This is the first part of a multi-post series called What it Takes to Start a Business Online. This series might apply whether you’re starting a blog, the next YouTube or just about any other business idea you might have.
You can read other parts:
The very first ingredient that any successful business requires – whether its offline or on – is time. Growing businesses is like growing trees, some types of trees grow really quickly, some take years. No tree grows overnight. Generally speaking online business can be a lot faster than working offline and thats great but its really vital to understand that it still takes time.
This has a lot of implications for a new venture including asking yourself whether you have time before your window of opportunity closes, whether you have the mental stamina to keep going when things don’t seem to be happening and most importantly whether you have the financial resources to support you while you get to a profit.
The most important implication of the time factor is that if you have to wait for a long time before your site starts turning a profit, can you hold out?
Profits and even revenues can be quite far off in the beginning. On a small scale, if you start professionally blogging, how long do you need before you can place advertising on the site and how long before it actually brings in some money.
The length of time required can be surprising, which is one reason why most blogs are just amateur hobbies. On a larger scale, if you are developing a web application, can you survive the length of time it takes to get it bug-free and ready to launch?
As a general rule, however long you think it will be before you start making money, double that and then double it again just to be sure. It takes a long time for a site to become established.
It even takes quite a while to get just your PageRank up from 0, let alone heavy traffic, large user base or readership and actual, cold, hard cash.
In my own experience when we were building FlashDen, there was a long period of about 8 months before the site launched when we were simply in development.
Even after launch it was months of some very hard work marketing the site, supporting members and working on improving it before decent revenues came through. And of course when you are involved in a startup, there is an overwhelming temptation to think big.
When I look back I see that our first fortnight’s revenue estimates – modest as they were – from before launch weren’t actually achieved until three months in, they were in fact way off.
There are a few solutions to the financial resources problem. If you really know what you’re doing and your idea is amazing you could go for funding, but quite frankly for the majority of people this is a bad idea.
It means spending a lot of time and effort on something other than your business (getting funding), it means bringing in other owners, it means needing to make a lot more money just to break even, it means getting comfortable thinking money is easy to come by and often spending unnecessarily, in short its a bad idea.
Another solution is to start your project on the side while you work another job. This is what we did with FlashDen and it means months of very hard work.
Starting a business is hard, starting a business and working another job is doubly hard. It is however a good way to bankroll your operation without significant risk, but depending on the size of your plans, just be ready to stomach constant 12-16 hours days and literally months without a day off.
Yet another solution is to save up or borrow a tidy amount of cash and then try to make it before that runs out. If you’ve ever tried to complete a task against the clock, you’ll know what a high pressure situation this can throw you in. Unless you’ve been generous with your estimates, expect to be stressed about making it to the finish line.
Prepare for the worst
I realize that you may be sitting there thinking “Boy this NorthxEast guy is a real downer!” but remember if you prepare for the worst you have nothing to lose. If luck is on your side or you catch a break then that’s great, but if you don’t… at least you’ll know what’s ahead.
Sometimes things will seem to go much faster than you expected and sometimes it feels like you’re moving at a snail’s pace. Whatever the case knowing that things take time will help you be prepared.