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Building an online business - You need to branch out - Part 5



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Building an online business - You need to branch out - Part 5

Building an online business is never an easy thing to do, but it's possible with dedication and drive.  You need to know what you're doing and when to do something.  If you're attacking 100% of the time then you're likely to fail most of those times since it's not always a smart idea to go in full blown every time.  What you'll need to do is strategically attack certain parts of your business' growth and those parts are: Sales, Partnerships, Expansions and R&D.

With these 4 sectors being focused on when you want to branch out, you're going to cover your own back if something does end up going wrong.  You need your profits to come in before anything else, you need a good partner to help you out when the going gets tough, you need to expand in order to target different markets and you need to be running some sort of research and development as early as you can in order to get the ball rolling on another profit stream later on down the road Building an online business - You need to branch out - Part 5

In this discussion I'll be covering the reasons why you'll need to branch out if you want to be even more successful when it comes to running your online business.

So let's get to it Building an online business - You need to branch out - Part 5


Your Sales:
When it comes to building an online empire, you need to be making money first before you can bring on a good partner, expand and get into R&D.  I say this because you simply can't afford the other 3 things that you need to attack if you're not making any money.  Sure, there are some people out there that are at different stages of their business and are saying "I can already do R&D so this doesn't pertain to me!" and that's great and all, but we're talking about building a business, not one that is already built lol.

Building up your sales is the first thing you need to work on before you go on to the next step which is bringing on a partner.  Sure, you could start with a partner, but that doesn't always work because you may have different ideas.  So I always recommend that someone start off by building the online business themselves at first, then bringing someone in.

So back to sales...  If you don't have the money coming in, don't go to the next phase because it will start to eat into your profits and you could eventually go under.  Focus on how much money you're putting into your inventory, design, services, etc. and figure out how to increase your conversion rates as much as possible.  If you have done everything you possibly could have and you're still hitting a wall, try bringing in a consultant to let you know what else can be done.  It's always good to have an outside perspective on your business because they will usually see something you've missed.


Partnering:
When it comes to bringing on a partner, you need to be very selective since you'll be sharing everything with them.  You may not do a 51/49 split or even a 50/50 split with them, but if they're partnering with you and your business, they will own some portion of it.  You can actually work something into the contract saying that they will get 10% of the business in the beginning and 10% more for hitting certain milestones.  You can cap them at 49% so that you still keep controlling shares, which is what I would suggest to be the highest percentage you give away.  If you give away 50% of your business, your partner can call the shots or stall you out in your own decisions.  If you give them 49% of your business, they can't argue or stall out your decisions since you own the controlling shares.  They will still have to come to you to make a business decision, but it won't make it feel like you're their boss.

When selecting a partner you will need to fill some voids within the business.  If you have a background in programming, design and databases then you will need to bring in someone that has a background in marketing, sales and business management.  This will allow you to focus on the website itself and your partner can work on the business side.  It's a great partnership to have when someone fills the voids, which are skills you don't have, to make the business better Building an online business - You need to branch out - Part 5


Expanding:
A good business can turn into a great one by expanding.  This could be moving to a bigger space and bringing on more help to setting up new sectors of your current business in order to target different sub-niches of your main niche. 

If you're moving to a bigger location, you will need to have a need for it.  If you simply want to move to a bigger location just so you can hear your voice echo off of the walls, don't do it.  You'll just be wasting money that could have been better spent in other areas of making your business more successful.  If you're expanding your website to target different sub niches, make sure you're not over extending yourself and doing every sub-niche you can think of.

A good example of a sub-niche would be if you had a website that focused on dog nutrition and then you started to expand into dog clothing.  They're related, but dog clothing doesn't relate to anything close to dog nutrition.

