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How to reduce risk when you start up online

‘Fail fast and fail cheap’ is a piece of advice that’s embedded in Internet culture. It’s also a piece of advice that many Internet entrepreneurs and established businesses fail to fully understand.

Let’s strip away that idea of failing, for a moment. Let’s modify it to ‘launch fast and cheap’. Many small businesses and start-ups soon get carried away with launching and lose sight of how they should be spending their budget.

Look before you leap

I see an amazing number of new businesses spending all their start-up capital on a wonderful-looking new Web site, without any idea of whether they have a viable business idea or not. Having commissioned that wonderful site, they are then are faced with the problem of how to get customers to visit with the little budget that remains.

They are the people who find themselves being sucked in by the often dubious practitioners who claim that marketing a Web site is cheap, instantaneous and totally effective in the long term.

Lack of online marketing budget may not be a big problem if you’re planning to market properly offline, but if the expectation is that your business will operate and be marketed 100% online, then ‘fail fast’ is exactly what you’ll do. All the money put into the site will be teetering perilously close to the precipice.

That’s what I call failing expensive.

How to save failing expensive

While it’s a huge temptation to go out and get that online presence built – of course, it’s human nature to want to see something tangible – it can cost you a lot of money.

Proceed carefully. Don’t spend budget (or your own time) on building a site and on branding until you know you could have a business. By all means, think up a business name and buy a domain, but go no further until you’ve found out if your business idea has a chance online.

What do you need to know?

Just because there’s a market out there for what you’re hoping to sell, there’s no reason to believe you’re going to be successful online. Suppose you’re in financial services, a regional financial adviser with a few offices perhaps? You’re going to be running up against the marketing budgets of the banks and other huge financial institutions, and life is going to be very tough.

But, whatever your business, you’ll need answers to two fundamental questions:

1. Can you expect to get a first-page natural search position on Google within your budget or available time and resources?


2. Can a Pay Per Click (PPC) campaign be run profitably?

If you can make a clear case for Organic SEO success, you should be more confident of the future of your business. Organic SEO is much more under your control than PPC/SEM (Search Engine Marketing). Carried out properly, using ethical methodologies, it’ll give you the lowest risk route forward.

If you need to rely on PPC for your customers, the future could be far more uncertain. You’re relying on being able to buy traffic at a price that enables you to remain profitable when the price is changing constantly – yes, PPC is more auction than anything else.

If the price you need to pay for your traffic increases significantly, you’ll either be running at a loss or you’ll need to stop buying traffic entirely until the prices (CPCs) come down. What will cutting off the supply of customers do to your business plan?

Getting the answers you need

The good news is that getting the answers you need before launch is considerably cheaper than getting a good Web site designed and built, and then running marketing experiments on the live site.

If you want to do the research yourself, the best approach is through taking these three steps:

1. Identify all the key phrases that prospective customers using a tool like one of those at NicheBot ( There are free and paid-for tools.

2. Rank the key phrases according to number of searches.

3. Work out the number of key phrases you need to get on the top page of Google by:

i) Running a Google search on the key phrase,
ii) Taking note of the domain name of the sites at the top and bottom of the first page (positions 1 and 10) and feeding it into a link counting tool such as that at
iii) Recording the number of links,
iv) Repeating this for each key phrase in your list and
v) Recording the figures in a spreadsheet.

You’re looking for the best balance of high numbers of searches and low numbers of links – the key phrases with the lowest numbers of incoming links are those that are easiest to target with your Organic SEO campaign. So you’ll know which key phrases to optimize on, and how many links you will need to build.

Alternatively, you can go to a reputable SEO company and ask how they can provide an online marketing strategy for your site.

Whichever way you go forward, it will be an investment well spent, allowing you to embark on your site design and build knowing that your online business has an excellent chance of succeeding in attracting the traffic it will need.


About the Author: David Rosam is Head of SEO Copywriting at Web Positioning Centre and specialises in Internet marketing strategy and optimized copywriting. His blog is Dangerous Thinking and covers