Do you ever plan to sit down at your computer and work on a project for a few hours with the expectation that you actually complete something when you are done? I cannot tell you how many times I have sat down to work on a project and after 3 hours I haven’t done anything productive. The only feeling worse than that is refreshing your stats to see that you lost money.
On the other hand, have you ever bought something (invested) with the very slim chance of actually completing the project?
I’m going to explain to you a few examples of things I knew going in that they weren’t going to be effective at making me dollars, so it just really didn’t make sense.
No Dollars? No Sense!
If you have spent any amount of time in any online business, you know all about the potential time wasters that “allow” you to avoid being productive. However, there are times when you are trying to be productive but you just make a stupid investment.
1. Really Stupid Website Purchase
During the spring/summer of 2009 I was looking to diversify my business. I figured that an e-commerce website would be a great solution. After all, I control everything (minus the shipping of the products as this was a drop-ship business) and could very easily retain customers due to the nature of the store. This was great when I was first thinking about it because having return customers that you could sell to again and again is much better than the typical affiliate model where the goal is to sell the customer once and be done. Here are a few reasons why this failed miserably, and how I could have avoided some/all of the trouble it caused.
What was I doing?
I was talking with the drop-shipper, and of course they said it was the time to enter this market and the e-commerce businesses are thriving. Well, ironically the support and upgrades that were promised before the purchase was made became an absolute headache after they received my $1,200 payment for the site.
- Failed to research the drop-shipper – I had no idea who they were, who they were associated with, or anything for that matter. All I knew was that one of their salesmen was discussing the possibilities and the market share I could grab if I pushed this opportunity the right way.
- I was dumb – Seriously, looking back I had no idea about anything. Not only did I not understand the industry, but I had absolutely no idea how e-commerce works. They had ‘people’ that would help with every step of the way, and I thought that was cool. Somehow, I signed a contract for $50/month or something stupid for a merchant account. Live and learn, read the fine print.
- Too much on my plate – This is one of my most common issues. I have a ton of great ideas and I want to start them all. Instead of building one out completely, I constantly start new projects which leads to the eventual failure of the ones I spend the least amount of time on.
In the end, this turned out to cost me $2,000+ with merchant fees, the cost of the site, attempts to sell it, domain fees, hosting, etc. Moral of the story: Do your research and make sure something you purchase is a project you want to work on, OR has resale value.
2. Attempting Non-Core Activities
When starting a business, it’s not out of the ordinary for a business owner to be the jack-of-all-trades. Design, development, marketing, advertising, accounting, and everything else. Once you reach a certain point, though, you develop a set of skills that you realize you can perform better than others. These must become your core skills if you want to continue to grow and become a truly successful business. At some point in time, you will need help with your non-core activities.
- If you can’t code, don’t – I learned this the hard way. I spent 4-5 hours working to code a simple one page website when I could have paid somebody or used DreamWeaver. When I started building websites 10 years ago, I used FrontPage or some other WYSIWYG editor. I didn’t have to learn HTML. Since then, coding has never been interesting to me, but I can do the basics. If you’re like me, you have 3 options: Buy a program like DreamWeaver, learn HTML, outsource it.
- Not an accountant? Why do your taxes? – I have mixed feelings about this one. Doing your own taxes definitely allows you to know each and every aspect of your business and where every dollar goes. However, do you know whether or not you are writing off everything you can? Are you sure you should be writing a certain item off? If you really want to do your own taxes, I would suggest spending an hour or two with a CPA anyways and asking them questions at the very least.
There are plenty of other examples, but I think you get the point. Build a set of skills that you can do better than the next person, and develop yourself and your business around that. If you aren’t doing that, you are simply sacrificing quality on your more talented skills, and also preventing yourself from being as successful as you can.
3. Opportunity Cost of Wasting Time
This is absolutely huge. Opportunity cost is not always money. Opportunity cost is what you sacrifice to achieve something else. For instance, instead of sleeping, you write a blog post. You may be tired the next day, but you were productive. Either way, the Internet can be absolutely terrible in terms of wasting time.
- Blogs – Stop wasting your time! 9 blogs out of 10 are garbage and will not offer you anything useful. I think I am different, but you be the judge. Either way, stop spending hours per day reading up about Shoemoney, John Chow, Problogger, or ppc.bz and what they are doing when you could and should be doing activities that can make you money!
- Forums – Same thing as above. There are exceptions though if you are actually posting to network and/or to solve an issue you have. Otherwise, stay away!
- Facebook/Twitter – Great tools if used properly, but an absolute productivity dump if not.
I’ve said that I didn’t start making ‘real’ money online until I understood that working was more important than knowing what everybody else online was doing. I strongly believe that and notice when I am working hard on projects rather than reading what other bloggers are doing, I make more money. One effective way to go about this would be to set a time during the day when you could spend 30 minutes reading up on the new posts from your favorite bloggers. This way you aren’t anxiously waiting all day for them to post, and you spend more time being productive.
Think About Your Bottom Line
I will preach this until I am blue in the face. Work on activities that you know will build you profit. Obviously this can be very difficult to gauge at times, but if you are an Internet marketer, don’t spend 40 hours doing your taxes when you could pay someone to do them for $500.
Ask yourself this: Will this decision make dollars? If the answer is yes, then it probably makes sense (given that it is legal and within your moral standards).