Bootstrapper’s Cascading Cashflow Case Study

Tuesday, November 13, 2007 at 11:45pm by Site Administrator

Bootstrapping - cascading cashflow engines

It’s true that some niches are more monetizable online than others. But what if you are not an authority in one of the more lucrative niches and can’t afford to hire someone? Being a generalist, I tend to fool myself into believing I can write about anything, but there are only a few niches that I can write about with a level of passion – which is key for a successful blog, but not necessarily a static site.

Now if you’re in the position that you feel your knowledge is not that monetizable, you still have a few options. I’ve been exploring a business model I like to call “cascading cashflow engines”. It is all theoretical, but applicable both online and offline. The gist of the whole exercise is to leverage what you do know into distributed projects that will collectively raise enough capital for your true startup goal. Applied to online publishing, this is an alternate financing method than blogging for startup money.

Cascading Cashflow Business Model:
Basically, I start with a few small projects that I can manage or can find volunteers for. The revenue for these projects (whether websites or something else) is used to fund the next level of projects. These second-level projects usually have some hired help – freelancers. Part of the revenue from the second-level projects is recycled, in hopes of producing more paid work for other people. The rest of the revenue is used to fund some third-level projects, which might have half-time or full-time people.

The revenues keep cascading down the project levels until there’s enough capital generated to launch the real startup goal.

Previous Entrepreneurial Mistakes:
Again, I’ll emphasize that this is a theoretical business model. I’ve been exploring it for years, but I made some serious mistakes before:

  1. Didn’t focus on a few areas of interest.
  2. Overcommitted resources and had to stop short, making collaborators angry.
  3. Bought too much equipment too soon. That is, I didn’t really bootstrap and suffered stunning financial losses as a result.
  4. Didn’t consistently apply kaizen.
  5. Didn’t take on partners (couldn’t find suitable ones).
  6. Over-relied on credit cards, and not even business cards with good rates.
  7. Didn’t plan to pay contributors/ hires a share of net monthly revenue.

I’ve rectified these problems on what might be termed my third phase of entrepreneuring, which is currently purely online, as a digital entrepreneur. I’m also replicating the successful online business models of some of my colleagues/ partners who are earning between $5-50K/month. I’m also exploring, with partners, web mashup tools and subscription sites.

While all this doesn’t guarantee success, early indications are that the success will come over time, now that I’ve learned from previous mistakes. My cascading cashflow engines will be harnessed over the next three years, in hopes of producing enough capital to bootstrap a film production company (complete with funding of my entry into film school). I know. I don’t like doing things the easy way.

How to: ‘Fire’ Your Bad Clients, Make More Money and Restore Your Sanity

Monday, November 5, 2007 at 2:37pm by Site Administrator

Clients are the bread and butter of any business. Without them, your business simply wouldn’t exist. So it can be hard for many business owners to think about sending clients away, especially those just starting out. But it’s inevitable that you’ll have a client that taxes both your resources and your personal sanity to the point where it becomes necessary to let them go. Don’t worry, you’re not crazy to send business away. Sometimes the best thing you can do for your business is to cut a client loose. It’s not always easy, but it will leave you with more time to concentrate on clients that are easier to deal with and more profitable.

Types of Bad Clients

Bad clients come in many flavors, but these are some of the most common offenders. If you’ve got one of these on your client list, consider showing them the door.

  • The Complainer: Don’t expect to ever do anything right for this type of client. Even if you deliver under budget and sooner than expected, they will still be disappointed for a reason they just can’t seem to communicate to you.
  • The Something for Nothing: These types of clients ignore the old adage and try to get as much out of you as they can for as little as possible. Often, they’ll get your initial estimate and expect the cost not to increase when they increase the size or duration of the project or keep adding on "little" things.
  • The Time Waster: Expect your time to mean little to these kinds of clients. They’ll be hard to get in meetings and when you finally get ahold of them, they won’t listen to what you’re saying. They’ll run you around with changes, pointless meetings, and time wasted waiting, and then complain how much they’re paying you.
  • The Aggressor: This type of client is the hardest to work with and the scariest to get rid of. They are often verbally abusive and threaten to sue for the slightest reason. Be especially careful when unloading these as they have particularly short fuses.
  • The Know-It-All: The know-it-all is sure that he or she knows how to do your job just as well as you do because they have a basic familiarity with the programs you use or read a book on the subject. What they don’t realize is that your experience and expert knowledge are really what they’re paying for. Nonetheless, they’ll question your every move and drive you crazy.
  • The Boundary Crosser: This type of client will ask you for your home phone numbers "for emergencies" and then call you on weekends and after hours just to check in. This kind of client taxes your personal life heavily.

How to Fire Them

Whether you have a client that fits one of these profiles or an entirely different breed altogether, when the time comes to part ways, do you know how you’ll go about doing it? Here are some tips on making the process as painless as possible.

