This post was inspired by a conversation I am having in a pay to play forum/membership site. The other member and I purchased an internet marketing program. Our success with the program has been negligible so far. The program was hyped to suggest we could earn a full time living online within weeks if we followed the program. Well a few months have passed and we are not earning a full time living from this program. But the question I will posit here is did we actually follow the program? And if not, why not?
The program in question requires us to create 100s of websites with the expectation that these sites will earn $3 a day on average. Each site could be built in as little as 30 minutes. We might also invest another hour creating a video to promote the site. Does it work? I have no idea. I haven’t even created 100 sites because my initial experience with the sites I did create do not indicate to me that it will work. And I think that is the reason why most of the people are abandoning the system. No immediate gratification and the costs involved.
Let me say one thing about immediate gratification. I hate hype. I make no secret about that. But honestly, which program would you buy:
1. Look over my shoulder as I show you on video step by step how to create an internet marketing empire in your spare time that will make money while you sleep.
OR
2. I will help you every step of the way but know the learning curve will be painful and even costly at times. You won’t likely see much, if any, return on your investment in the first few months. In 6 months to a year, you can have a small income stream set up on the web.
Those of us who buy programs have created the hype. We don’t want honesty. We want hand holding. We want to be told anyone can do it. And that we can do it in our spare time between our jobs and family and softball league. I won’t stop criticizing marketing hype but I do feel that I am partly responsible for it.
But hype is not what prompted me to write this post. In conversation with my friend, he said something that jumped out at me. He said his budget won’t allow him to churn out site after site. But that was exactly the heart of the program: churning out site after site. Before I got involved with the program I ran the numbers in my head. I am a former financial professional. It comes naturally to me to think in terms of numbers. So using the example of this one program, let’s look at some numbers.
- 100 domain names at $8.95 each per year = $895.00
- Hosting – the program recommends a $35 a month host = $420.00 annually
- Cost of the program, one time fee = $97.00
- Private program forum $50 a month = $600.00
- One virtual assistant for technical and ongoing SEO = $3000.00 annually
And there you have it. Over $5000.00 for the first year and just 100 sites. Building 5 sites a day, 25 sites a week, 52 weeks a year, you should actually have 1300 sites at the end of the first year. Cost of 1300 domain names $11,635.00.
Now I don’t know if I got a 100 sites up that I would amass $300 a day ($3 a day per site). But I do know that an online marketing business is no different from any other business in one respect. It requires start up and ongoing capitalization.
The number one reason for business failure is under capitalization. It takes money to make money. Sure you can do an online biz for much less than a brick and mortar but to think you can do it for pennies is setting yourself up for failure. I don’t know the specific budget of the person who was posting. But I can at least point out, especially to the newbies, that there are real costs in running an internet business. Hopefully, I will save at least one person some heartache.
Years ago I sold an MLM product. One of the main objections we had to overcome was people saying they couldn’t afford the program. Now that I think about it, starting an MLM biz probably costs about in the same range as starting an online biz. To overcome objections, we would ask the prospect how they could get extra money to afford our program. The initial outlay to join the program was $100. Ongoing costs would be primarily advertising and education. This was in the infancy days of the internet so advertising was mostly local and expensive. Printing flyers. Newspaper ads. Business cards.
The crux of the argument is this. How badly do you want it? Do you want it badly enough to take on a parttime job to afford it? Do you want it badly enough to give up $100 a month cable or $50 a week for movie and dinner date night (I’m a cheap date LOL)? Do you want it badly enough to give up that vacation trip (I did for the MLM)?
The point is most people have money when they sit down and really think about it. Some people are living hand to mouth but in most of North America, Europe and Australia we have a pretty good standard of living. I used to have a business building and selling computers. I once delivered an order to a notoriously poor neighborhood in NYC. My clients were living way better than I was: new furniture, central air, big TV and all this was in subsidized housing. It really is a matter of perspective.
Anyone who starts an online business without a plan of how to capitalize it is setting themselves up for failure. A hard look at how much you can invest in your business and yourself has to be taken. Business, on or off line is a gamble.
No one plans to fail but it happens. Many successful biz people failed repeatedly before they hit on success. And some people may never hit on success but I couldn’t live resigned to the fact that my paycheck is all I have to look forward to. I want the freedom of owning my own business badly enough to work on average 14 hours a day, 7 days a week. The 4-Hour Workweek is the reward at the end of the road. It is not so much learning how to create a “business that bothers me the least” as it is initially capitalizing a 4-Hour Workweek business.
My VA’s don’t work for free. My business is not paying their salaries. But their salaries are part of my cost of doing business. The start up phase of my biz plan. Before them, a big part of my biz plan money was being spent on education and tools. Currently I am investing in web real estate… web sites, hosting.
The bottom line is you have to be realistic about starting an online business. I don’t advocate writing a complex business plan. I know that turns a lot of people off. But at the very least, you should know exactly how much capital you are willing to invest in your business, where you are going to get it and then match that to the business you choose. I don’t recommend credit cards though I know many people do just that. Miracles do happen but not often enough. You are not going to get rich overnight. Your business is not going to be self sustaining for a minimum of 6 months. Plan to throw money at it for a while. And close your ears to the hype.
Now go. Get a pad and paper and figure it all out. If you are over your head in a business, cut your losses and dump it. It is better to start over with a proper plan working for you than to keep bleeding money into a terminal case.