We hear talk all over the Internet about how many businesses fail online each year, but what we never really hear to much about, are why these businesses fail and how it might have been stopped!
That’s the subject of this discourse.
Every year, thousands of people start new online businesses, only to fail a short time after. We read about this all of the time throughout the Internet marketing circles, and in fact, you may be in a failing business as you read this yourself!
BUT, there is good news for those online business people who’re sticking it out and hanging in there. The first step in the success of your business has already been taken and completed by the simple fact that you’re not giving up so easily.
Far to many people start an online business only to give up a short time after. And, that’s okay, because those people were never going to make it anyway.
There are a few key elements that will help determine the success or failure of your online business, one of the main keys is that of growing or growth.
Now, I’m not talking so much about growing your business in the sense that you’re making more money (hence growing or growth is happening), but I’m talking about growing via learning.
I’m going to tell you about my experience so you can learn from my downfalls, and hopefully, you’ll grow by learning from my mistakes as apposed to making these same mistakes yourself, and killing valuable time.
A Look Into A Successful Business From The Past
The first online business I created was a website selling 3D railroad models to a community that was born out of a release of a train simulator software by Microsoft. It was properly named Microsoft Train Simulator.
The first day my little website went live, I believe we made around $300 in that first day. Now, for someone just getting started in this thing we call Internet marketing, I was totally blown away, and couldn’t wait to create more products and see more money come in.
Everything I sold on that website was priced in the area of $4.95 to around $19.95, depending on what options the products came with when purchasing.
In our first year, we made a gross income of around $28,000, and the following year we made a gross income of over $40,000.
I contribute much of the success and growth of this little business from the purchase of Corey Rudl’s marketing package called: “The Insider Secrets To Marketing Your Business On The Internet“. We (my wife Marsha and I) purchased this course about two to three months into the opening of our business, and it literally changed our lives in how we looked at business, and online marketing altogether.
The biggest change and growth we seen in our little business was when we started to utilize email marketing in our business plan.
Now, I know you hear all of this talk around the net about people having killer conversion rates of 3%, 4%, 5% and even 6% from their email lists if they’ve cultivated it and grown it properly with super targeted subscribers. But, to be honest with you, at least for me, that is about average for a conversion ratio today from one of my freebie lists.
Let’s look at conversion ratio for a moment to make completely sure you totally understand what I’m talking about in this case…
Let’s say for example, you have an email list of 100 subscribers. When you send out an email to your list, if one (1) person makes a purchase driven from that email, then you would have had a 1% conversion ratio for that email.
So, just take the numbers up from that point and you can start to understand why so many marketers talk about having super large email lists.
If you had an email list of 10,000 subscribers, and you had a 1% conversion ratio, then you’d be selling to 100 of those 10,000 people on your list.
Getting back to our Train Simulator web business, by years end of our first year, we had a list of about 320 or so people. Now, you’re about to see what “niche marketing” is really all about.
What kind of conversion ratio do you think we had with that little tiny list? 1%? . . 5%? . . 15%?. . .
I could always, and I do mean always, bank on selling to a minimum of 80% of that email list with every email I sent out! And, in most cases, we were usually looking at, at least 90% in sales and more!
WHAT!!? How Can This Be!!?? ..you ask…
That my friend is niche marketing at it’s finest.
You see, what we had here was an email list of super targeted, super focused subscribers, and more importantly, an email list of current customers!
Now, Listen To Me Very Closely Here, I’m About To Reveal A Secret To You That Can Literally Change Your Business And Your Life in One Simple, And Easy Scoop!
Remember what I said above? Not only did we have an email list of subscribers, but 50% to 60% of those subscribers were also our customers!
We learned very quickly on, that an email list of customers was much more profitable then any list of 10,000 freebie subscribers would ever be.
Now, don’t get me wrong here, you also want a list of freebie subscribers too, because every now and again, you WILL convert a few of those into your new customers.
Now, Let’s Get Back to Why Online Businesses Fail And What You Can Do To NOT Be Another Statistic In That Lineup!
