As a business development consultant, I am continually honored by the opportunity to help people invest in technology and create some kind of functional tech product for their businesses. Over time, I have observed that a high volume of people investing in websites and/or web applications have had unrealistic expectations about the return on the investment they were making–in some cases, drastically unrealistic.

TYPICAL BUSINESS WEBSITE

The following is a typical situation that I see just at the point of publishing a website:

• Product: business website
• Features: some attractive flash snippets, a short video/slide show
• Cost: $3000.00
• Balance to web developer: Paid In Full
• Client satisfaction with look and feel: HIGH, product gleamed precise vision of business ownership at outset of development. They’d recommend this developer to anyone.
• Budget for pay-per-click: $0.00 (reason: client heard these campaigns were a rip-off)
• Budget for email campaign $0.00 (reason: client has staff to do this in-house, can save on cost so we’ll do it ourselves)
• Budget for blog-writing campaign with search term optimization: $0.00 (reason: client has staff to do this, company comptroller was an English major in college, can save on cost, so we’ll do it ourselves)

The following is what commonly ensues 6-8 months after the above site was published:

• # Blog Entries Made: 1, the one the web developer originally posted (reason: comptroller was too busy to write blogs because of some unforeseen accounting issues)
• # Visitors to site: Unknown (reason: comptroller has since lost the password to that analytics tool the web developer set up for us to analyse it ourselves)
• Hot leads/conversions generated by site: 0
• Site owner’s current satisfaction with investment: LOW

In the situation above, the site owner sometimes writes off the web as a bad investment, or begins to ask tech-savvy friends for second opinions on “things we could do with our site to get more results,” which sometimes results in suggestions about meta tags, alt tags, key word content, or a suggestion that the look of the site is just not professional enough (despite the satisfaction felt after the first publishing).

Is this you? Has this been you? Have you been the web developer on the other end of this? I’ll admit, I’ve been ALL of these.

ANALYSIS

I call the situation above the Field Of Dreams Fallacy - if you build it, they will come (This of course only makes sense if you’ve seen the Kevin Costner film Field Of Dreams).

Many business people who are new to the web have common expectations about the Internet–that just building something “cool and techie” on the web will bring us some return. We don’t always start with a long-term strategy, plan, or objective, so we end up with a really cool product that we are left uncertain of what to expect from it. No matter how fresh and new the web is, some things never change–common business realities apply here.

What should the return on our money be? According to this article at expert click, it is reasonable to expect 5-10% return per year on capital invested in a business, and anything higher than that will attract competition. Having a business degree and being a business owner and developer myself, I would concur.

I think most business people would agree with the estimations in the paragraph above, yet, I can’t deny hearing the words “website will pay for itself” uttered by so many business website investors. Here’s what I’ll offer: If in a year, a savvy stock investor could expect to make back $3000.00 on a website and continue making $3000.00 per year for years thereafter, that investor would change from stocks to websites in a heartbeat.

Let’s label any expectations about a website paying for itself returns, and discuss different types of returns we might expect. We’ll discuss 2 types of returns: exposure, and conversion (we will leave the science of capitalizing on traffic for advertising revenue for another discussion).

EASY RETURN: EXPOSURE

Exposure is a benefit (and I would argue is basic “table stakes for the game”) that starts simply with someone being able to verify that you exist online. A simple return might be someone who lost your card that you gave them when you met them, all they remembered was your business name, and they were able to find your phone number online to call you for a consultation. This return might be difficult to identify or evaluate, but if you really wanted to, you probably understand your business well enough to estimate/evaluate this if you try (I wonder if calculating this would come out to 5-10% per year over time…).

Another return on exposure is image–someone might be sizing you up against a competitor, and comparing benefits of your service or price against someone else. Again–difficult to evaluate. The website owner in the example discussed above may never realize this is actually happening, because a conversion did not result directly or knowingly from the website.

