Christmas 2011 has come and gone. I think I will come up about $4,000 short of my goal that I set back in January. While it does suck that I won’t hit the goal, the fact that I’m only $4k short means I had a great year. I actually had 200 less orders in Dec 2011 than Dec 2010, but surprisingly I made way more in Dec 2011 with less orders. My margins have increased very nicely.
So far, there have been only a few returns or messed up shipments.
So what’s new for 2012?
I am feeling a need for business diversification. You never want to put your eggs in one basket. Right now I have 2 very different businesses, ecommerce and a service. They are 100% independent of each other.
Within ecommerce, you can diversify by going into totally different niches. I think you have to do this in case something catastrophic happens in your niche. What if Google slaps my sites? What if Walmart decides to order 100,000 units and sinks the market? You never know. So I can choose to diversify by opening up more stores. But to be honest, opening stores is no longer exciting to me. It’s so cookie cutter to me.
The service business can also get devastated by things beyond my control.
But the nice thing is that right now I have 2 diversified businesses. However, I think that 3 independent businesses would make me feel alot more comfortable.
So I’ve decided to get into a totally new arena. I will be opening an SEO company and also a website rental business. The SEO business is self explanatory. In fact, I get asked often enough to help with SEO services that I probably should have done this a while ago. The website rental industry is fairly new. I have been thinking about this for probably at least 2 years and just never pulled the trigger. I met this 17 year old kid who started this earlier this year and made $450,000 in 3 months. Now he was doing something different in that instead of renting the website to the company for $5000/mo, he negotiated a deal that gave him 10% of the contracts that his website brought in. Needless to say, the company landed a $4.5 million dollar job through the site!
The premise is fairly simple. You create a website, get it ranked for certain terms and then rent the website out to a business. The nice thing about this business is that it is very low maintenance and has high returns. You can’t even compare the amount of work and money in real estate that you need to do to make $300/mo cashflow to a website.
I figure that it would cost me at the most $500 to make a website that I could rent out for $500-$1000 a month. I wonder if I should rent it out on a 3 month trial at $250 first. If it works well, I can jack the rent up to $1000 a month. I bet they’ll want to sign a long term lease at that point! The nice thing about this is that I create an asset that I can control. I can control the lease and if the people don’t pay, I just shut it off or go to someone else.
I guess I will never know how this will work until I do it.
I haven’t talked about my REI in a while. I guess that is good news. Actually writing this post just reminded me that I need to contact my tenant in Chicago. He likes to pay for many months at a time. I think he paid for Sept-Dec in one check, so I need to email him to remind him that January rent is due.
My SLC townhomes are almost 6 years old. My property manager is telling me that the carpets need changing soon. My PM is telling me that the rental market is good as nobody is buying and everyone wants to rent. That’s good for me as a landlord but bad for me in property values. I guess that’s why they say you need to buy and hold!