traditional layout.

Reseller & Affiliate Programs

A twist on the traditional buying and selling of product, these programs provide a mechanism for referring potential customers to a product in exchange for a commission. Instead of fulfilling the order yourself and dealing with everything that’s involved, you are merely generating sales. You often get to brand the resold product under your own business name, and some programs provide you with tools to help you sell. You can find a reseller program for virtually any product, but the trick is finding your own niche market segment to sell it to. For some products like domain names the competition is extremely fierce and profit margins are very slim so don’t assume the most popular programs will net the best results.

Be extra careful when choosing to go this route. There is a lot of honest money to be made here, but this is also a field that is plagued with scammers and “sketchy” companies. Never put your name behind a product that you don’t believe in, and never ever participate in marketing that involves spamming or deceit.

So What’s the Right Fit?

Examine your situation, research the above opportunities, and match them up with what you would like to do. If you aren’t betting the farm on this one venture then you should definitely be willing to experiment, fail, and find out what works for you. The worst thing you can do is start and quit because sales aren’t rolling in from day one. The above categories also overlap so you may find that your business is really a combination of several. This blog is an information product and a publication, as well as referring sales to Amazon.com through its Associates program.

The lesson here is that there’s something for virtually everyone that is willing to put in the time and effort to learn and becoming skilled at selling online.