I would argue that while exposure’s benefits are the hardest to quantify and measure, they are the easiest to achieve, in that just by having a reasonably designed website that is online, the benefits of exposure as discussed here will ensue almost automatically (so in this context, if you build it–they will actually come!).

HARD RETURN: CONVERSION

In an exactly opposite fashion of exposure, conversion is the easiest to measure and the hardest to achieve of the two types of website return. A conversion would be someone who called, emailed, purchased a retail good, or requested a consultation of some kind that directly resulted in business purely from visiting the company website.

This kind of return requires another lesson from the Field Of Dreams: going the distance. This type of return on investment for websites is where I believe that most investors lose touch with reality, and I believe it is what most investors want after investing in a website — CONVERSION.

To go the distance and achieve conversion, an ongoing process of marketing, investment, research, maintenance, and energy are required. It is also important to note that this type of return, depending on your industry, may not even begin until after a substantial investment in ongoing promotion of the website. The website may even need to be adjusted several times through trial and error, depending on your strategy and product, to reach certain goals (which need to be set). The following ongoing promotion tools are typically overlooked by first-time web investors:

• Blogs/News Letters–changing relevant content for search engines to find and make available
• Pay-per-click advertising
• Extensive targeted email campaigns
• Ongoing search engine optimization
• Off-line marketing driving visitors to online point of sale
• In-person networking combined with a strategy/promotion to drive visitors to site

Depending on your business, any one of the above may be applicable, but they all have 1 thing in common: they all require investment of ongoing resources.

CONCLUSION

The most commonly overlooked factor that makes expectations unrealistic is the assumption that building something and investing a one-time sum will simply produce returns forever. I see this across I.T., not just in websites. Some business owners operate under a similar fallacy that they’ll just have to “invest in this computer network once,” and overlook maintenance, aging computer technology, wear and tear, and continuity issues/disaster recoveries.

Realizing this up front can save whole lot of mental pain by going into projects with proper expectations. Simply having piece of mind that you’re receiving return on 24/7 exposure that is provided by a basic and professional site is satisfying, much like a nicely designed sign does that sits out in front of a store front.

If it is conversion you want, be prepared to “go the distance.” Don’t make the mistake of thinking that the Internet is any different than any other medium for marketing–it requires a plan, a budget, goals, and ongoing energy.

Stay tuned for my next discussion on expectations for return on web applications in the same context

Need to sit down and talk about some of these issues yourself? Feel free to give me a call at (520) 229-8730, or request a free consultation

Other links that might interest you:

DMWebZing blog on websites
D’Mention Systems Company Blog

Since the economy has slowed in 2008, advisement about surviving the “tough economy” has been heavily focused on marketing, advertising, cutting costs, and employing technology. The way I see it, there has not been nearly enough emphasis on ensuring that the minds of business leaders stay healthy.

I believe that too often, business owners in particular forget that we are the economy. A collective state of mind that is negative only guarantees that things will stay bad. All of the business tools listed above–marketing, advertising, cost analysis, and technology are far less effective when business leaders have a poor mental outlook.

BUSINESS COACHES

Business coaches exist to improve our mental picture. Here are 5 key things that business coaches have helped me with in my career:

1. GRATITUDE

During down times especially, it is easy to focus on the lack of things in our careers and businesses rather than being grateful for what we have. A good coach can bring you back to a state of gratitude for the things you currently have , and a great coach can get you grateful about things you don’t even have yet.

2. ALLOWING

When something or someone is a perceived obstacle, headache, or outcast in our life or career, it is easy to fall into a trap where our minds constantly expend negative energy about wanting to change and or judge that entity. A good coach can identify the stream of negative energy so that you can observe it, and a great coach will help you re-direct that energy to something productive at work.

3. DEALING WITH FEAR

Fear is a paralyzing emotion that keeps us from acting in the present because of something negative we think might happen in the future. A good coach can help identify fears, a great coach can turn your fear-based lack of action into productive action to get things done.

