The Making Of An Online Business – Partnerships

This is the 5th article of the Making Of An Online Business series and it will deal with your partnerships. After talking about your projects, teams and money, it’s time do dig a little on your alliances, associations, or, in other words, partnerships.

If you came here directly I encourage you to read the rest of the articles in this series by clicking on the links below:

What’s A Partnership?

A partnership is at the organizational level what your team is at your human resources level. As the words imply, it is a resource, a complementary resource that will provide more value to your business.

Generally speaking, a partnership is an alliance in which each part is providing specific values to the other parts. It is based on trust, acceptance and common goals or resources. A partnership is a temporary association of two or more organizations in order to attain a specific goal faster or with fewer resources consumption.

Why Partnerships?

I will say this again, until it will be really clear: online is the most dynamic business context ever. Things are happening lightening fast. Like really lightening fast. Keeping the old individualistic approach of “I’m the best in my field” won’t work anymore. Because you can’t be the best in your field anymore. You can only offer a slightly more interesting perspective than your competition, and even that only for a limited time.

If you want to increase your market penetration, you have to let go a little on your ego and trust on partnerships. I’m not saying to rely exclusively on partnerships, but treat them at least as necessary tools for expansion.

The real trick here is to chose your partners extremely carefully. They must operate in the same business context as you, but they don’t have to make the same things as you. They will be, of course, your competition, in this case. I can’t believe how many people ignore this simple and apparently dumb rule when they are going out for partners. And they do that by either trying to partner with the competition (not a bad thing for a desperate business, by the way) either by going for partnerships way too far from their audience.

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The Making Of An Online Business – The Money

This is the 3rd article from The Making Of An Online Business series, and it will focus on the money part. If you’re looking for a way to monetize your project, I covered this topic in the second article of the series, about creating and maintaining online projects, which you can find on the link list below.

This post will deal with my way of interacting with money as an online entrepreneur. There are tons of other blogs or courses from where you can learn the basics of money management, so don’t expect to find that kind of information in this article. Instead, expect to find some fresh approach to money interaction as a whole, applied to an online business.

If you came here directly I encourage you to read the rest of the articles and the summary by following the links below:

Start Your Own Business
The Making Of An Online Business – The Series
The Making Of An Online Business – The Projects
The Making Of An Online Business – The Team

Money Is Hot

From the early beginning I will tell you that I always felt money is hot. Meaning I can’t really keep it in my hand. In fact, money was so hot for me than I rarely saw it in big piles. Every time I had a serious amount of money available I was reinvesting it like the next second. Please note the difference: spending versus reinvesting.

And it was a good decision. By reinvesting the money in my own business I accomplished at least 3 good things:

1.  I always had new projects coming

This is crucial in the online. As I wrote before, online has the highest availability degree you can imagine, higher than any other business field, but it has also the tiniest loyalty mark, so your audience can be stolen away almost instantly. You have to be able to offer new things, you have to innovate, to re-create stuff. And fueling your R & D department with generosity is the easiest way to keep you on top.

Don’t expect that any projects you launch to be a success. But do expect to learn from any of your projects, both successful or unsuccessful. Spending money on new projects is like paying for your own education.

2. I soon learned that money is a resource not a goal

Too often money is seen as a goal. Blame the modern society, consumerism, your mom and dad. You can’t deny that, everybody judge success by the amount of money you have in the bank. But if you have the courage to not pile money out of your business and reinvesting it back, treating it like a resource, you will grow your business. And in the end that’s the only thing that matters.

You can win a lot of money out of one project and then get scared not to loose it and stop reinvesting it in new projects. Big and dumb mistake. Money is not the stake, growth is the stake.

3. I always had to closely watch the money flow

Starting new projects constantly makes for a great financial discipline, because you really have to know all the time if you do have enough resources to keep you going. I learned to maintain a constant money discipline, and that thing is benefiting me now tremendously. I always know how much money I have, even if you wake me in the middle of the night.

Knowing how much money you have, how much money you can spend and how much money you will make out of something has nothing to do with scarcity. It’s a transparent mindset that keeps you connected. It’s like always knowing your resources and potential and avoid walking on thin ice.