Okay, let’s get back to the original discourse…
It is my belief from the research I’ve done, and from my own experiences, that one of the biggest reasons online businesses fail, is because the entrepreneur fails to keep in contact with the financial backbone of his or her business to begin with.
Remember those words for later, financial backbone.
After 3 years or so into the Train Simulator 3D modeling business, our business dropped off sharply because Microsoft decided that they were no longer going to support the Train Simulator franchise.
There was also another company who had created a train simulator software package that I believe took enough of Microsoft’s business away for them that they decide that it just wasn’t worth it financially to pursue any further.
NOTE: This was my own speculation from all of the articles I had read, and from the “inside info” I received about why Microsoft decided to sell this franchise. Microsoft has never said anything like this publicly to my knowledge.
So, rather than learning how to program and design 3D models for another train simulator software, I thought it might be just as easy to build another business from scratch where I could explore my computer programming skills, and find niches where a software solution might be needed.
Take notes, because this is where you’re going to learn from me, and NOT do what I did… Right?.. Right!
So that’s what I did, I started another web business in a completely different market, that market being software solutions for Internet marketers and businesses.
This was the first bad decision in a long line of bad decisions to come.
First off, I decide to start a business in a market that I really knew nothing about or even what competition I had out there. Any business you start in the Internet marketing genre could potentially be a very bad business decision.
Why?
Because, Internet marketing is a very over populated market, filled with thousands and thousands of people who know nothing about what they’re trying to sell, talk about or what they’re doing, but all claim to know how to teach you to build a successful Internet business.
This makes it extremely difficult to find and get any quality information in which to grow a business from and with.
I struggled for the first 2 years, hardly making enough to stay in business, and there were more than a few times that I almost went back to commercial truck driving just to start paying the bills again, and give my wife and children the life they deserved.
At one point, we were so broke and empty, that I actually stopped everything, and got a day job! Although this only lasted about two weeks, it was the beginning of the end of all of this struggling to make ends meet.
When my wife finally convinced me that we could make it, just like we did the first time around, I made the best decision I had made in those last two years… Here’s what we did…
First, I said to Marsha, “we need to stop and look very closely at what I’m doing that’s different than what I did before when we were doing so well”.
Are You Ready With Your Notepads? Good, Here We Go…
After sitting down and making a very large list of everything I had been doing, from creating software to building 60+ different websites all on different domain names, to keeping very bad customer support habits, and on and on, well it all became very clear what was wrong.
I had totally dropped the ball on all of the fundamentals and basics we had learned from Corey Rudl’s course “The Insider Secrets To Marketing Your Business On The Internet“, and I was running in circles like a chicken with it’s head cut off!
Every dime we made, I was spending on some new “instantly make millions on the web” BS ebook or package, claiming to be able to show me how easy it was to make millions on the Internet, when the whole time I had every tool and resource of knowledge we had needed all along to make our new business work.
AND, I had completely overlooked the very backbone of our business… Our Customers!
Not only had I made our email list the very last priority for our business, I had not kept up with the customers we had up to this point!
Time For A Change!
So, it was time for a change, a time to get back to the very basics of building an online business or any business for that matter.
Here’s a list of the changes that we made and the approximate order we made them in:
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I dropped almost every domain and website I had put together up to this point
With over 60+ websites and domains to think about, it made it very difficult to focus on anything else long enough to be worth while. This all started back at some point, I had found an eBook that told me that I could build 100’s of Google AdSense based websites, and make hundreds of thousands from those alone. Bull S#!* !!
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I was paying for two dedicated servers that we couldn’t afford to the tune of over $500+ per month!
Next on the list was to get rid of the 2 dedicated servers I was paying for that we couldn’t afford at that time anyway. Every month it was the same old thing, panic would set in, and I’d start scrambling to figure out how to pay those bills. Again, Bull S#!* !!
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Figure out which 5 of the 60+ websites were going to best fit our businesses needs
Next, we set out to find the top 5 websites/domains that would best fit into our new business plan, and completely dump all of the rest. All 5 had to work together in some form that made them practical and work for the business, not against it.
