Website Business Tips

One question I get asked frequently is “What is your secret to success?”

I like to learn how other people become successful too, so getting asked this question doesn’t bother me. What does bother me is knowing that even though I answer this question, nobody takes my advice

Here’s my secret to getting rich fast..Ready?

Under promise and Over deliver in EVERYTHING you do!

Let me break down what this means exactly…

Right now, people/customers are extremely jaded. There are so many ripoffs, scams, con artists and crappy products being sold today it’s not funny.

Business owners just want to cut corners, cut costs and get more money for doing less work. This results in bad products that fall apart, services that are performed poorly and ultimately the closing of that business when all this nonsense catches up with them.

I’ve always separated myself by making a promise to my customers, then fulfilling that promise AND THEN SOME. Going above and beyond every chance I can.

If I promise a product will be shipped out within 3 business days, I work extra hard to get that product shipped out the same day. Not because I have to, not because the customer expects it, but because THAT’S WHAT I WOULD WANT AS A CUSTOMER MYSELF!

Put yourself in your customers’ shoes. Look at your business from a customer’s perspective and see how you can go above and beyond.

If you can go above and beyond what your customer expects, you will get rich.

Customers will start talking to their friends about their experience with your company. You will get more repeat sales because you treat your customers amazingly well. You get the point.

This doesn’t just work with customers. ALWAYS go above and beyond in everything you do and your life will never be the same.

If your suppliers’ request payments 30 days from now, pay them today (you’ll get better pricing and better service from them later)

There’s my secret to success. It’s so simple, yet few people follow my advice…I guess it’s because it requires them to “do a little more work”, and that takes effort. It’s no strange coincidence that 10% of the people in the world have 90% of the money! Guess who is going above and beyond?

Maybe that’s why most people don’t get rich?

As I stated before, selling your website is always a good idea in my opinion. But, how much is your website worth if you do decide to sell it?

Based on my experience of selling many websites over the last few years, this is what you can expect…

There are a few things that determine the value of your website. These are:

1) Age of the website (the older, the better - also, how long it has been generating revenue vs existing without revenue)

2) Net profits of the website per year (nobody cares if your website grosses $1 million per year if it only profits $5,000 per year after expenses).

3) Any assets the website has including a subscriber list, customer database, organic search rankings, exclusivity of products sold, and brand recognition to name a few.
The MAIN thing buyers look for is the net profits. Buyers are typically looking for a return on investment (ROI). If they spend $100,000 on your website, they want to see how much money they will likely get back from the profits of the business each year (ie - their return).

Since net annual profits are the main pricing criteria most buyers use, I’ll expand on this a bit…

A “rule of thumb” for pricing based on profits is 24 months worth of net profits = selling price for a website. Brick & Mortar businesses typically average 30 months net profits when sold. The difference mostly being the fact that websites typically have few physical assets to them. They are just a bunch of invisible files floating around in cyberspace.

Some people will argue that websites can only be sold for 12 months worth of profits.  This can be true if you don’t know how/where to sell your website, but I almost always get 24 months revenue as a sale price.

A 24 month profit example would be if you have a website that makes $1500 per month in net profit after all expenses. You could likely sell your website for:

$1500 x 24 = $30,000 to $38,000

Now, getting the 24 months net profit price is not always guaranteed. The longer history you have of earning the net profits the better.

For example, if your site has been earning $800 per month every single month for 3 years, you will likely get more than 24 month’s worth of profits by selling it. This is seen as a less risky investment for the buyer of your website.

If your site has been making $800 per month and the site is only 4 months old, you will likely only get 10-14 month’s worth of net profits in a sale. It doesn’t have the history associated with it, and it hasn’t proven itself to be a solid business to buy just yet.

Same goes for a website that makes $100 one month, then $2500 the next, then $800, then $50, etc. It’s harder to sell those types of websites for a premium price because they are so erratic.

Below is a “real life” example of a website business progressing towards being sold. This is a brand new website you can started from scratch. Your “exit strategy” is to sell the website after 18 months. Let’s see how much money you will make after 18 short months.

Month 1 - $50 profit (new site, starting very slowly)
Month 2 - $50 profit
Month 3 - $150 profit
Month 4 - $250 profit
Month 5 - $550 profit
Month 6 - $800 profit (starting to get some traffic and income picking up)
Month 7 - $1000 profit
Month 8 - $1400 profit
Month 9 - $1900 profit
Month 10 - $2000 profit
Month 11 - $3300 profit
Month 12 - $4000 profit
Month 13 - $3100 profit (Slight drop in revenue is very normal)
Month 14 - $4600 profit
Month 15 - $5000 profit
Month 16 - $4800 profit
Month 17 - $6000 profit
Month 18 - $5000 profit

So, after 18 months, your internet business has generated $43,950 in profits for you. That doesn’t seem to difficult to do does it? Not a very scary number to shoot for…

Now, what most people do is hang on to these websites that are now making about $5,000 per month. The income eventually levels out and holds steady for a while until the owner gets tired or bored. Maybe the search engines change an algorithm or there is a trend change and your product is no longer “cool”.  The revenue then starts to dip into a downward spiral until the business is only making $500 per month again. This is when most website owners decide they want to sell their site.

Well guess what, it’s too late!

As a buyer of a business, all they see is the business is steadily declining and they want nothing to do with a failing business. All that time you spent building your business is now worthless.

BUT, IF YOU WERE SMART you would have sold the site after 18 months like you originally planned.

So, by putting the growing, thriving business up for sale on the 18th month, let’s calculate the asking price…

To get an “average net monthly profit figure”, common practice is to use the last 12 month’s worth of profit figures and average them. This is done so a buyer can see if there are any sales are steady year round or if there are seasonal spikes in sales.

