It takes money to make money
This article, just like many others in this topic, states the OBVIOUS. Why am I wasting time telling you something you already know? Maybe because some of my readers still don’t “get” it. They still run after “freebies” thinking this is the way to be successful. Sure, less expenses mean bigger profits, but what if these freebies actually keep you from getting a good profit?
I started my first site in March 2006. I wasn’t willing to spend money, in fact I didn’t have money to spend on a “hobby”. The site was placed on a free host and I started working on it, doing my best to keep myself from anything that would require money. My problem was that Paypal wasn’t available in Romania either and paying abroad was really a pain.
The next 3 sites were also made on free hosting, with free scripts and more work from my part. I was getting so involved in them and they started to take off. I can’t say they started making money though, since the Adsense payments were so small it would take me half an year for the famous 100 USD check.
And then it hit me. I was limited. My free hosting meant no domain, this meant less chances to brand the sites. There were some free domains available (.tk), but I knew that it was not a good extension for a serious site. And my sites were serious. In 2005 I made my FIRST domain purchase and moved the main site (back then) to the domain. June 13 was the day I realized that FREE is good, but FREE is not always the BEST.
I kept on working with free scripts and tried to make the most out of them. In 2006 my Women Forums were elected “PhpBB of the Year” on the reputable phpBBhacks.com. A lot of work was put into it, but I proved I was able to manage a free script and really take it to the next level.
The Webmaster Forums were still on phpBB and more members complained such a script (even if modded and skinned to a great result) wasn’t “professional” enough for this topic. I knew that myself, so I managed to pay for my first vBulletin script.
More sites followed. Right now, the Dojo Design network consists of more than 30 sites. Some bigger, some very small, some inactive now or buzzing with posts and members. They all required investments (hosting, domains, scripts in some cases, skins for blogs etc.) Even if I do spend money on them (at least 200 USD/month) the profit has increased dramatically over the last 6 months. The earnings were small in the beginning, but now, as the sites grow and some get a good traffic and PR, they increase each month. The investments are now less than 20% of the earnings and this offers me the chance to make a pretty decent profit from them and also be able to grow them some more by re-investing some of the money.
I have friends telling me that I should stop reinvesting and just focus getting as much as possible from them. Still some of the money spent in my sites are important for their development. Stopping my reinvestments would mean hindering their growth and this would result in a smaller profit in the end. As long as the budget is carefully kept under control and the sites make more money each month, then it’s all just a good business.
What kind of investments does your site need? A domain name is mandatory, such as a good hosting account. Sure, this is the smallest investment possible, but together with your talent and hard work these would ensure a good growth and future profit.
Don’t be scared of this. Don’t be too cheap to keep your site from getting the minimum it needs to start well. A 10 USD (even cheaper) domain name and 3-4 USD/month for the hosting are the smallest investment you NEED to make in order to secure some future profits.
With under 50 USD/year your site will have a good domain name and a decent hosting account with all the things you need. No one said you have to buy expensive scripts (unless you need them for the site) or a fancy skin. You can manage the design on your own (if your design budget is too low) and you’d be able to make it work from the first moment. If you need a special script though (it’s not a blog for instance or anything that can rely on a good free script), then prepare to make the investment from the first moment. Most of the time script conversion leaves you with 404 errors, database problems and it can be hectic for you and your visitors.
The moment you start an online project with the idea of getting some revenue in the future, make sure you know all the details and are ready to invest. Not much at first, but the least you need so that your site would have a decent start. It really takes money (even small investments) to be able to think about money.
Nice writing. You are on my RSS reader now so I can read more from you down the road.
Allen Taylor
“Freebies are good but not the best”, I am totally agreed with that. I had been working on Oracle projects and someone showed me power of web. I started visual Studio and get some expertise. Almost an year ago, I started my site on #1 Host on Google for windows shared hosting. I spend a lot but I am more than happy. I spend on SEO and my site is #1 for a keyword with 18 million results. That is wonderful.
It is so cheap to start any websites at once but it is difficult to keep them alive. If you can write content or you are a geek then there is no better profession than websites or internet.
Concept of freebies is pretty old now and people over internet spend a lot of money on their internet business. I think it is almost impossible to earn some money without spending. I hope that you will understand, what I am talking about. Everybody wants to start their own ventures and businesses. Perhaps it was an old concept to earn and spend.
Its so true… my web business didnt really take off until 2002 when I started spending cash on one of my sites. Professional web design, coding, and marketing can really make a difference. Just make sure you spend your money wisely!
James’s last blog post..The need for .EDU links
@Allen Taylor: Thank you for the nice words. Let’s hope I’ll be able to keep you satisfied with good content over the time
@New Age: free was OK for me too for a while, but then I really needed to step into the ‘serious’ stuff. I don’t regret it though.
@Steve .. yeah, I assume a geek as we are does stand a chance online. It’s a nice profession and the payout can be pretty good.
@Passive Harry .. the days of the “innocent” web have passed. We caught few years of that and now we have to deal with an over competitive web world. And sometimes to survive, we need to also pay.
@James .. I kinda find myself in the “watch your budget wisely”. I can easily overspend the moment my earnings increase. You gave me a good idea for another article
Today I was researching some SEO tools and those are desktop SEO applications. I have been using many free online tools since an year but they are not efficient enough to quench my webmaster thrust. Many of them cost more than $300 but I think it is pretty normal price for such a nice utilities. Only in one day they are able to impress me and to urge me to spend money on them.
You didn’t waste my time.. Nice article. I agree with you
What you have written in this post is pretty normal and we should spend to earn the money. I had some very cheap hosting accounts in past but they proved themselves worst when I had lost all my data and databases. Since that, I spend money on purchasing a dedicated hosting plan and I am more than happy.
I totally agree with you. Free it’s good for starting, until you get some experience and some results. But you need money to get serious profits.
The problem with all these free things is that you don’t end up making any money. You loose in the end and get futrated and eventually lose interes
Welcome on the blog and thank you all for the nice comments.
It’s an important moment, when you can aford getting on the next level. Sometimes FREE is good, but in many occasions paid is better. It’s still hard at the beginning to pay for anything since we’re so scared we’d lose money.Sometimes we do lose money on something, but can recover our losses in other ways. As long as there’s a profit, we’re doing just fine …
You know, the saying is definitely true, it takes money to make money. I feel like entrepreneurship revolved around the internet is one of the cheapest startups in any field or niche.
Great comments, and I definitely agree by the way.
More problems with free hosting are downtime, and a lack of guarantee your data is safe.
For the most part it takes money. Those who are really skilled can get huge profits with spending very little though. All around great post though, good read.
The problem is many internet “gurus” give people unfair expectations as too how little financially it takes to get an internet business up and running and then give vastly inflated claims on realistic earnings.
This article is honest and accurate,
Thamk you for telling the way it is.
Amazing article with some nice info on money making. I also go always for cheap hosting and domain but you need to spend money if you want to make money. I always invest inside my business to make more out of it.
IN beginning we are always reluctant to spend money and I went through the same process. After 3 year, I own more than 20 sites on dedicated host and this is the big difference between earning and learning.