I would only expand into 1 or 2 sub-niches at a time and build them up.  If you do more, you'll have more work piled on top of what you're currently doing, and you may just burn out quickly.  focus on a couple sub-niches and make them profitable.  Bring someone on after they are profitable and expand again to new sub-niches.  Rinse and repeat until you have every single sub-niche bringing in money, and you'll be a happy camper Building an online business - You need to branch out - Part 5


Research and Development:
When it comes to building your online business, or your online empire, you will definitely need to focus on your own R&D.  You will need to be working on side projects that are at least semi-related to your main business and then building them up until they are profiting.  At that point, you can then bring on new staff members in order to help you build your new projects even further. 

After you have a few different projects that are successful and running under you main business, you will have multiple revenue streams coming in.  This is the best case scenario of course, you won't always be successful with your R&D projects and they might crash and burnt.  The few that do make it to profits will need to be nurtured in a way that you can build them like independent businesses, but they are actually all sending profits to the same bank accounts lol Building an online business - You need to branch out - Part 5  Eventually you can make them independent businesses and have the main employees run them as partners, but that's up to you.  You can keep them under one business name or you can branch them off even further to make their own companies, in which you'll be controlling partner of Building an online business - You need to branch out - Part 5



In Conclusion:
You can't take many chances when you're starting off, so don't.  Wait until you have profits coming in from one steam and then start taking steps forward.  Find a good partnership for your business, which could take some time to do but worth it.  After you get a good partnership up and running you will need to work on expanding your business to make it easier to run.  When it's easier to run, you'll want to focus on some R&D projects and see what takes root and brings in some profits.  The ones that bring in profits can be built up and turned into their own entity or you can keep them running under your original business name Building an online business - You need to branch out - Part 5



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Razzy

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overcast
You have explained things very well. But the part about expansion and scaling. I think many business gets stuck into this part. And it takes years to manage those things. I think some of the time business may not profit. And we have to understand that part and branch out of it. If we can do that effectively then we can sustain with that business. Not a lot of people understand this. And often this ends them up on lot different way. So on that note you can see that online business has to be taken care of with some assumptions and have to validate the assumption fast before reaching big failure.



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Tronia
Haha, that's what I was about to comment on as well. I see so many small businesses and brands getting too focused on scaling and expanding. There isn't any need to rush this process because if you do it badly, it can make you lose a lot of money, effort and time. It is far better to take it nice and slowly - set the whole plan ahead and only when you're big enough to expand. Don't just do it because you read that you should.



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overcast
I think that is more like "Shiny object" effect. We see other people scaling with their business. And we attempt to do the same. But in due process we have to learn to focus. And that's how the things are going to change in due time. Another thing is that online business are not easy to scale as they say in their success story. People often fall for another person's reel for their own daily steps. That's something I have learned for sure.



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Corzhens
With the growing businesses of some fast food chain here that they are allowing the franchise of their brand, so many have followed in the assumption that it is an easy way to grow. But so many have been waylaid with that idea because branching out is like putting up another business. The only difference is that you already have a pattern of your store or office but the market is not the same as what the main branch has. If there is a failure in market study then that is the letdown.



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overcast
I think with fast food or anything in food and logistic industries is the man power. Most of the work being done with the fast food is through humans. So it's reasonable to make sure that the business is properly done if there is a process. So for those who are into this for food specific business to have process and people properly handled.



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Pixie06
Being an online seller I agree that research and development is really important. I have been quite successful as an online seller and can say that my business is profitable. I am currently developing some new products which I am planning to sell soon. Concentrating on only one product line is not advisable. However, it took me a long time before I could develop some new products. It is not really that easy. When it comes to partnership I am against it. I had some bad experience and I learnt from it. I prefer to conduct my own business.



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Corzhens
In the usual scenario, a business starts small and grows big as time goes by. With the expansion, I think diversifying the business is a good idea like in the example of dog nutrition and dog clothing. I can relate to that because I am a dog lover and my plan of a future blog is about pets. That’s one advantage when your site is already popular that you already have a market base, expanding your business is easier because of your existing clients.



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