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.

The above title is reflective of my past week and also first written by Bilbo Baggins, a character in from the “Lord of the Rings”. During this past week I’ve been away on vacation and now I’m back again.....so it seems quite appropriate.

There’s nothing quite like a vacation to get the creative juices flowing. While having a really interesting conversation with my wife, Roselyn, I suddenly had an epiphany about the domain industry. It was like a light-bulb was switched on and so I quickly wrote it down so I could dig into it when I returned.

The next day I was playing a mindless game on my Windows Surface and again a great idea sprung to mind about how to extract additional value from domains. I went away and wrote it down next to the first idea so I wouldn’t forget about it. This continued to happen while I was away.

Vacations are more than just having a great time (which we had). They are all about refreshing yourself so that your mind is able to come up with new ideas, solve intractable problems and to really think without the clutter of the day-to-day activities. Even after only one week away I’m feeling refreshed and reinvigorated about the upcoming month.

So what’s happening? First of all, I’m heading to “The Domain Conference” in Fort Lauderdale this Friday. So if anyone is going to be there on the 9^th then I’d love to catch-up with you.

Once again, I have the privilege of sharing on domain monetisation. Trust me when I say that 99% of the material I’ll be sharing will be completely new. If the conference is anything like the last one, then it’s going to be outstanding for doing a lot of business.

Thirty-six hours after returning home from Florida I’m heading to Hong Kong for DomainFest Asia. Last year was a complete eye-opener to the Chinese domain community mindset and I’m looking forward to this one more than ever.

I’ve been invited to share a number of times and I wouldn’t be surprised if the conference ends up being one of those special events that will be looked back on as a bit of a bell weather for the domain industry.

So now you can see why “There and Back Again” is relevant for me this month. I’ll be heading out and returning and doing it all again. Although I’m sure the conferences will each be amazing what I’m really wanting to do is get stuck into some of the concepts from my vacation…..

So do yourself a favour, take a break. You may be surprised how you end up transforming your business.

In the last article I outlined a number of typical revenue leakage problems that cost domain investors real money. I also mentioned, from experience, around 10-15% of revenue is lost due to mismanagement. In this article I’m going to state a number of things that may be unpopular but nevertheless I believe them to be true.

For a start, generally speaking domain investors are very bad at managing their portfolios. There are exceptions to this rule but they tend to be few and far between. I believe the reason this is the case is domain investing seems really simple on the surface but as you dig a little deeper it gets more and more complex if you want to keep on top of everything and extracting the full value from your assets.

Many investors need to recognise what they are good at and what they aren’t. I’ve met some absolutely brilliant individuals that seem to be able to find the gold traffic domains but to ask them to change a nameserver is almost impossible. While other people are amazing at negotiating sales but once completed the actual transaction of moving a domain to the buyer is the last thing on their minds…..as they’ve already moved onto the next deal.

The problem with domain management is that it’s just not sexy. The mechanics of making sure domains are where they should be, nameservers are set correctly and you are actually collecting the cash requires an exceptionally detailed mindset.

There are some really obvious things that investors should do with their portfolios. For example, I’ve aggregated all of my domains to the registrar, Epik, as they provide an easy service for pulling all of the domains from different registrars back to them. It eliminates one of the possible revenue leakage opportunities….and I’m into that!

Next, outsource all of your domain management to a company and pay them a few percentage points of revenue. This is exactly what we do for a growing number of clients at ParkLogic. Sure, I’d love you to use our service but if there is anyone else that provides this high touch solution then feel free to go with them.

A good management company will mean you have a single nameserver to set your domains to and they will route the traffic to everyone else to optimise the best performers. They will also monitor things such as cNames being set correctly, domains are correctly installed everywhere and the payment details are set.

Ideally, you should provide them with complete access to all of your registrar accounts so they can migrate everything to a single registrar. A set of business rules can then govern monetisation, renewals and sales. They should also be the first port of call for any legal issues.

