

Ask HN: I could really use some business advice. - blarg

I co-own an online retail business in a niche industry (prefer not to mention the company name here).  We started from scratch with no real funding about four years ago (savings and credit cards), and are doing about $800/day in sales now (on average).  We have a couple of part-timers to help ship product and handle customer service issues.  Our site is in the top 10 on Google for most of our keywords, and we’ve recently started doing Adwords fairly seriously.  Question is, how do we get to the next level?  Where can we go for funding? Do we even want funding, or do we want to keep limping along and growing organically?<p>I’m asking these questions to the larger community because we’re completely in a vacuum.
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SwellJoe
So, there are a few things that make me think you're not a startup...which
means VCs are not your ideal source of capital. VCs don't generally do
"retail", and they don't generally do "niche", unless "retail" is something
entirely novel (like Amazon.com was in 1994 or whenever it started), and
"niche" is something with huge growth potential (like Cisco when they started,
the market had nearly zero demand for "ethernet routers" at the time, but
within a few years demand was astronomical and Cisco profited from their
prescience). That doesn't mean you shouldn't get additional funding...it just
seems likely you shouldn't waste your time on VCs or tech angels, which is
what most folks around these parts talk about.

Other kinds of funding might be appropriate for your growth plans, though,
like bank loans, lines of credit from your suppliers, etc. One reason startups
don't fund through loans is that startups are too risky. A four year old
retail business that has consistent sales over a long period is not risky.
It's generally quite predictable from a risk perspective, and banks will trust
you to use their money wisely.

There's also traditional friends and family investment, or you could bring on
a new partner who brings money, expertise, and business relationships. The
latter is probably what I would be thinking about, if I were in your shoes. It
sounds like you need someone to help you grow beyond your current vision and
into something larger.

Or, if you're making enough money right now to live on, and hire someone to
take away the day to day processes of running the business, you have some
other options that don't involve loans or giving away equity. You could try
thinking like Amazon. I don't mean "imitate Amazon"...I mean, start thinking
of new ways to leverage your existing technology and infrastructure and
customer base. Did you build your own shopping cart software and inventory
management tools? If so, can those be used for some other purpose? Could you
open sister sites selling other products? Could you partner with local
companies that want to sell their products online? Could you build out an
affiliate system? Could you use it to sell virtual goods, like ad inventory?
Can you make your customer base worth more? Amazon sells ads on their site,
lets other retailers sell through their site, and has dozens of ways to make
every customer worth more. Again, don't imitate Amazon (because you can't beat
Amazon at their own game)...just start thinking like they do...always
evolving, always figuring out new ways to provide additional value for your
customers.

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CyberFonic
Google Jay Abraham! His stuff is awesome!!! Here are some questions he would
ask :

Who do you market to?

Who are your customers?

Where do you find them?

How else can you reach them?

What else will they buy?

Why don't non-customers buy from you?

More funding is never the answer. More sales, more revenue and greater profits
are always the way to grow. Selling on the web is only one of many ways.

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whatusername
Put it this way - you're doing more revenue than half the site featured on
here - and probably making more profit than twitter or facebook.

SwellJoe had some good advice. To use the E-Myth distinction - work "on" your
business, not "in" it. (also - probably read E myth revisited). Look at
adjoining niches? Create a new niche on the same kind of platform? begin
adding breadth and not depth Information Products / ebooks / lulu / etc - sell
well and with a significant profit margin (think parrotsecrets)

Do you need funding? What would you do with extra cash? If your aim is to
build the next facebook - you need servers, staff, power, etc.. If you just
need to grow/expand - what would you use the cash for?

Other book recommendations might be (How to Get Rich - Felix Dennis (ignore
the title - fantastic book) and maye the 4 Hour Work Week - Tim Ferris - I
haven't even read it - but I know that a large part of it was his story of
automating his product sales online. I'd guess it should have at least one $15
idea)

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peripatetic
Get a partner.

If you're stating you're in a vacuum now, well wait, because there will be an
infinite stream of decisions and competing priorities and aims and risks that
come from taking a co to the next level. So, if you want to take it to the
next level you need a partner, somebody that complements you, but kinda knows
what to do (either because of his experiences or the way he's built).

But, get a partner in a smart way. Take a year or two. Get somebody in your
own age range (not too old, not too young). Talk with him _a lot_. Get that
weird feeling that your not in sync on a couple of big issues, don't do it.
And make expectations clear that you expect him to take on quick projects that
are immediately CF positive for at least a year while he learns the business.
( I always slap my forehead when I hear those stories of founders letting a
new ceo take a huge flier early on. Big new marketing plan. Conferences! etc.)

good news in it all: Time is on your side.

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PaulMorgan
Have you thought about other sales channels - Mail Order Catalog, Physical
Stores, Licensing or Distribution to other Retailers?

$800/day or $300K/year isn't limping - it's a nice little business which might
or might not have growth potential. Do some market research and answer those
questions CyberFonic asked.

If you're in the USA contact the SBA. The SBA SCORE program is great for
getting help with growing a business.

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access_denied
Do you know the coaching program from Rich Sheffren an Jay Abraham? Maybe this
is a product you want to buy now.

