Do You Have What it Takes-Get to Profit as Soon as Possible

On March 20, 2000, the financial markets realized that the dot-com bubble had burst. Nearly four hundred internet startups had amassed a market value of $1.3 trillion, yet most of the startups attracting the investments had yet to turn a profit. The theory at the time was that if you attracted a large enough user base, even if you operated with massive losses year in and year out, you would win. The theory was right for Google and Amazon. It was wrong for just about everybody else. A mass delusion had allowed a large number of very smart people to ignore a fundamental principle of business: It needs to make money.

We’ve been making money with our own eCommerce sites and consultancies since 1998. We made it through the dot-com bubble because we recognize the need for profitability. And we strongly believe that your business can be profitable before you talk to a single investor. We suggest that you start there.

“Ramen Profitable” is Better Than a Billion Dollars of Borrowed Money

We wouldn’t say no to a billion dollar business loan (who would?), but nothing beats profit. Profit means you can transform any money you earn into more money. Profit means you can pay back your loans.

No business situation is more precarious than one without profit. If you’re not earning a profit today, how can you be sure you ever will? What would you do with a billion dollars of borrowed money? What parts of your business would you invest it in? If you turned it into anything less than a billion dollars, you would go out of business.

We know it’s possible to turn a profit today. We’ve built eCommerce sites that sold other people’s products, and made a profit. We know how to transform cash into more cash. That’s the “secret” to staying in business.

The Online Opportunity for Small Businesses

We work with businesses that want to expand their ROI by taking advantage of the low cost, high reward marketing resources that the web has to offer.

But if you think it’s going to be as simple as setting up a website, a Facebook Page, a Twitter account, a Google+ profile, and throwing some money at pay-per-click ads, you’re going to have a lot of work and surprises ahead of you.

The web is profitable as a marketing tool, but it’s not easy.

If you want pay-per-click ads to work for you, you’ll need to invest some time in market research. Find out who your customers are, what they’re searching for, what keywords they’re looking for, what kind of landing page they expect, what they’re most likely to click on, and what’s going to scare them out the front door. You’ll need to measure the connection between your online impressions and the people who walk through the front door, and you’ll need to learn how to optimize your bids in order to keep that advertising budget as profitable as possible. And no, AdWords Express isn’t going to do that for you.

If you want to grow the lifetime value of your customers, you’ll need to convince them to sign up to email newsletters, to read your blog, to keep visiting your site, and to willingly expose themselves to your messages, so that you stay at the top of their mind. You’ll need to gain their trust, and you’ll need to do it by establishing yourself as an expert worth listening to.

There are a million and one ways to leverage the web in order to transform a business with an operating loss into a business with an operating profit. None of them are easy.

All of them are better than operating on borrowed time. So ask yourself now, “Does your business have what it takes to thrive in the Austin market?”

Original Source:

January 9, 2015

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