Carlos On Web :: Going techie without going broke

The main advantage of putting up an online business is it requires just a little start-up capital.

Its main disadvantage is it requires just a little start-up capital.

Yep, you read it right. But if you still don’t get it, you may read it again or you can read further down the succeeding paragraphs to get a detailed explanation.

There are two ways of funding a new online business venture.

1. Using a shoestring capital. Somewhere from $ 200 to $1,000; where $ means US Dollar.
2. Shelling out a large fortune. Yes, it’s indeed very possible if you are angry with your money. Got $ 100,000? Sure thing, gather your team of experts and have them develop a killing Online Business concept.

Obviously, I love going the first route. And if you are new to Online Business, that should be your choice too for three good reasons:

1. You minimize your risk
2. You can treat it as a game
3. You can have fun along the way

Entrepreneur Beware: Let me warn you ahead. Never under estimate the potential of an online business started on a minimal capital. If done right, your initial capital can actually grow from 10 to 100 times in a matter of a few weeks without you sweating too much on your business.

Tools Of The Trade Revealed

An online business is, in many respects, similar to an offline, traditional business. There are tools of the trade that needs to be on your arsenal and that you need to use effectively.

In any business, some sort of capital is necessary. Capital could be in a form of money, time, or energy. You need all three in setting up an online business.

Here are some of the most essential ones to prepare for.

Money Matters

1. Seed Capital – As mentioned you need to prepare somewhere from USD 200 to USD 1,000 in start-up cash. Can you think of any other business that requires as little money as that? In multi-level marketing maybe, but that requires a freaking lots of hard work to even get it off the ground and become really profitable.

Consider your seed capital as a play money. And don’t forget to have fun as you watch it grow.

2. Credit Card – Sometimes you need to buy stuff online. Some examples include: a domain name, web hosting, learning materials, books, etc. Credit Cards are the most popular method of accepting payments online. And not having one is like being stuck in Stone Age.

Credit Card Note: If you are in the Philippines and you need a recommendation as to which Credit Card Company to use, please drop me a message using the contact form provided on this website.

3. PayPal Account – PayPal allows you to send and receive money online. While Credit Cards can be used to pay online, wrapping it up on Paypal adds another layer of protection against credit card fraud. When you pay an online merchant using Paypal, you will not be asked for your credit card details anymore. Rather, you only provide your PayPal Account Credentials. That way, your credit card information is hidden from the online merchant.

Notes On Paypal: When signing up for a PayPal Account, it is best to remember two things:

1. Use a Credit Card to send money.
2. Use a Debit Card (could be your ATM Account) to receive money.

Tech Tools

1. Computer – You computer doesn’t have to be the fastest running cheetah. But it should be fast enough to do you most important transactions.

Personally, I prefer using a laptop since it is very handy I can take it with me should I get bored in the house and feel like having a nice cup of coffee in a nice coffee shop would attract some nice people to keep me company for a couple of hours.

2. Office Software – Sometimes they are called Office Productivity Software. They are mainly used to manipulate office and business documents. I highly recommend MS Office if you can afford one. The FREE alternative is Open Office.

3. Broad Band Internet Connection – Can you imagine running an online business and not have an Internet Connection at home or at the office? With the price of Internet Connection going down and the speed improving each year, Broadband Internet could be the best investment you can have after investing in a good toothbrush.

4. Email Account – Gmail comes highly recommended. When running an online business, you’ll be surprised to discover that a lot of business communications are done using email. Gmail is massive, very secure and has the best features I’m looking for. Get one now if you still don’t have it.

5. Website – A website is your virtual, professional image. At the very least, it serves as your online brochure for all of your customers and partners to see. Strive to have a clean and simple web design with lots of useful information your visitors will consume.

First: Raising A Red Flag

For Employees and Self-employed individuals, this article may come as a big surprise. This group of people is used to earning money by trading time for it.

When introduced to the concepts of leverage, residual income, and the like, many of them are so closed-minded that they automatically equate such concepts as a scam. And when they meet an ordinary guy (especially young and under-schooled) earning income that can only be describe as extra-ordinary, the guy is downright branded as a scammer.

What a wrong headed thinking!