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The Making Of An Online Business – The Projects

This is the second article in the series about managing an online business. It will focus on what you actually do in an online business, how can you measure it, the various stages of each project and how you can monetize your work. If you came here directly you can go back to the summary of the whole series or you can start with the first article which deals with starting your own business.

Please keep in mind that this post is rather long, more than 3000 words, so  make sure you are away from interruptions when start reading it. If you can’t read it now, you can bookmark it and come back later.

Online Processes

More than in any other business, in the online universe, a product (i.e. a website) is more like a process and not like an object.

If you are in the furniture business, you’re selling objects. A chair, a table, a couch. Every once in a while you change a little the design, but you are largely selling objects.

In the online field, you sell things which are continuously shaping. An online service is by definition dynamic. Your websites need continuous upgrade, otherwise they will fade as importance and eventually lose their audience.

The online has a high availability, which means your potential audience is huge. But the online has also a high volatility degree, which means that the potential huge audience is very easy to be moved toward your competitors.

Online Projects Metrics

You need a way to quantify the behavior of your websites in order to measure their success. Otherwise you’ll be lost in the jungle of millions of other websites, portals, forums, blogs or online shops. I worked with only three main online project metrics:

– traffic, the total number of users that accessed that website in a given time interval
– money, the total amount of money that website produced in a given time interval
– resource consumption, how many resources (people, money, assets) that website consumed in a given interval.

Although it seems pretty straightforward, the way in which those three metrics can combine is infinite. You can have projects with minimal traffic but with good money flow in. You can have websites with little or no money in, but with huge traffic (I guess the most famous example is YouTube in this area). Or you can have websites with zero resource consumption (auto-pilot websites) with no money in and just a decent traffic. but still consider them as successes. Each combination of those factors can play a role in the bigger picture and you must not overlook any possible outcome.

Now, let’s take each metric and see how you can interpret it.

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Start Your Own Business

start your own business

Ten years ago I started my own business. At that time I felt this was the best decision ever in my entire life. Ten years after I still feel the same with all my heart. Having your own business is one of the most challenging situations in which you can put yourself. And I’m not … Read more Start Your Own Business

Creating Value

Have you ever thought about the values you create? Ever crossed your mind to sit back and look out what exactly you give to the outside world in exchange for what you receive? Because this is how we, humans, are functioning: by a continuous exchange of values. The most popular value exchanged being, of course, … Read more Creating Value

Entrepreneurship As A Personal Development Tool

10 years ago I started my own business. I didn’t exactly know what I was going to do, it was something mainly related to the online thingie that was starting to rise at that time. Nothing clear in terms of business plans, financing, strategy or management but with a tremendous drive to succeed. I guess … Read more Entrepreneurship As A Personal Development Tool

Handling Financial Pressure

Now, more than ever, a lot of people are faced with financial pressure. This is what a crisis should be about, anyway. Companies are cutting jobs, people are losing houses and the global economy seems to be falling down. I’m not going to talk about the reasons for this crisis, as I will try to better focus a little about the immediate reality and how I faced similar situations.

Being an entrepreneur is something that, among other interesting stuff, is giving you a lot of financial pressure. Getting from a monthly pay check (in exchange of some time spent in an office) to a complete reverse of the situation, when you have to take your money from the clients (if you do your job well and on time), huh, that’s quite a roller-coaster. It’s a serious comfort shake and it requires a lot of extra energy spent on the financial side. And it is not only your money that’s on the plate, you’ll need money for office rent, for utilities like electricity, internet access, for advertising and promotion and so on. Not to mention your employees or partners. You will have to manage a whole new level of cashing and spending. And believe me, this is a tremendous financial pressure.

When I started my own business, 10 years ago, I faced this like a train hitting a wall. Although I managed to do pretty well, in the first three years I barely knew where my pockets were. They were most of the time empty. Money didn’t have a chance to settle there. Even if I managed to do a decent living per month, there were increasing expenses that I had to face the next month. It was really tough. That was a time when I really had to learn a lot about handling financial pressure.

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Being Successful

being successful

As strange as it might seem, success, one of the most popular concepts in our modern world, is the most difficult thing to understand for many people. Maybe that would be the main reason for not getting it at all? Maybe because the core definition of success is so foggy we have a hard time … Read more Being Successful