Does your business model stack up?

Money. Let’s be honest here - unless you’re plugging away at your website for purely personal reasons then your website is all about money. At the very least it is a shop window. At the most, it actually is your business. What sometimes surprises us are the companies who contact us with a business model that won’t fly without serious investment.

Here are a few models for you to consider.

Selling Advertising

On the face of it, selling advertising space on a website is easy money. A few pounds a month or a yearly fee in online advertising must be worth it to another web business looking for more traffic right? And more links means better rankings in Google remember?

But, if you’re looking to sell advertising on a serious income-generating basis you need to have something concrete to show potential advertisers. If someone approached you with an advertising opportunity, you’d want to know how many people it would reach and who else advertises with the company before you even get to the cost.

A site with a million proven visitors a day can easily justify selling advertising slots. A website with 3 visitors a week can’t.

Making it work

If you want to sell advertising, then you’ve got to invest serious cash in building high volume, relevant traffic. Make sure your site targets a niche, add plenty of value to the site through expert content, feature-building and creating associations with other authority sites. Expect it to take anything from 6 months to a year to build enough traffic to make your advertising slots sellable.

Directories

Put simply, website directories don’t work without the backing of a massive old school organisation such as Kelly or Applegate. Google has been finding ways to identify and suppress directories for a long time now. All their research suggests that people who find a directory through a web search are disappointed - because they expect Google’s search results to be a directory in themselves. As a result, getting a pure directory offering anywhere near the top-end rankings is like the 13th labour of Hercules..

Making it work

Make your site an information resource first and foremost and have a directory as an ’added value’ feature. This means (and you may already notice a theme here) adding tonnes of content and interest to your site that someone would find engaging and useful and that potential directory-entries would be happy to be associated with. If you buy placings with AdWords, your expenditure is pretty likely to outstrip any revenue you gain through directory listings. Be prepared to sink a lot of capital and time upfront before you see any returns.

Selling X, Y (or even Z!) Online

This often seems like the biggest no-brainer of all. You’ve got access to some low-cost stock - perhaps through a contact in the trade - and you’ve no way to sell it. Of course, a website is the logical way to go. Even a high-end website with tonnes of bells and whistles is going to set you back less than buying a shop - and you can get orders from anyone on the planet!

Of course, this presupposes that anyone is going to visit your website. A website without traffic is really no better than having a shop on a cul-de-sac in a quiet suburb of a depressed town… just a little cheaper (and easier to get rid of.)

Making it work

In the short term at least, you need to look at paid search engine listings through a pay per click advertising system such as AdWords. It can be expensive - but if you employ an expert to manage the campaign it can be excellent value and generate you real profit. In the long term, investing in content, adding value to your site as an information resource and building links with other relevant sites is the route to take.

Today’s Moral

Before you even begin your online business think long and hard about what’s going to make you money. If your first thought isn’t “visitors to my site” then frankly you’re on the wrong tracks. Whatever business model you have, be prepared to invest heavily in generating traffic. Do this, and you can turn your website into a profitable revenue stream - and who knows, maybe that Caribbean Island will come within reach…