4. DEALING WITH CHANGE

Business is changing so fast these days that business people need to re-invent themselves periodically. Human beings are habitual, and some habits that are deeply programmed into our daily activities are simply impossible for some of us to change without help or outside awareness. A good coach makes you aware that those things need to change, a great coach thinks of creative ways to access your subconscious to truly re-arrange the dendrites in your brain to change something (even if methods are sometimes “off the wall”).

5. FOCUS

The way I see it, when the four items above are in line, it is much easier to sit down prioritize your day. In business, we only get a finite number of minutes in the day. We will either choose to spend our time on things that help our careers grow, or we won’t. Being able to clearly see what to focus on relies largely on getting the first four items of this list in check. Focusing on the right things brings about success.

CONCLUSION

I have worked with business coaches off and on throughout my career. For me, I would not be the same without the impressions that they have made on me during my tenure as a business owner.

I recently had a project that was not going the way I wanted. I was so distracted and out of focus that it was effecting productivity. I worked with business coach John Fox, and he really helped me get my mental outlook at work back on track.

This recent experience made me realize how important it is for business professionals to invest in our mental outlook, so much so that D’Mention Systems and I co-founded Think Out Loud Masterminds along with John Fox to give other business professionals access to the same opportunities that I’ve had in these areas.

• Connect with my business partner, Andrew Hollamon at LinkedIn
• Andrew Hollamon’s Blog
• D’Mention Systems’ Blog on tech issues

Do you know anyone who has a technical project–large or small, such as a website, software project, or network setup that is stalled or half complete? I’m never too busy for a referral, so if you think I could help–feel free to drop us an inquiry by clicking here…

Today’s Internet is stocked with fantastic low-cost or free tools for managing ones own web presence. From content management systems like Drupal to the Blogger (the tool I’m using now to write this entry). If you take a few moments to search, you can find free do-it-yourself tools to do most anything.

In some sectors of business that I consult in, there is a growing pressure among small business peers to do things internally under the premise that it is “smarter save money by doing things yourself.” I have pondered this for some time now and have considered whether this is warranted.

KEY COMPARISON

When I was in high school, my guitar player from my band used to drive us to school in an enormous Ford Galaxy. Between band practices, the guys in the band and I used to love to work on that car. We did small jobs like changing the oil and working on the brakes, as well large jobs such as changing the timing chain. We became pretty decent young mechanics, and wouldn’t have ever dreamed of taking that car anywhere to have it worked on.

Today, my guitar player pilots a C-130 in the U.S. air force and I run a software company. He spends much of his time overseas, and I’m in the prime of my career, so I’m seldom too far from my office. I don’t think either of us have worked on a car in years, we pay to have work done on our vehicles today. Why? We are simply utilizing our time in other ways. One can spend an entire day working on a car, especially when it’s yours–some days we’d get started and never stop.

You can spend an entire day on your website too–especially when it’s yours. And an advantage over working on cars is that your hands don’t appear to get as dirty and your arms don’t get tired from holding a wrench or holding your body over the fender to reach a bolt.

CONCLUSION

I conclude that for the hobbyist, novice, and even the part-time self-employed micro business owner, the do-it-yourself toolset is the way to go. One saves money in this scenario while being creative, doing something fun, and learning new things.

For the full-time self-employed business person, or the small business looking to grow, do-it-yourself may still actually be the way to go, but if you are one of these, I would consider asking yourself a few questions:

• Am I or the people in my own organization actually savvy enough in the first place to create a professional product? (If you’re not sure, you may want to sit down with a consultant who will give you a complimentary Q&A on this, I actually offer this service myself, drop me a line if you’re in the Tucson or Phoenix area)
• Could my time developing my website be spent more effectively doing something else–like helping customers or filling orders for business?
• What is my time worth on an hourly basis, and from that, can I/should I budget a weekly or monthly allotment of time to allot to working on my own web presence?
• Are some parts of my website or content better written by someone else? Sometimes having someone else tell your story is both easier and more compelling to visitors than trying to do it yourself, and this might be worth paying for.
• Can I find a company that has a professional consulting presence that can guide me and strike a balance between developing the important parts but giving me the ability to manage/update key content, current events, and industry news (this is another area we are very complementary in, we love to be of service if you’re in the Tucson or Phoenix area)