It then becomes the management companies task to ensure nameservers and all of the other little details are all set correctly. In fact, by paying the management company a percentage of the revenue they are incentivised to ensure that everything is correctly looked after.

Now you’ve completely simplifying your management down to a single contract and one relationship. You can then focus on what you’re good at rather than all the detailed mess.

It’s a radical approach but outsourcing has been adopted by industry after industry as it makes economic sense. This is exactly what I do with my domains…..typically speaking, I give them very little thought as there is a team of people that work every day on my behalf.

The mathematics is pretty simple. Let’s imagine that you’re earning $100 per day and the management company charges you 5% for their management services then they are essentially earning $5 per day. Last time I checked, you couldn’t buy a McDonald’s happy meal for that in Australia. If you earn less than $5 per day then you should do the management yourself, if you can earn more doing something else than outsource is the solution for you.

Here’s the problem with outsourcing. Many people like to fiddle with their domains and look at them as if they were their “precious” out of Lord of the Rings. Each domain has a little story they can recount at the bar over drinks with friends. Their domains are really “precious” to them but what they don’t realise is that in many cases their running a nice hobby, not a business.

If you’re one of these individuals I really do apologise for raining on your parade but seriously, you need to be treating your domains as a business and start becoming economically rational. I’ll be upfront in saying that I’m more in love with my bank account than any of my domains.

Whatever you do, stop trying to mess around with complex spreadsheets as you manage your portfolio and focus on what you’re really good at…..maybe it’s buying, selling or even building a business on one of them?

There’s a solid body of evidence that my cat, Pepper, completely rules the Gilmour household. Each morning Pepper is waiting outside our bedroom door with an impatient look on her face, demanding that we satisfy her need for food.

Cat owners all understand that their feline masters can be most petulant when it comes to the types of food they demand. In my case, Pepper has gone off the gourmet variety turkey dinner and is insisting on salmon.

If I behaved this way with my wife then it would be bread and water for me. As for Pepper, she now has us buying the salmon…..well at least until she gets tired of that morsel.

At the end of a long day it’s always nice to put your feet up and watch a little bit of television. I have to make sure that I don’t sit in Pepper’s spot on the couch or like Sheldon from the TV sitcom, The Big Bang Theory, she’ll pace back and forth until I move.

Once I’m resettled, she climbs up beside me and demands that I give her a scratch behind the ears. The demand comes in the form of a head-butt until I satisfy her itch. I could be in the middle of a great show but as her underling I must first comply with her wishes.

It’s at this point my other masters, I’m mean children, come into the room and calmly place a vacuum cleaner into my wallet to suck out everything but the lint. At least they give me a smile and thank me for the privilege of leaving me destitute, so I suppose all is good.

Just when I’m really enscounced for an evening’s entertainment at the end of a long week my youngest daughter (ie. Overlord) requests my attendance at the car to drive her to youth group. Sighing inwardly, I take off my moccasins, put my runners back on and head out into the cold night air.

Upon returning home my eldest daughter/master gives me a tongue lashing because I didn’t reply to her text message within the required two seconds. I don’t know what it is about the younger generation but they seem to assume that you’re dead if you don’t instantly respond by typing on a device meant for speaking…..I think I’m feeling my age.

So after settling back in my assigned spot beside my feline queen on the couch, I once again return my attention to the television, completely oblivious to the fact that my wife has been having a conversation with me for the last thirty seconds. I finally get the hint when I hear my name follow by “are you listening to me?”

For most guys this is a really difficult question to answer. If I say no, then I’m in big trouble for ignoring my wife even though I didn’t even know was there (which is really bad). If I say yes, then I have no idea what I’m about to agree to.

