The Low-risk Online Business Challenge
When pondering my goals for 2015, I knew I wanted to start a new business that would bring in dependable income every month, since right now my income is very scattered through consulting and digital products.
Also I know that a lot of the people who follow the blog are either wanting to start a business but don’t know where to start, or they have already started and are looking for more growth, so that’s where The Low-risk Online Business Challenge comes into play.
I’m building this business from scratch, which is a perfect opportunity to share the journey and get others inspired. I also want to make this process, or at least most of it, replicable, so I’ll do my best to provide updates on how I make decisions as well as what goes well and what doesn’t.
You can follow along with my progress, methods, and processes via this blog and the newsletter (sign up here if you haven’t yet) as I build it from the ground up. Strategic Sauce is turning into a really cool community of like-minded people with all different kinds of skill sets looking to start and grow their own businesses to experience more of what life has to offer. The saddest part is that while I’ve spoken to and learned from many of you, most of you have never interacted with one another! I created a private Facebook group for anyone who wants to join, just click the link below, and I’ll approve your request as soon as possible. Facebook pages are becoming more and more difficult to have actual conversations, so this is my hack around that.
Request to Join the Group Here
It wouldn’t be much of a challenge without rules, so I’m setting some guidelines, timelines, and goals to make it more interesting.
The Low-risk Online Business Challenge
The challenge is to build a low-risk business from scratch that makes at least $1,000/month within in 6 months.
The Rules and Guidelines
1. I can’t spend over $500 of my own money, including any hired contract work (money earned from it and reinvested along the way is okay). I want it to be profitable quickly, and I want to also make sure I don’t invest too much money upfront before I know it’s a profitable idea.
2. I can’t work on it more than 20 hours/week on average. I say on average because who knows when crunch time will happen, and I may have to work more than that, but if it does happen, I’ll offset it by working less the next week. I’m setting a specific cap on hours because if I don’t limit it, my productivity and efficiency will drop. It’s a form of self accountability to make sure I’m making the most of my time.
3. It has to be a low-risk business idea. What I mean by low risk is that I stand to lose nothing or very little by attempting it. I don’t want to end up with 500 units of something physical that nobody buys, and before I know it I’m out a thousand dollars. Nuh uh. None of that.
4. The official end date of the challenge is July 5, 2015.
For the Sake of Transparency
Before I really dive in, I want to disclose that I already have the idea (like I said, I’ve been thinking about this a lot), and I already have a basic website set up with a logo. Total time I’ve put into it so far is about 20 hours. I’ve put about $50 in so far to get basic web hosting and a domain through GoDaddy.
Call me a cheater, that’s fine, I went ahead and took a few days off the 6 months to make up for it.
I’ll be blogging an occasional newsletter with updates and specifics tactics I’ve tried.
If you have any questions for me, just leave a comment below.
Alright, I’ve got a lot to do. Off we go!
Month 1 Update
After 1 month of getting started, I have to say it’s going pretty mediocre so far, though I’m not discouraged just yet.
The type of low-risk business I decided to start is a site that promotes exclusive deals on awesome fitness products. My target market is men 18-34 who are into weight lifting. Eventually I want to be partnering with really interesting brands and products to offer these deals to my audience that they can’t get anywhere else, otherwise it’s just a deals site—and there’s nothing unique about that.
At this stage, making money is not even on my radar. My only concern is growing an audience. If I focus too much on money, I’ll start making decisions based on quick cash instead of long-term growth.
This month, and likely the next few months as well, I focused on growing an email list and Twitter following. I chose to focus on the email list because that’s going to be what brings in the bacon for the business later when I’m partnering with fitness brands to promote their products. I pitched the idea to a couple of fitness companies already, and they all said the same thing, “call me when you have a bigger audience” (and that was with me offering free promotion!). Once I hit 4 figures with my email list, it will be easier to go after smaller fitness companies to ask for promotional partnerships. There’s a lesson in that, too. Start small, and work your way up. You’ll have much more respect with the marlin once they see your boat full of trout.