So striking that balance between doing it yourself verses hiring a tech professional is key when considering our time and resource management as business owners. When this balance is right, the Internet is an area of infinite possibilities in terms of helping business customers find out about what we do and how we can help them solve their respective business problems.

If you liked this blog, here are some other sites that might interest you:

• Connect with my business partner, Andrew Hollamon at LinkedIn
• Andrew Hollamon’s Blog
• Did you know we make our own accounting product? See PiAccounting.Com

Do you know anyone who has a technical project–large or small, such as a website, software project, or network setup that is stalled or half complete? I’m never too busy for a referral, so if you think I could help–feel free to drop us an inquiry by clicking here…

It is very common that entrepreneurs and business enthusiasts approach us with ideas about starting a business. Being a business consulting, software and tech company often allows us the opportunity to build a company from the ground up with our clients in terms of infrastructure and operation.

The type of owners we typically deal with are “front-end minded” individuals. They have almost always thought through a way to enter an “untapped market” with some kind of web-based technology and marketing plan to bring some product to market. The ideas we hear are usually compelling, impressive, well-thought out from a front-end perspective. But almost always lack any kind of plan or more importantly–cost structure for control, accounting or administration that would be necessary if the “organic viral” concept were to “catch fire” or “take off.”

When asked about whether or not considerations have been made for administration, accounting, and details like this, the most common answer we here is: “The web system should handle that.” There is a common assumption today that a web system or software can completely replace accounting, reconciliation and administration, and this just is not true. Consider the following example.

Company X develops a fantastic website to market widget X as a re-seller. Widget X is purchased from Company Y at a cost of $1.00 and is sold over Company X’s web POS for $2.00. Company Y is recovers its cost by tapping Company X’s bank account for items sold in a week, and the quantities charged are determined by a weekly data batch sent from Company X’s web system to company Y’s.

Eureka! Month’s 1-12 are a complete success. Company X sells twice the Widget’s as expected. And the money invested to create a web system sure paid off–because everything’s automatic! No hand-written checks, invoices, or anything have to be exchanged between the producer and the reseller. All the owner of company X have to do is monitor online banking to make sure the money is coming in. Outstanding.One small problem. When customers arrive at the website and order widget X, if they are using web browser X that has pluggin Y installed (popular toolbar from their favorite social networking site) it causes a rare phenominon in which the count for widget X ordered is over-stated in the data batch by tripple. In other words–every time customer order widget x, Company X gets bill 3 times for it instead of 1.The problem is that since the error made by the web system only affected 5% of the transactions, without any substantial accounting or administrative processes in place when the entrepreneurs of Company X created the company, the billing problem is not easy to find–it becomes like a needle in a haystack. This billing phenomenon could go on indefinitely at Company X, causing it to lose money unknowingly.

Now instead of making money on this product, they lose money.

Sadly, things like the scenario above happen to start-up companies all the time. We see it from two different perspectives : beginning a consulting relationship with company AFTER a problem like the example is already occurring in an effort to fix it, AND assisting the start-up of a new company advising on how the potential for pitfalls like the example can occur in the future.

We find business owners to be much more receptive to our advisement to invest in best practices in accounting and administration in the situations where it has already happened. We too often find it very difficult to get new business owners to imagine that such a scenario like the example could actually happen to them, and unfortunately investment in best practice to avoid this gets overlooked.

Situations like the example above can happen, do happen, and need to be considered as if they will happen. If you are considering a start-up that relies on technology, websites or software to be your company’s sales front or payroll (which is becoming more common every day), make sure to have expertise around you during the start-up process. You should take into consideration back-end company necessities like accounting, administration, reconciliation and control. This can not only help alleviate a great deal of hardship in the future, it could be the difference between a company surviving or not.

