If you’re a frequent reader of Tyler’s blog, you’ll know that Tyler is a big fan of Texas Hold ‘em, online poker, and casino gambling in general. This is all great stuff and I really admire all the pro gamblers, but this is definitely not something I would want to get into – mostly because I’m so bad at it. Sure, it can be a lot of fun but I basically go in setting aside a certain amount of money, knowing for a fact that I’m most likely going to lose it all by the end of the night.
Unfortunately, a lot of webmasters, bloggers, and Internet entrepreneurs go into business with this same mentality. “Oh, I’ll just set apart X amount of money, try doing what everyone else is doing, and see if I can make some money!” This thought process is extremely lazy and almost guaranteed for failure in the long run. The problem is that luck can never be replicated and if you rely on it you are bound to be knocked down and end up broke. Going into an online business without the proper background information, set plans and goals, and risk management strategies is like going ‘all in’ on a pair of 2′s in poker. Sure there’s always luck, but your chances of winning are slim to none. Would you bank on those odds? I wouldn’t. Plus, there’s no bluffing in business.
So if you want to increase the probability of success in your online business, don’t rely on luck. It’s usually not on your side. Rather, let’s look at some practical methods to apply to your businesses and websites.
Don’t Jump on the Bandwagon
So many people go into industries or niches for their websites just because everyone else is doing it and making a lot of money. Unfortunately, by the time you hear of such stories, the market is already saturated and it’s going to be much harder for you to grab a piece of the pie. Just because something is popular now doesn’t mean you should jump on the bandwagon and join in. Remember the dot com crash of 2000? I know a lot of people who invested in tech stocks during this time just because everyone else was making money off of them. Sure it seemed great at the time, but everything inflated and eventually burst. You don’t want to be in this same situation. Don’t do something because everyone else is doing it – most of the time it’s not the optimal opportunity.
Research, Research, Research!
Rather than being part of the bandwagon, you want to be a leader. Research niches and topics that are you are interested in. Read the news and see what’s happening. Apple releasing a brand new product? Try to think of a way to profit off of this before anyone else does. Don’t be lazy. By doing a lot of extensive research, you’ll learn how to think for yourself and be at the forefront of new ideas for online business. Try to capitalize on people’s needs and wants and looks for markets that are currently under-served.
Revenue – Expenses = PROFIT!
Does that make sense to you? It’s basic accounting but I am absolutely amazed how people simply disregard this basic rule in running their business. Would it make sense for you to spend $20 per lead while selling 20 cent pencils? I know that’s an extreme case, but make sure you work out the finances before running any kind of operation. The more profit the better.
Spread Your Risk
You’ve heard this many time I’m sure. “Don’t put all your eggs in one basket.” From a risk standpoint this makes sense. You don’t want to rely solely on Google Adsense for all of your revenue. What happens if you get accidentally banned for invalid clicks? You’ll have to declare for bankruptcy and shut down. Make sure you have multiple options and sources in your business. This means multiple income sources, websites, suppliers, web hosts, backups, etc. Be ready for the worst.
So there you have it – just a few concepts to help you manage risk in your online business. Remember that Internet entrepreneurship can be made a lot easier if you take it seriously and meticulously calculate all possible outcomes and scenarios. Don’t be a casual gambler, be a pro – then it’s not even gambling at all.