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Send out an email to all of our customers and apologize for my lack of customer service and support
Next, it was time to tell every one of our customers (if at all possible) that I had seen the error of my ways, and to make a public apology and make amends where possible. Let’s face it, this is the backbone of our business, and they deserve to be treated as such. In 98% of the cases, that means treating them like Kings and Queens!
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Make the email list the base and foundation of our business
In everything I had been focusing on up to this point, the email list was totally overlooked! That Had To Change! It was now going to be the very base of our business, and it would receive about 80% of the energy and focus until it got rolling and building on it’s own. If done correctly, an email list or list(s) can become viral, and you will do very little work to build it after it gets rolling.
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Start creating simpler, and easier to use and understand software products
99% of the software I had created up till this time was very complicated and in some cases, very expensive. And, it was definitely NOT created for the “average” person to use. Being a programmer, you can tend to overlook things that seem easy to the programmer to understand, but can be very complicated and confusing to the end user. This is NOT how you sell software on a consistent bases.
- Create Simple, And Professional Mini-sites As Apposed To Monster Sized Content/Shopping Sites
We had one primary sales website when we first started, and it’s where I sold 99% of the software I had created. This was really a bad idea, especially in the Internet marketing genre, because you really need to focus tightly on one thing at a time.
Unlike other niches, the “marketing software” niche is a very fast paced group of people, and they don’t have time to look through an entire web store for what they “might” want to purchase. You’ll lose their attention, and they’ll be gone before you know what happened.
Also, as a programmer, I had really been lacking on creating websites that could utilize PayPal’s automation abilities, and I was being overrun with software support issues. Mainly, people not receiving the software they were purchasing via email or a download link on site.
Also, I seemed to think everyone knew how to install a PHP script on their server, this too was a bad thought pattern, and needed changed. I had really gotten into a bad habit of supplying very minimal help files, and most people couldn’t figure out how to get my software installed. Very bad for return sales!
Since The Change, Here’s What’s Happened
Okay, since I changed all of the above and more (this has been about a year ago now) here’s how our business has changed.
Making the email list a number 1 priority has totally increased our income by leaps and bounds. Creating “sub-lists” has also helped change the support issues we were having, as I can now send out periodical emails explaining how to do things with my software, tutorials, insights, etc.
We now have a more consistent flow of traffic to all of our websites, with more sales, about 85% of which comes from our email lists.
We’re currently updating all of our websites to use my new Elite Minisite Sales System software, which takes PayPal’s IPN (Instant Payment Notification) and automates all aspects of the sales process, including sending out the emails with download links.
That, along with our new dedicated support site, has centralized any and all support issues, making it much simpler and easier to take care of our customers needs, in turn making life much easier not only on me, but our customers as well.
Now for some stats…
Before these changes, we were averaging about $35,000 - $38,000 per year. Since the changes above, we’re on track to make $60,000+ this year, not to mention that running the business is much easier, with less headaches, and more satisfied customers, making next years outcome even greater.
Next years goal will be to gross $150,000+ for the year, which by my view of the situation, looks to be a very easy goal for us. I may have to increase that goal, I don’t want things becoming to easy! :)
Summary..
I know this has been a very long post, but I also hope that it has shown you many things and areas that can be improved upon to help grow your business, and do that easier than you might have thought possible.
The bottom line is, build that email list, and before you know it, growing your business will be easier than you ever thought possible.
I highly recommend using Aweber Auto-Responder Service for handling all of your email lists. With the Aweber service, you can build sub-lists, making it very easy to have a list for each customer base for each product you sell, have sub-lists for anything else you do, such as joining JV Giveaways, doing JV deals with others, and so on.
Always create a new sub-list for each business venture you create or do with someone else, this way you can keep easy track of who is who on your email lists, and where they came from.
The basic structure of your email lists should look something like this:
Main List–|–Everyone Is On This List
|
Sub-List 1
|
Sub-List 2
|
Sub-List 3
Etc, Etc..
And don’t forget, make sure you always take care of the backbone of your business… Your Customers!
Until Next Time, May Success Be With You,
Patrick
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