So what do males normally say, “Honey, can you please clarify what you mean again?” This provides us with a breather too catch-up on the clearly important decision that you’re about to make. After all, happy wife, happy life :-)

It’s at this point that I become distracted by the fact that I forgot to pause my television show and Pepper resuming her head-butt treatment. I then receive a text from my youngest daughter asking to be picked up because everything is finishing early and my eldest daughter picks up the remote, changes the station and sits down to watch something about “Bachelors”.

After answering my wife while I give Pepper a scratch I depart to pick up my youngest daughter. Upon returning, I excused myself, disappear into my study and buy a domain. Oh it’s good being free again!

Have a great weekend!

Revenue leakage mostly occurs when you think a particular setting for your domain(s) is turned on and it’s not. From experience, we have found that it’s not untypical to find that between 10-15% of the potential revenue generated for a portfolio is actually lost due to mismanagement.

So before you go and try to squeeze another few percentage out of your parking partner or broker can I suggest that you get your own house in order first. If you do this then I guarantee that you’ll discover a significant jump in revenue.

So what sort of problems can occur? The obvious one is whether the nameservers for your domains are still set to where you think they should be. I know that they are set but are they set correctly?

If you’re juggling multiple accounts at different monetisation solutions, then it doesn’t take long for a mess to be created and you have no idea what is set and why you set them. This is particularly true if you also have multiple registrars and have no idea which domains are actually at which registrar.

So out comes the spreadsheet with the mighty vlookup command and after spending a lot of time and effort (have you accounted for that btw) downloading lists of domains, correlating them with parking solutions you finally get around to checking the nameservers.

Now you have to find a program or service that allows you to do this on a regular basis. This wasn’t initially too hard until you discover that some of your more esoteric ccTLDs need to be setup in specific ways for them to be installed correctly….doh!

Finally, all of the data is in Excel and you begin cross referencing each of your domains to ensure they are where you think they should be. This is when you get a bit of a fright because domains you thought were pointing to one parking company are actually pointing to another.

Worse than that, there’s quite a number of domains pointed to your registrars parked page and earning money for them rather than you! Those thieves! You then remember that you were late with your renewal payment because of a friend’s wedding so the registrar actually wasn’t doing anything wrong by pointing the DNS to themselves.

Then you discover something really strange. Some of the domains that you knew you had added to your parking account are no longer there. This means someone else is earning money from the traffic! Now the parking companies are thieves! You then remember that you were interrupted by your wife for dinner just before you hit the submit button to add the domains to your account.

After looking a little more closely you know beyond a shadow of a doubt that a particular domain was absolutely added to your parking account. In fact, it was but you forgot to respond to the email about there being a conflict with another domain owner so the domain remained in their account.

A couple of months ago you read in a forum that a particular parking company seemed to be paying out more than others. In a flash you’d setup an account and added a heap of domains (luckily you’d remember to set the correct nameservers). You check the account, wondering why you haven’t been paid and discover you’d forgotten to setup the payment details and send in your tax forms.

So you’re staring at your spreadsheets and like the sun slowly sinking into the horizon three things float to the top of your consciousness. The mess in front of you is full of bad data and doing renewals is next too impossible – decision, renew everything just in case. The second is the problem is only going to get bigger the larger and more successful your domain portfolio becomes. The third issue you realise is this is going to be an ongoing battle and you’ll have to go through exactly the same cycle next month.

So much for having a nice passive income on the side from domains…..this is seeming like a bit of work. If you are really honest with yourself, you can probably relate to doing exactly what I depicted in the above scenario. Domaining takes work.

If you don’t believe me that revenue leakage is a big issue, then take a look at the charts below for a test conducted by a domain owner with a LOT of domains. I picked two out (there were many more) and changed the domain name (for obvious reasons) as they illustrate exactly why managing a portfolio is non-trivial.

The red area in the chart highlights the fact that the nameservers for the domains were suddenly pointed elsewhere. The client had no idea why this happened and switched the domains back. There were some cases where the domains were moved away, switched back and then moved away again!

So the question then becomes…..what’s the solution? I’ll dig into what I do in the next article.