Six years ago, I built my first online business. Like most entrepreneurs, I’ve learned what works and what doesn’t the hard way: through experience. Despite facing many hurdles, each project I’ve built has been more successful than the last.
Recently, I began to wonder what is it that I’ve learned that’s made this difference. In other words, if I could go back six years and give myself a few tips, what would I say?
Here are seven lessons I wish I knew six years ago, before starting my first online business.
1. Invest in a good foundation for your website
One of the biggest setbacks that holds so many online entrepreneurs back is working with a poor foundation. You wouldn’t build a house on a foundation of sand, so why build a website with equally poor foundations?
I once believed that free web hosting was a great way to save money. Similarly, I used to skimp on payment processing, and lots of other aspects that formed the foundation of my website. The outcome was inevitable: I was being slowed down in both known and unknown ways.
I’ve had websites hacked, servers go down repeatedly, and have spent literally weeks fixing issues that could easily have been prevented for $100 if I’d only had the foresight.
I’ve learned this lesson the hard way. Here are a few things that, in my experience, are absolutely fundamental for anyone starting a new online business.
Use reliable web hosting. One of my recent clients spent two months trying to migrate away from a poor web hosting company that was costing them Google rankings and $1,000s in online sales due to constant outages and slow connection times. Unless you want adverts placed all over your websites, get the best web hosting you can afford.
Use a good payment processor. When I began building online businesses, plugins like WooCommerce and eJunkie didn’t exist. This made split testing, changing prices, and adding products very time consuming. Use a payment processor or eCommerce platform that allows you to scale and iterate quickly.
Use a good CMS. Until two years ago, my main online business was completely hand-coded with no content management system (CMS). While this is very rare now, so many people use limiting CMS platforms to build their online businesses. Let me save you some time and money: build your website on WordPress. While it may have a bit of a learning curve, it’s worth the effort to learn.
Use a well-coded theme. A good theme will prevent you from having to spend weeks tweaking it in the future to optimize your page speed and usability.
While there are countless other things that contribute to your website’s foundation, these are where most entrepreneurs waste so much time trying to correct. They’re also extremely affordable things to get right.
2. Learn to delegate and outsource
A rookie mistake that so many online entrepreneurs make (myself included) is believing that you save money by doing things yourself.
This is true in some cases, and doing things yourself can be a great learning exercise, but it’s not without its flaws. The common miscalculation is that people do not value their time highly enough.
The irony is that the moment you begin delegating and outsourcing, you will most likely notice your profits soar. Why? Because you’re leveraging time. You’re using money to create more working hours in the day. When that time is spent effectively, your business grows at a faster rate.
So what can you delegate? For me, coding is a huge one. You can spend days tweaking WordPress and making your website pixel-perfect. Yet, there are so many incredible designers and developers who can do this for you without breaking the bank.
Build your website on a well-coded and beautiful theme that you like. This will save days later on. When I’ve skimped with poorly coded themes in the past, I’ve paid the price later on. Don’t do it.
You can also outsource your backend website management to services like WPcurve. Alternatively, Odesk is ripe with talented developers that are extremely affordable to hire.
3. Create systems that compound
If I had to summarize the lesson that has had the most impact on building a successful online business, it’s this: build systems.
In the context of business, a system is something that runs itself without human intervention. When I started out, almost all of my businesses required me to run them on an ongoing basis. If I wasn’t around, they’d stagnate. How can you scale a business that requires you to be in ten places at once? This is a recipe for burnout.
When you build projects that you can leave alone for twelve months to grow on their own, you’ll have more free time to build new projects. You’re then able to spend the majority of your time planting new seeds, opposed to running around reviving old plants.
Ultimately, this creates a compounding effect, where at any given moment you have tens or hundreds of products and businesses running themselves and growing simultaneously.
This strategy requires patience, but as the proverb goes, patience is a virtue.
4. Choose your niche very carefully
The common advice given to new entrepreneurs and bloggers is to follow your passion. There’s a fundamental flaw in that advice: not everyone’s passions are aligned with their goals.
In my instance, my passion has long been for the music industry. But it’s extremely difficult to build a highly profitable online business in the music industry. It took me years to get my music project to a level of income that I’ve reached in two months with projects in different niches.
The implications of your niche go way beyond financial goals. Your online business will determine who your friends are, where you travel, the conversations you have, and how you fill your days.
5. Surround yourself with people smarter than you
Too often, we don’t know what we don’t know, but our friends do.
I’ve had many product launches saved, crises averted, and game changing opportunities come as a result of help from a friend. No one, despite how intelligent or hard working they may be, can achieve great things alone. It’d be foolish to even try.
Secondly, building an online business requires a steady dose of motivation and inspiration to get through the tough times. When you’re surrounded by people who inspire you, you’ll be more likely to persist. The opposite is also true.
Proactively connect with incredible people. You will save their bacon and they’ll save yours.
6. Know that growth is exponential, but we think linearly
Most online business plans make the assumption that businesses grow linearly. This couldn’t be further from the truth.
From experience, there are two prominent patterns in how online businesses grow. The first is that there’s often a sequence of sharp increases followed by plateaus. Your revenue may not grow for four months, but then it might double in month five.
The second pattern is that online businesses often grow exponentially, not linearly. In other words, expect your traffic to compound like the interest in a savings account. When you hit a tipping point, your traffic and revenue will soar.
This is true because a disproportionate amount of everything (opportunities, revenue, brand awareness) goes to whoever is in the lead.
Google search rankings are a good example of this. If you rank #1 for a certain keyword, you will receive around 55% of the traffic for that phrase. If you rank #2, you receive around 13%, and in third place you’d be lucky to receive more than 8%.
The moment you jump from ranking second to first, you’ll see an exponential leap in your traffic and revenue.
7. To grow an online business, go offline
I want to wrap this post up on this point, which can be interpreted in two ways.
With the gift of hindsight, I’ve noticed something quite ironic about how online businesses grow. They often grow as a result of relationships and ideas sparked from conversations and experiences. Both of those are best achieved offline over a coffee.
The other side to this point is that you need to go offline and take a step back from your business once in a while to regain perspective. The most transformational week for my business last year was when I was on holiday in Morocco.
I didn’t do any work in Morocco, but the distance from my work gave me the clarity to make a handful of decisions that completely changed the company’s strategy.
Don’t be fooled into thinking that being online 24/7/52 is productive. It’s not. Even Bill Gates takes a week off every year just to think about Microsoft’s future. If Bill Gates can find time in his schedule just to think, so can you.
As an online entrepreneur, I’m still learning and making mistakes by the day, and I’m sure I’ll still be making mistakes in five years time.
The type and frequency of mistakes you make are kind of like hurdles in race. The more you learn, the less hurdles you have to jump in the race. The hurdles also become smaller and easier to jump.
Through a combination of learning which races to run, and improving your own skill, you’ll ultimately be able to achieve bigger things with more ease.