I’ve been running a giveaway using KingSumo the past 9 days (5 to go), in order to build an email list quickly (entrants have to enter their emails). I picked a giveaway item that will help me grow a quality email list. Quality is always better than quantity. So far, as I write this, I have 154 email subscribers. I want to get to 1,000 as fast as possible (while staying in budget). The expense for the giveaway item will go on month 2 report because the giveaway is still in process.
I’m going after growing a Twitter following as well because it’s the quickest way to start engaging with my target audience, and the fitness world LOVES Twitter. Win, win. I’m using TweetAdder to build my following quickly and keep it well-targeted. I repurposed a previous fitness Twitter account I had from an old blog, so I started with 112 followers who were still pretty targeted. As I write this, I have 371 followers. I also want to get this to 1,000+ as fast as possible.
Money Spent= $29 on medium TweetAdder plan
Time Spent= Way less than 20 hrs/wk, probably closer to 5-7 hours/week
My plan for month 2 is continued audience building so I have something to offer fitness companies who I want to do promotions with.
Month 2 Update
I’m 2 months in, and this month went much better than last month!
I have still been focused solely on audience growth, not worrying about profitability at all. As I’ve said time and time again, to get good results, you have to focus on 1 main goal at a time, and if I worry about profitability, my efforts will be split and probably contradictory.
Last month, I mentioned that I was having trouble getting fitness companies to respond to me when offering to promote a product for free. I still didn’t get a lot of responses, but I did get a couple, and I’m working to get those deals done. Again, I’m not looking for money in these deals yet, just looking to get free products to promote as giveaways so I can grow my audience and begin teaching them how the site functions.
I finished the giveaway I began running toward the end of last month and total email subscribers earned was 176, which I’m happy with. I sent out the first newsletter to the list with the subject line: Freebie Alert & Cellucor C4 Giveaway – For everyone on the list, this was the first email they received from me. I honestly expected to have about a 10% open rate (15-20% would be very good for this type of list) and maybe a 2% click-through rate (5% would be very good), but to my surprise, the newsletter had a 37.1% open rate and a 14.9% click-through rate! Better yet, only 4 unsubscribes which I’m really pleased with also.
I chose not to send a “Winner chosen” email after picking the winner of the giveaway. There wouldn’t be much point to the email except to depress everyone, and the fact that they didn’t win would get across anyway by announcing a new giveaway. I also wanted the first email they received from me to provide the type of value they should come to expect (free or discounted products to help them kick ass in the gym), so I put together a free PDF that I called The Mass Gaining Supplement Guide that I gave away in the email on top of announcing a new giveaway. Very happy that the list I built with the giveaway hit the right audience.
I’m running another giveaway using KingSumo to keep newsletter subscribers coming in. The giveaway has a few days left still, but as of now there are about 90 new subscribers.
I continued using TweetAdder to continue growing my following on Twitter. This month was much more successful than last, with over 1,000 new targeted followers. I hope and expect to see that same growth next month which should really help my credibility moving forward.
Money Made: $0
Money Spent: $103.38 for the Giveaway prize and 6 months of TweetAdder
Email Subscribers Gained: 90
Twitter Followers Gained: 1,038
Time Spent: about 7 hours per week
Total Money Made: $0
Total Money Spent: $132.38
Total Profit/Loss: -$132.38
Total Email Subscribers: 258
Total Twitter Followers: 1,409
Month 3 I’ll continue with audience growth, and begin cleaning up the website to be more visitor friendly. I’ll run another giveaway or 2, and hope to lock in some free promotional partnership deals with smaller fitness companies so I can stop paying for the giveaway prizes and get my audience some real deals. I’m also playing with the idea of a free email course or workout plan or something to add more value than just giveaways for now. We’ll see.