Raising The White Flag Of Financial Education

I’m not sure if Robert Kiyosaki was the first to expose it, but his book entitled CashFlow Quadrant is instrumental to my understanding that there are basically four quadrants or ways of earning money each of which is represented by groups of people this way:

• E – Employee: earns from his job
• S – Self-Employed : earns by practicing a profession; may also work on his own business
• B – Business : earns by owning and running a business system
• I – Investors : earns by using money to make money

If you have not read the book yet, I recommend that you grab yourself a copy. Your local bookstores usually have it on the shelf, but of course you can always get one from Amazon.

Three Types Of Income

Linear Income – This is the type of income that is directly proportional to the amount of time you put into your work. Here are some examples:

• You work 8 hours, you are paid 8 hours
• More clients and projects, more money
• A 5-minute late for work means a deduction on your hourly salary… Blame it on the traffic… Grrr
• All sub-ordinates always earn lesser than the boss … ouch!
• Absent or in vacation means ZERO income

Leveraged Income – A business makes ample use of leverage by hiring people to work for the company or business and paying them for the time and talent spent to get things done.

Franchising (widely considered as scam a long time ago) is also a form of leverage. By inviting franchisees to run a business using a tried-and-tested set of methodologies, the franchisor is able to expand its brand and therefore makes it more valuable.

Leverage is making use of resources, talents, efforts of a team of people. Paul Getty, sums it best when he said, “I will rather earn from 1% of 100 people’s effort than from 100% of my own effort.“

Passive and Residual Income – This is the type of income that is worked out once and reaped several times over a long period of time. To generate this type of income requires creativity, talent and smarts. Here are some examples

• Royalties – artists, musicians and authors still earn even when they are long retired
• Rental Income – From commercial buildings and others
• Sales Override – Possible through affiliate marketing and network marketing (another one that’s deemed as a scam.)
• Investments – Essentially, the use of money to make money. Stocks, mutual fund, real estate, etc.

Which Type Of Income Is Best?

Notice that of the three types of income, it is only in the first type (Linear Income) that you are directly exchanging time for it.

Going back to Robert’s CashFlow Quadrant, Linear Income is generated by those in the E and S Quadrants. Leveraged Income and Passive Income are generated by people in the B and I Quadrants.

Take note also that anyone can be in any quadrant. It is even possible to belong to all of the Four Quadrants.

So, in other words, the answer to the question, “Which type of income is best?” depends entirely on you – your level of comfort, the talents you bring into the table, your own desires and your willingness to pay for those things.

How much does it cost to create a website? As a web developer, I often hear that same question over and over from business acquaintances I get into contact with. Some would like to build a business website, thinking that it is a cool thing to do. Others would think that building a website is much like typing a thesis paper on a word processor and therefore it should be easy and cheap. If you were to answer that question, what would your response be?

Three hundred thousand Pesos? Fifty thousand? Five thousand? One thousand? Just a cup of McDonald’s hot chocolate?

Any Web Developer worth his salt and who has been in the business of developing websites — or Web Applications for that matter — is aware that the first question raised above is actually incomplete. It doesn’t even give you a hint as to the nature of the project. So any figure you that you will come up with based on that question alone is in fact meaningless. But, on the side of the customer (the one asking for a price quotation), it is a good way of spotting the kind of web developer you are talking to – whether an amateur or a real professional.

“Hey Carlos, if you don’t come up with a figure right then and there, how will the client know if he will hire you to do the project or find someone else?”

Thanks for asking and you have a good point. First, I don’t regret losing a client who doesn’t know what he is about to do. If I should be working WITH a client, I’d like to do it with someone who awards a project not on the basis of price alone, but on the benefits he will derive in knowing that he is working with a real problem solver. Second, as a web professional, I always make it a point to remember that I am also a consultant. It is my job to dissect what my client’s real needs are and offer a few suggestions. It could be free during the initial stage, I’d be glad to do that. Just because a client wants a business website doesn’t automatically mean that it is the perfect pill for him to shallow.

“So Mr. Consultant, how do you proceed?”

If you are new to Web Development Business, read carefully. I am about to share some priced possessions that I’ve been keeping in my treasure chest of wisdom learned from being a practicing web developer and software consultant. I am assuming here that you are dealing with a client who relies on you for guidance in showing him the right way to develop his website.

Here are the five points to remember:

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