My continuity / membership business - Tragic start to finish!!!
Don't be fooled. This isn't a 'my IM business isn't working' post. This is a "I got off to a terrible start with my last business but I am going to keep progressing until I reach what my definition of success" post that will update you on my progress along the way.
I have been reading here for a while but have just started posting. I figured that I would give something back by keeping you guys up to date on the progress of my new business. Reading about my failures and successes might help the newer guys on the forum.
All of the posts below were posted on another forum and the thread has got such great feedback that I figured I would post it and updates here as well!
I will first post my background, how I got started and then I will make regular updates on how my business is progressing.
I would love to hear any thoughts / advice / questions you may have!
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My background:
I am a 24 year old guy living in Vancouver Canada. I have my Bachelors Degree in Business (pretty much useless) and I am a professional house music DJ.
When I was 19 I started my first real business: Play It Tonight. It was a Download Store - similar to Itunes - but it offered high quality song files for dance music Djs. When I started out my dream was to create a business that would allow me to travel and work from anywhere and also to work with what I love: house music (what many of you know as "techno").
I started by contracting out some guy to build the complex store for me. I agreed to pay him $10,000 and it would take him 3 months. 13 months later he had racked up $21,000 and still wasn't done. I fired him and he had spent all of the money. I took him to court and won but haven't been able to collect any money.
My dream was still alive despite this rough start. I took out a $20,000 business loan and bought a 50/50 share in a business that had just started up and was doing the exact same thing.
What I didn't realize going into this business is that the costs of managing, hosting and processing music is HUGE. There was a lot more overhead than I thought there would be and the margins were tiny. Lots of competitors entered the market shortly after us and overtook us. Worst of all, Djs were downloading the same music we were selling for free!
This past summer we decided to shut it down. We were putting in 16 hour days for 3 years and weren't collecting a salary just to try to make it work. At its peak it made $5000 revenue one month but it never got over that.
Looking back now I realize that this was the case because of the market and business model that we chose. I didn't do all of the research necessary on costs and competitors before jumping into it.
For this new business I am setting up I sent a lot of time figuring out what model would fit the criteria that I have: low overhead, not much capital outlay up front, possible to have it fully automated etc. This is how I landed on the email database creation / continuity / sales page / membership site model.
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