Wealth Building

Straight from Yahoo — Here is another wakeup call for web developers who may be neglecting the international market:

Just five years ago mainland buyers accounted for 1% of global sales of luxury handbags, shoes, jewelry, perfume, and the like. Today the Chinese are the third-biggest high-end buyers on earth, with more than 12% of world sales, Goldman, Sachs & Co. reckons. Within a decade, China will likely leapfrog Japan and the U.S. to become the top luxury market, predicts Goldman analyst Jacques-Franck Dossin.

Which begs the question, how much longer until Weblogs Inc/AOL rolls out a Chinese version of Luxist? (they already have Chinese versions of Autoblog & Engadget)

I like to read magazines. My two favorite are Wired and Business 2.0. Besides being entertaining they are jam packed with valuable and relevent information for online entrepreneurs like me.

There has been a lot of discussion about the article on domain investing in this month’s Business 2.0 came in the mail. There was another article that caught my attention even more.

There was a very revealing interview with Google CEO Eric Schmidt. In it he discussed Google’s “70-20-10″ rule. That is, 70% of time is spent on their core business (Adsense, Adwords, and Search), 20% spent on related projects (Froogle, Google Local, etc.) and 10% spend on new businesses (Blogger, Google Talk, etc.)

After reading the article I divided all of my projects and businesses into 70 - 20 - 10. 70 is very clear to me. There is a single site that is doing very well. I had a little trouble with the 20 and the 10. Clearly my other sites fall under the 20, but what about my consulting and design side-jobs? From a revenue standpoint, my consulting and design jobs might even belong in 70.

I am going to be testing this rule out. Already, I have made some big changes in my priorities. I’ve been spending too much time focusing on things to bring in additional revenue rather than the things that are bringing in the majority of revenue right now.

The bad news is, this blog falls under catagory 10. Considering there are other projects under 10, that means this blog comes closer to 2% or 3%. That means out of a 14 hour work day I can’t even spend 30 minutes on this blog. Just writing this post has used up all of my time. Since today is Thanksgiving here in the US, and I have to take a break to go eat turkey, its going to be more like an 8 hour work day.

Think about how you can apply the 70 - 20 - 10 rule to your business. (and pick up the newest copy of Business 2.0.)

This past weekend I finished reading How To Salvage Millions From Your Small Business.

At first glance this book seems pretty light. Thumb through the book and you will noticed the pages have wide margins and only about 4 to 5 paragraphs on each page.

Don’t think that its lack of bulk equals lack of value – I found it to be quite the opposite.

Its clear to me that extreme success isn’t the result of plain old luck. There is a day and night difference between mediocre business owners and the ones that go on to make millions.

The authors make the point that you absolutely must be passionate about your work in order stand out from the rest. Most of the site owners I know fall into this category. Many would continue even if there was no money involved. If you fall into this category – read this book. It will help you re-focus and organize yourself. Making more money is just a side-effect.

There were a few things I didn’t agree with the writers on. In one chapter they recommenend only making phone calls from a cell phone and only in your “spare” time – driving and going to the bathroom (yes, thats exactly what they said.)

To find out more about this book check out their website: http://www.salvagingmillions.com/salmillions/default.htm

As a web publisher you really are a small business owner. You are in a great industry — your websites make you money day and night, whether or not you do anything to them.

Think of your websites as businesses. Always ask yourself, how can I make more money?

Today I recieved two books from Amazon through UPS. One is How To Salvage Millions From Your Small Business, the other is Getting Everything You Can Out Of All You’ve Got. These two books have nothing to do with website publishing. These books have everything to do with making more money from your business.

I’ve just started reading How To Salvage Millions. In the first chapter they talk about the importance of metrics! One of the writers, Ron Sturgeon was the owner of a very successful auto recycling business which he sold to Ford.

As a website owner I know just how important metrics are. As an internet marketer I know how critical metrics are (I’ve sold a few products through Adwords.)