In our example, the last 12 months’s profts were $42,100 in profits / 12 months = $3,508 average net profit per month.

Since your business has been around for over a year and is showing steady growth, you can command a premium price. Probably in the range of 24-30 month’s net profits.

Your selling price would be $85,000 - $100,000 as a lump sum cash payment (and your chances of getting that are very good right now).

Assuming you sell the business at a low range of $90,000, plus the $42,100 the business made over the last 12 months, you will have made $132,100 in one year!

Don’t let the numbers throw you off. My point is, you can start a simple website business, have it grow slowly, and have over $130,000 in the bank in less than 2 years from right now!

The example I gave above is very realistic and doable. Depending on how much effort you put into building your web business, you may be able to grow it even faster than the example above.

I’ve had businesses virtually double every month for the first 12 months and hit $50,000 per month within 7 months of starting them (I also had no life and worked 18 hours per day during that time as well!). It simply depends on your motivation…

I’m sure you’ve seen those little text boxes on websites that ask for your name and email address, right? If not, look up and to the right of this page

Well, that’s called an “opt in email form” or simply put, a way for a website owner to collect contact information from their visitors.

When you submit your details on these forms, the information you entered is sent over the internet to be stored in a database.

Most of the time, your contact details are sent to an “Autoresponder” to store your information.

So, in it’s simplest form, an autoresponder is a piece of software that allows a website owner to store contact details of people who request to be on their mailing lists.

When you want to email the people on your mailing list, you simply login to your autoresponder service provider (there are a bunch of companies out there which I will go over shortly). Once you are logged in, you can type an email that you want to send to everyone, then select which subscribers you want the email sent to.

This is no different than a typical newsletter software service.

Where the “Auto” part of autoresponder comes in is this…

You can pre-write a bunch of emails and store them in an autoresponder service. You can then schedule these emails to be sent out to people on your mailing list at certain intervals. You can have anywhere from 1 to hundreds of pre-written emails stored in your autoresponder at any time.

For example, let’s say you want to follow up with a customer after they buy something from you. Well, it’s a pain to go through each of your customers and hand write each of them a thank you message. So, all you do is send your customers to an autoresponder optin email form after they buy something, and they enter their name and email address into your autoresponder system.

In this example, let’s say you also wrote 5 emails to go out to this new customer. The first one will be emailed immediately when the customer fills out the contact form. This email might say something like “Thank you for your purchase of xxxxxx. We really appreciate your business and if you have any questions about your order, please feel free to contact us at xxx-xxx-xxxx”. (You can be more elaborate than this if you want).

Then, you decide you want to continue writing to this customer to build up a relationship with them, which will make them more likely to buy from you again in the future.

So, you have your autoresponder service send out the second of your 5 pre-written emails four days after the customer signs up. This email can say something like “Hi Bob, I hope you are enjoying your new xxxxxxxx. We’ve been getting lots of great feedback on it from other customers who bought it as well. Again, if there is anything I can do to help, please let me know.”

There are two additional great things about autoresponders:

1) They can appear as if you sat down to write the email to the customer directly (even though that same message could have been sent to 100’s of people the same day). You can insert items in your emails like the customer’s name, which gives the appearance that you took the time to follow up with them directly.

2) It takes NO EFFORT to follow up with people once the original emails are written. The “system” automatically sends out the emails when you schedule them to go out, it keeps track of people who wish to unsubscribe to your mailings, and it can handle sending out thousands of emails a day if you want. Autoresponders are a huge time-saver in business, and really help you keep in touch with your mailing list and customers with little effort.

Like I mentioned before, there are lots of companies that can manage your autoresponders for you. The company we use is called Aweber and they do a pretty good job.We’ve also tried IContact as well which was good too, but they were a bit expensive compared to Aweber.

Regardless of what your business is, it’s always a good idea to use an Autoresponder to keep in touch with prospects and customers. Building that relationship is critical to your success…

I typically share online business ideas here, but I came up with this idea a couple weeks ago and figured you could benefit from it. This one should work in any “touristy” kind of area. Here’s how this business would work…

When I was in Vegas a few weeks ago, my wife and I were standing in front of the Bellagio. It was a beautiful scene with the palm trees and fountains in the background.

I couldn’t help but notice all the people taking photos in this one spot. I watched literally 30 people in a ten minute timespan fumbling around to take a “family photo” of their crew in Vegas. Some people would ask a stranger to take a picture for them so everyone could be in the picture at once. Others were too paranoid to give their camera to a stranger so someone always got left out.

That’s when I thought of this idea…

If you are near an area with lots of tourists, you can take this simple idea and probably make lots of money doing it.

Here’s how it works:

First, dress in a decent/clean outfit and make a sign to hang around your neck that says “Will take your family photo with your camera for free…tips appreciated”.

I know I would give someone a buck or two to snap a photo of all of us on vacation, especially knowing this person wasn’t going to take off with my $400 digital camera.

If you are standing near a popular attraction or beautiful background with lots of people around, you should be able to snap a picture every 2-3 minutes!

So let’s run the numbers… a $2.00 “tip” for taking a picture, and taking 25 pictures per hour would put an easy $50 per hour in your pocket.

Not bad money for easy work that makes people happy! You could do this to pay for your vacation even. If the hotel room is $150/night, you just have to snap pictures for 3 hours and your room is paid for, right?

You might want to check out the laws in your area before trying this, just to make sure there are no city ordinances against this type of thing. It sounds good in theory, I’m not an attorney, so use this idea at your own risk, I assume no responsibility if you get arrested

I would be interested to hear from someone who tries this to see if it works out as I “picture” it. Ok, that was pretty bad I know…