I have a confession to make.
Over the last 6 months, I have started another company. I’ve been working on it, building it up, and expanding it. And in that 6 months, it’s truly taken off and is quickly becoming something amazing.
And I’ve got to be honest, it has grown a lot quicker than I had ever expected it to.
Starting out with just a few thousand dollars, our main branch is projected to do around a million dollars in sales this year.
This does not even include our new venture – an entirely new brand we’re launching that is going to one day dominate the industry we’re working in.
Unfortunately I can’t talk too much about that right now due to agreements I have in place, however, I have been named CEO and I assure you that one day you’ll hear all about it.
Anyway, running this new business and launching this new brand has shifted my perspective about blogging, and has truly taught me a lot about this profession we all know and love. I’d like to share with you some of the lessons I’ve learned, which I believe can make us all better bloggers, marketers, and entrepreneurs.
1. A Lot Of It’s The Same
There seems to be a lot of misconception that running an online / digital business is somehow different than running a business that sells physical products.
That’s simply not true.
Most of the same basic business principles that have been in place for hundreds of years still apply to any sort of online business, regardless of whether you sell physical or digital products, services, or even other people’s products or services as an affiliate.
You still need to…
- Identify market demands, and base your company around a niche that fills that demand.
- Put something out there into the marketplace.
- Network, drive traffic (attention) to what you have to offer.
- Know your numbers.
- Make investments, put in tons of hours of work, and make the most out of all of your resources.
No, as you’ll learn in my blogging course, blogging isn’t just about writing content and hoping people will show up and read it. You need a system in place to create something of value, drive attention to it, and then get those people to take a given action (such as buying the product, hiring you for a service, or signing up for your email list.)
2. …Without All The Extra Bells And Whistles
I am so thankful I got my business experience started with blogging.
Logistics wise, there is so much complexity in this new business that I know I wouldn’t have been able to start it earlier on in my life. I have always been fairly disorganized, and there are a million and 1 things going on at once.
Money is already reinvested somewhere before it comes in. We have overhead costs, employees to pay, new areas that are being invested into, and I’m the one in charge of managing it all.
For the new brand, I’m working with Chinese manufacturers, dealing with laboratory testing facilities, and trying to understand the 10,000 regulations regarding importing the specific type of product we’re producing.
The bulk of the main company right now is basic arbitrage – buy products in bulk from wholesalers, and sell them for more online. Sounds simple, right?
I am all about efficiency, and I’ve developed proprietary, unique systems for storage, shipping, and reordering. Without it, there’s no way we could be shipping 500+ different items in one day.
I’ve also developed a ‘just-in-time’ system that tells us exactly how many of each product to order so we never run out of stock, but also do not have money tied up in excess inventory.
These systems are vital for scaling and are our main competitive edge over other sellers. However, with so much going on, it’s easy for little mistakes to happen.
Products get lost. They don’t get shipped. Our repricing software ends up selling products at a loss. We miss budgeting an important expense. Things get broken.
Businesses built around blogging can get pretty complex, but most of that complexity can be managed with tools or automation. I am so much more thankful for the systems I have set up here for James McAllister Online, which have allowed me to focus on other areas of this business that need it.
3. Scaling Is Important
I would have never started this new product brand if I did not know with absolute certainty that it could grow into a $100 million company of its own.
Scaling is so, so, important.
Believe me. I started a blog in a market that didn’t have scaling opportunity. I hit the ceiling, the max I could ever earn with it, and had to abandon it because I knew there was greater potential elsewhere.
This is actually why I started James McAllister Online – despite knowing how competitive and difficult it is to take off in this market, I knew it could be scaled practically infinitely.
When choosing the market for our new brand, I deliberately chose one that could start small, but branch out into many other different areas, offering more for sale than just physical products.
After all, putting in so much work and hitting a ceiling is something you do not ever want to experience. It’s incredibly disappointing.
4. Keep Track Of Your Freaking Expenses
Do you know how much it’s costing you to run your blog on a daily, monthly, and annual basis?
