Critical Financial Mistakes I Made As an Online Entrepreneur

Guest Contributor

By Guest Contributor
Posted on Thu Sep 27, 2012

More Columns »

Critical Financial Mistakes I Made As an Online Entrepreneur

Charles & Hudson / Flickr source

I graduated from college in 2009 with a degree in journalism to find that newspapers were suddenly on the endangered species list. I’d planned to be a journalist my whole life. My parents are both retired newspaper reporters, and growing up I saw firsthand just how challenging and rewarding the field of journalism can be. Plus, I love words and stories and pushing boundaries with words and stories. I’ve never been able to imagine myself being anything else other than a journalist. When I graduated and couldn’t find a job at a newspaper (online or offline), I decided to start my own online newspaper.

I called up some of my friends from college and convinced them to help me out. We had interesting things to write about, and we wrote about things from interesting perspectives. For various reasons, we all thought that would be enough to launch us into Internet stardom.

None of us had Internet marketing experience or knew the first thing about monetizing a website. And, as you can probably guess, we failed. We failed epically, and we all lost money and time. Now that I have a few years of experience freelancing for successful online publications under my belt, I realize what we did wrong. We didn’t think about making a profit. We just assumed it would come to us if we kept on doing what we had been trained to do: write.

I learned a lot and made a lot of mistakes as an online entrepreneur. To help you avoid making some of the same mistakes I did, here are some of the many ways I goofed up financially:

I forgot what I learned about the economics of one unit

I took several economics and one business class in college. In at least one of those classes, I learned about the economics of one unit. Essentially, the economics of one unit means that your business will only be profitable if you know you’ll be able to make money off of one of the things you’re doing. In other words, you have to know you’ll be able to sell at least one thing before you can plan on selling enough things to be successful.

I dismissed the economics of one unit when I launched my business. I thought that because other online newspapers achieved success, I could too. However, I didn’t have any sort of concrete plan to monetize our online newspaper. Not having a plan to make money from the beginning definitely started my business off on the wrong foot.

I quit my day job

Like many recent graduates of journalism programs, I found myself working in the food industry after graduation. Once I had convinced a few of my college buddies to help me launch my online newspaper, I quit my job, deferred all my student loans, and moved back in with my parents who reluctantly helped support me as I launched my business. After several months of putting endless hours into the newspaper, we still hadn’t made any money, and it was becoming apparent that none of us knew how we were going to make money.

By the time we started learning important things about SEO, social media, and how to attract traffic in general, six months had already passed, and we still hadn’t made a dime. We were all exhausted. I had completely drained my savings, and my parents were ready for me to rejoin the workforce and live on my own again.

I didn’t research the competition in our niche

Our online newspaper was basically a place for well-educated 20-somethings to explore political and personal issues as well as comment on the latest social science research. There are a lot of online publications that serve the same purpose ours did. And we didn’t have anything in particular that made us stand out. We were all good, thoughtful writers, but we were never really able to step up our game enough to truly compete in our niche. If I’d researched possible niches before launching our website, I probably would have been able to find an untapped niche we could have dominated. Instead, I tried to make money doing what everyone else was doing, and it cost me.

As you can probably tell, the fall of my business and the financial woes it caused me could have been avoided with better planning and more research in the beginning. I’ve since recovered from my experiment as an online entrepreneur and am enjoying a relatively profitable career as a freelance writer. I don’t think I’ll be launching another online newspaper anytime soon. If you’re fresh out of college and want to start your own business, don’t make the same mistakes I did, and get ready for a stressful, crazy, and exciting ride.

Eliza Morgan is a full-time freelance writer and blogger. She often writes for businesscreditcards.com where she specializes in small and independent business topics. If you have any questions, email her at elizamorgan856@gmail.com.

 

Post a Comment