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Focus on Consistency

Focus on Consistency

I find that many people complicate running their businesses enormously. When you really think about it, it’s actually pretty easy to run a successful business. The revenue needs to be consistently more than the expenses…..seems obvious but given the fact that around eighty percent of businesses fail in the first two years it’s clear that the majority of people get on the wrong side of this equation.

The key word in the equation is “consistently”. Bringing consistency to your business revenue line provides you with an ability to plan versus one that is of a boom bust nature. One of the difficulties that many domain investors have is they have the elusive carrot of selling a $20K domain name tomorrow always in front of them while they starve now. There is no consistency to their revenue.

How can you get consistency to your revenue? One of the things that many customers like is consistency in product they are about to purchase. In fact, the whole essence of branding is all about consistency.

Whether you like them or not McDonald’s restaurants have done an incredible job to bring consistency to their product line the world over. I can go to a McDonald’s in Tokyo or New York or London, order a Big Mac and they’ll all be the same. It’s to the extent that financial analysts often quote the “Big Mac” index as a way of measuring the true buying power of a currency.

When I was away this past week my wife and I went to a restaurant and the food was terrible. It was so bad that Roselyn decided to write a review using an app on her phone. She’s never done this before so it was a bit of a new experience for her.

After writing the negative review she then looked back at what other people had written…..they were all terrible! So before going to any restaurant we are now checking what other people have written and to see if there is a negative or positive consistency to the comments.

Another way to bring a level of consistency to your revenue line is to examine your price. For example, is it better to sell ten domains at $1,000 each or one domain at $10,000? The answer to this question really depends on things such as your stock levels, need for cash, opportunity cost and appetite for risk.

Generally speaking I personally would much rather sell ten domains at $1,000 each rather one domain at $10,000. The reason is the levels of risk. If I lose one sale at $1,000 it doesn’t impact the consistency of my revenue line nearly as much as losing a single sale of $10,000.

So once you have the right price and right product with people buying all you have to do then is scale. If you are selling hamburgers this will mean you need to refine your processes of making them to minimise and control the cost side of the business. In the case of domains, how can you get your domain list in front of as many prospective buyers as possible for the least amount of effort.

There’s the obvious solutions of ensuring your domains are in all of the marketplaces but there are the less than obvious options as well. Such as, build a page with all of your domains categorised and priced. Have the for sale link traffic from parked pages point to your custom page to increase the chance of selling your domains versus someone else’s.

If you get the maths right, then you should end up with a sales revenue per thousand visitors number. All you then need to do is get the right visitors to help increase your sales potential. A little experimentation with some advertising may be in order…..but whatever you do keep track of your expenses.

If you have a consistent revenue line and a consistent expense line that is less than the revenue, then you have no choice but to make profit. Profit then provides the opportunity for reinvesting into additional stock, better processes or experimenting with different sales channels (eg. Facebook advertising).

If you aren’t making any profit, then at some stage you will need to make some drastic decisions or someone else will make them for you.

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Friday, 27 April 2018