When you combine the costs for your web hosting, domain renewal, email marketing service, tools, subscriptions, marketing budget, so on and so forth, what’s that exact number coming out to every month?
That’s the number you need to surpass in order to make a profit. And you have to know this number by heart.
If you don’t have accounting software to take care of this, at least keep a spreadsheet that tracks each individual expense.
Then, it’s important to regularly go through and eliminate non-essential expenses that aren’t yielding you a profit. Put this extra money into other areas of your business that will make more of it.
Accounting is the one skill many small business owners desperately need, yet often fail to have. It’s not flashy, it’s not fun, it’s not exciting, but it’s vital to any well-run business.
5. Reinvest As Much As You Possibly Can
To date I have not pulled out a single cent out of the company. No distributions, no salary, nothing.
This is the only reason we’re growing so quickly.
Every cent is reinvested into developing systems to improve efficiency, more inventory, and other measures to scale (including this new brand.)
I’ve noticed that many bloggers have a deathly fear of spending money to grow their business.
What many people fail to realize is that nothing you do in blogging is free. It either takes your money, or it takes your time.
Calculate the value of your time. If you can get something done cheaper by paying for it rather than doing it yourself, than obviously the logical thing to do is to spend the money instead.
Here’s the thing. You can scale your money, but you can’t scale your time. You will never have more than 24 hours in a day. If you really want to scale your company, scale your income, and beat your competition, you need to reinvest back into your business.
There are lots of ways to do this. Paid advertising. Tools. Services. Investing in your education by picking up one of my training courses.
If you really want to grow, hold off on the distributions for a while, and spend that money on your business instead.
6. Debt Is Not All Bad
In my financial independence course, I talk a lot about debt.
The truth is, there is such a thing as good debt, and such a thing as bad debt.
Most people believe all debt to be bad, but this simply isn’t true.
Debt can be a good thing when it’s paid for by others, or when it brings you more money than what it costs you.
This business has been running on debt since the beginning. We spend the money before it’s in and make all of our purchases on credit. This allows us to stay a month ahead in terms of growth, while also reaping the 2% cash back rewards our credit cards offer.
However, we do not carry a balance and pay our credit cards off in full out of the money that comes in.
Where does this apply in blogging?
If you have a system in place that is making you a profitable return after expenses, then the logical thing to do is to put as much money as you can into it. This includes taking on debt, if you’re sure that the debt can be paid back without making your system unprofitable.
Higher risks do tend to come with higher rewards, after all!
7. Internet Marketing Is A Great Business For Anybody
I think building an internet marketing business a great choice for everybody.
Not only is the potential there to build an incredibly large company, but it’s a lot more straightforward and far less risky than many of the other types of businesses one could start today.
After all, it can be started for next to nothing, and you don’t have to deal with the troubles of this type of business (like having tons of money tied up, or dealing with cutthroat competitors who are actively trying to shut you down.)
Internet marketing / blogging also teaches a lot of important lessons that can apply to other types of businesses that you may wish to start in the future.
When I first started blogging, I was shown firsthand the brutal reality of business – it’s tough, and you have to adhere to market demands to succeed.
No amount of ‘wanting it’ or ‘passion’ would make people come to my website and spend money.
When I began treating blogging as a business, I started seeing results. And all of the same basic principles apply with this new company too.
I am so thankful for the experiences I’ve had blogging and without them, I wouldn’t have near the business knowledge I have today. One of the best ways to learn something is by actually getting out there and doing it, and blogging is a great way to build a real web business.
Because of the potential that’s there and the fact that it’s fairly straightforward, it’s a great business option for beginners and professionals alike.
I am so excited for what lies ahead in the future, and I have no doubt that each company I run is teaching valuable lessons that all help each other.
Rest assured I’m going nowhere with James McAllister Online – I will continue being just as active as I ever had been. However, the growth of my other company is unignorable, and I will be spending a lot of time there as well.
Whatever happens on that side of things, I hope I can bring it over here to you and bring us all up as well!
– James McAllister