If you liked this blog, here are some other sites that might interest you:

• Connect with my business partner, Andrew Hollamon at LinkedIn
• A networking organization we co-founded–we have been die-hard believers in structured business networking for years: see ReferralTree.Net
  
• Did you know we make our own accounting product? See PiAccounting.Com
  

Do you know anyone who has a technical project–large or small, such as a website, software project, or network setup that is stalled or half complete? I’m never too busy for a referral, so if you think I could help–feel free to drop us an inquiry by clicking here…

I have been a partner in a successful software and technology consultancy for almost 6 years now, and I’m blessed to have great loyal clients and fantastic partners. The things I’ve learned from them along with my experiences in this best of all industries have inspired me, and I have a lot to write about!

OUR COMPANY

Our company, D’Mention Systems, is a general technology consultancy. Over our tenure, we have had a wide breadth of experience in many areas that include specific line-of-business application software (in industries such as automotive and construction), custom web applications, technology partnering (helpdesk contracts and remote on-call support), business development, website and video/animation development, foundership investment contracts, software training, and business development (there are probably some I neglected to mention, my partners constantly remind me how bad I am with buzz words). Our clients have ranged from the individual looking to quit his/her job and follow a dream to major universities looking to cut cost.

WHAT I ACTUALLY DO

As my perspective on my own career evolves, I’m assessing more and more that my job in the company is really not about software, tech products, or technology. The path to realizing this has not been easy for me, as I love to be “close to the metal” in terms of code, development details, programming languages, and new technology.

I’ve come to realize that my partners and tech staff actually lead me in those areas. In doing so, they allow me to be good at what my actual job has always been–I am a business development expert. I just happen to deploy computers, the web, software and technology to solve business problems, because in today’s business climate–those tools are the most cost-effective option we have for operating a business.

For years, I have performed the role of product manager on a wide range tech projects, websites, multi-media productions, and software projects (most I’d deem successful, and a few not–all worth writing about). I feel that the role of manager in any business sense of the word requires a knack for being able to “see the whole picture,” and to gather that picture in any situation QUICKLY.

Half or more of our tech projects that we took over were projects that were stalled in some way, for whatever reason. I happen to be one of those people who can enter into a situation that is difficult, behind schedule, politically hostile or otherwise, and begin progress toward problem solving and project completion almost immediately.

Like many published professionals, after having done this over and over, I’m at a level where I feel inspired to reflect back at what I’ve done and analyze how I’ve done it to see if there’s anything notable that stands out in the way I do things that I can share with others. As I do this, I’m intrigued that I actually do have a philosophy for looking at businesses and business units. This philosophy makes up the platform for which I will write my posts.

MY PHILOSOPHY–HOW I SEE BUSINESS IN A NUTSHELL

THE FRONT & THE BACK: As I see it, EVERY business (or business unit within a larger organization like a department or division) has what I simply call a front and a back. The front of a business encompasses everything that is outward facing: the name, the logo, the tag line, outreach, marketing, mantra, store-front, mission, definition of product and customer, sales people, and image among other things. The back of a business encompasses infrastructure, accounting, finance, budgeting, planning, corporate office location, plant & equipment, management, servers, computers, tools, product development, quality control, supplies, and employees among other things.

During my tenure as a professional consultant, I have observed in nearly every instance that one of the main problems with the business we were consulting was that there was not a sufficient balance in the owner(s) focus of attention, management, and resources between the front and the back. In most cases, I have observed that most entrepreneurial small and medium business owners (our largest client group over the years) have a tenacious focus on the front, and an absence of focus on the back, as well as in some cases a dislike for the back compounded by an overall misconception about what it takes to create and manage a strong back.