I wrote an article for Website Publisher (not my site) about how to optimize Adsense. I’ve helped a lot of people double their Adsense clickthrough rates. I did this by tracking, very closely, what combinations of ad placements and colors make the most money — thats metrics.

To you and me metrics is a daily occurance. You log into Adsense and check your earnings. If you are like me you have seperate channels so you know how much each site is earning and how different ad placements are doing. Other busienss owners don’t have that luxury — they have to measure and calculate these things by hand. They can’t do them daily. A smart few do them weekly. Most do it monthly if at all.

Listen to what your metrics tell you. I guarantee you, you’ll make more money.

As an interesting sidenote this guy Ron Sturgeon is featured on Millionaire Blueprints’ website. Scroll down to the bottom and you’ll see a link that takes you to a photo set of his house and car collection (you can also see pictures of his cars at RDS Investments.) I bought this book on a completely seperate recommendation — not even realising who this guy was until I got it today.

His house is huge; I can’t even count the number of cars he has. Look at those pictures and then tell me you aren’t interested in this guys business secrets.

(Ron

I was happy to find my first issue of Millionaire Blueprints in my mailbox today. I ran into their website through a posting on someone’s forum a month or two ago. As soon as I saw their site, I told myself — I need to subscribe to this!

Unlike other business magazines, Millionaire Blueprints specifically shows you how other people made millions.

There are a couple articles in this magazine of specific relevence to you guys — website publishers. One is about Chris Faulkner, who started a multi-million dollar hosting company — CI Host. The other is Joseph Tantillo who is selling fraternity and sorority clothing and merchandise online.

After I finish reading this magazine cover-to-cover I’m sure I’ll make at least one more post about it!

I posted the “Do You Have An Exit Plan?” article on Sitepoint. It drew some interesting responses; unfortunately it appears to have boiled down into an argument on the morality of an exit plan!

If you want to participate in this discussion on Sitepoint here is the thread: Do you have an exit plan?

Every good entrepreneur has an exit plan. If you want to sell your business and retire in 5 years you will run it differently than if you plan to retire 30 years from now.

I’ve never asked any fellow web publishers what their exit plan is. Judging from their attitudes I think I think its fair to say that most would like to see their current revenue grow and continue on until they die.

For me, I have seen my revenue grow anywhere from 25% to 30% a month this year. At that growth rate it won’t take me long to reach every single one of my life financial goals.

I don’t think it is realistic for me to expect this kind of growth to continue indefinitely. In fact, it is already showing signs of slowing down. Unless I build some new sites that can really bring in killer traffic my income is going to plateau and maybe even drop.

Most independent web publishers rely almost entirely on free search engine traffic to make money. If the traffic dries up so does the money. For this very reason many web publishers keep their day jobs (along with the fear of being booted from Adsense.)

Due to this instability the re-sale market for content-based developed websites is weak. There are a few exceptions to this. First, premium domain-name sites such as men.com which last sold for over $1 million; second, just plain huge websites (such as IGN and Myspace which each sold for over $500 million this year.)

Personally, $500 million sounds like a great exit plan to me. I suspect most website publishers are too preoccupied with “the next Google check” to even consider making this a goal.

I believe that the domain-name investors are dead right when they talk about the concept of “virtual real estate.” Web sites have a real future value just like any building or plot of land. In the last decade the value has grown at near hyper-inflationary rates. Perhaps you could even compare the dot com bust to a mini-great depression.

Until now it has been the premium domain names and mega-sites that have shared the majority of internet real estate’s value.

I think that might be changing. Take a look at these tools at Jim Boykin’s SEO blog. Here is a tool which displays the top ten results on Google and include the website’s date. Its clear that age plays a big role in search engine ranking. If you want to be on the first page for “poker” on Google you might just be better off buying a site that has been around since the late 90s instead of starting fresh.

So, do you have an exit plan?