In an odd way, this may define why I’ve been successful in my career, because despite being an entrepreneurial business owner myself, I have oddly always been a back - focused business owner (my dad is a CPA, that may have something to do with it). In fact, I would still consider myself more of a student of the front at this point in my tenure as a business owner, especially since the way a business’s clients arrive at the front door of a business is changing so rapidly today.

I would consider myself a pretty solid expert at the back of a business as defined above, and this balance between myself being back - focused and my clients being largely front - focused may explain my success and longevity as a consultant, as well as our clients’ success as a result of utilizing our services, so I’m grateful for this peculiar sort of reality and balance between myself and our clients.

What I have learned so far is that there are 3 main ingredients to building a successful “front” of a business:

1. Clearly defined product(s) and customer(s) – This should really go without saying, but it is really amazing how many of us in business really have not taken the time to identify our products and customers, both to the outside world as well as to ourselves as business owners
2. Continuously employ several forms of marketing — Continuously be utilizing more than 1 form marketing at all times (preferably 3), and NEVER stop marketing at any interval, no matter how busy you get      

3. Control from the back - Those who influence sales, make commissions, and drive the company’s front need to have limited policy & decision-making abilities. It is such a commonality that this causes problems, and nobody ever seems to point it out. Look at some examples–the U.S. government budget committee, Enron, the bursting of the “real estate bubble–” do you think there may have been some “front-focused people” influencing “back-end policies,” like in accounting perhaps?      

I have also learned that there are 3 main ingredients to building a successful “back” of a business:

1. Proper Infrastructural Investment — The right amount of energy, attention, and investment in the back. This is a moving target from the day a business is born throughout the business’s life      

2. Proper overall management — Realization that proper management is constant, an ever-lasting challenge, and ever-changing such that there is no point where any business “runs itself–” EVER      

3. Respect for the front – Often, a good back in an organization over-controls the people in the front without recognizing the energy, charisma, and weirdly enough–the chaos required to sell and drive sales and enthusiasm, so it’s critical to strike a balance and not to drown or stifle the front with controls and policy imposed by the back  

THE PLATFORM FOR MY POSTS

My posts in this blog will mainly center around this philosophy and using it to define and solve problems that arise in typical businesses.

My hope and dream is that my audience includes the following:

• My colleagues, clients, friends, family, partners (and weirdly–myself) to get a good insight and understanding of me and what I do.
• Business owners and managers who struggle with trying to manage tech people and employ technology–so many of us wake up every day think we automatically know how to invest in and employ technology because we can use a mouse, keyboard, and M.S. Windows until we actually invest in a business and realize it’s not that easy–I want to empathize with those people and share what I’ve learned and overcome.
• Aspiring tech professionals who are up and coming in this best of all industries, who may not realize how young and new this industry really is. Maybe you’re thinking of entering this industry and think that everything’s been invented already just because Microsoft, Google, and social networking explosions appear to have cornered everything and there’s no more room to have any new ideas or make any more money. Oddly, I ponder that for just a moment many mornings myself as I order my tea at Starbucks, and then I remember that a huge percentage of business professionals refer to any one of us–developer, DBA, or designer-alike as a “computer guy” or a “geek,” and that their neighbor down the street who “retired from IBM” is going to help them “set up their computers for their business” just because he “retired from IBM–” even though he was in sales. Your opportunities in this industry are endless, boundless, and infinite, and I’m your biggest fan, so if you’re in the Tucson area, I hope we can have coffee some time and talk about it. My posts are for you, too.

Enjoy my blog posts, I look forward to some good conversations.

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If you liked this blog, here are some other sites that might interest you:

• Connect with my business partner, Andrew Hollamon at LinkedIn
• A networking organization we co-founded–we have been die-hard believers in structured business networking for years: see ReferralTree.Net

Do you know anyone who has a technical project–large or small, such as a website, software project, or network setup that is stalled or half complete? I’m never too busy for a referral, so if you think I could help–feel free to drop us an inquiry by clicking here…