  • Do it in writing. This will help to prevent misunderstandings and raised emotions. It will also give you a written record of your interactions with the client if you should need it to back you up later.
  • Make sure you get paid prior to terminating your relationship. You’re asking for trouble by firing a client who still hasn’t paid you, even though sometimes this may be the reason that you are firing them. As illegal and unprofessional as it may be, a jilted client may withhold payment for your services as retribution for letting them go.
  • Fulfill any remaining contractual obligations to your clients if it is at all possible or you may find yourself subject to the consequences of breaking that contract. If this is the case, you might want to bring in a lawyer to tell you your best options. Remember, you want to do the work you’ve promised to do, as your reputation is still at stake.
  • When letting clients go, be honest but not hostile or offensive. If you can’t think of any way to put your reasons for parting ways nicely, then tell them your business is changing directions or that you just don’t think you can complete their project in the manner or timeframe they hoped.
  • Don’t just leave your clients high and dry after you’ve let them go. They may not have treated you with respect, but that doesn’t mean you should return the favor. Recommend another business, preferably a competitor, to take the project instead.
  • If nothing else seems to work, jack up your prices. Either they’ll part ways with you themselves or the pain of working for them will be lessened by your increased paycheck.

While it might be difficult both mentally and financially to fire a client, in the long run you’ll be doing your business and yourself a favor. You shouldn’t let go of every client that is difficult, but if you’re hitting the brink with a client, it’s time to make a change. In reality, many clients that take up hours of your time are costing you more than they’re bringing in. By cutting these clients loose, you’ll have more time and energy to concentrate on bringing in new, more profitable business, and that’s really what business is all about.

Freepreneuring: 5 Ways to Monetize Free Content

Sunday, November 4, 2007 at 10:00am by Site Administrator

With a shift towards free content online, no doubt many entrepreneurs are wondering how they can bootstrap their business if they are not going to draw any sales revenue. It’s a scary thought.

I don’t profess to have a solid answer, but I do have some ideas. Here are a few ways that you can still monetize your startup, even while offering free content or services.

  1. Advertising. TV and radio were always based on free content supported by advertising. At least until Cable/ pay per view and satellite radio came along. If you are offering only free content, consider monetizing your website with relevant ads – preferably those sold direct, on a CPM (Cost per Mille, e.g., 1000) basis of pageviews.
  2. Freemium. The freemium pricing model seem to be popular with web applications providers. General access is free, but the features that make the application efficient for the target end users cost a few dollars per month. One non-web app that has scored millions of users worldwide with this model is Skype, the desktop VoIP software.
  3. Subscriptions/ pay per view. Build a subscription site where premium content is only accessible by members. This does require that you have initial free content to draw potential subscribers, and for you to build your authority online, in your niche. If you’re successful, the numbers are worthwhile. For example, several marketing sites charge $197-299/year, and offer very high quality content that is essential to some professionals. While building up your membership list, you might supplement with advertising.
  4. Freedom to pay. This is what Radiohead did: pay what you like. Stupid or brilliant? You decide. I was unable to find the “buy” link on their official site and ended up downloading someone else’s low quality copy. Very low quality. But I’m a Radiohead fan and would have paid anyway. And of course, if I’m in a city where they’re going to plan, I’m even more likely to go see these guys. This monetization model is very similar to “shareware” for software.
  5. Buyout. if you have enough capital to build your brand/ presence online, and gain substantial eyeballs in the form of free content subscribers, selling to the highest bidder is a great option. For bootstrappers, this has to be preceded by one of the other forms above, else you’re not likely to have enough capital on hand to reach this stage.

With the exception of maybe freemium and freedom to pay, none of these are all that new. Which monetization model you choose (or a combo) depends on what it is you’re giving away – knowledge or services. Products, on the other hand, are hard to monetize with any of these models.

Entrepreneurial Debt: 11 Reasons Your Startup Might Suffer Cashflow Problems

Sunday, October 28, 2007 at 10:30pm by Site Administrator

Businesses go out of business all the time. It’s a fact. And it’s almost always because of cash flow problems, possibly due to serious debt. It doesn’t always have to be that way, though – something bootstrapping entrepreneurs probably know better than anyone else. Look deeper at your business workflow; is there something about the way you’re running your business that might be resulting in extra costs? Consider the possibility that one of the following behaviors might be affecting you.

  1. Using desktop software. Most new businesses these days probably use software. But desktop software that you install on your computer can be very costly. Some require “site licenses”, which might mean you have to pay a fee for every person on your team – even if they are not going to use the software. Webware, on the other hand, is either free or paid per person. The cost savings can make or break you. If you have remote team members, at the least try web-based project management tools and meeting managers.
  2. Buying in bulk. Buying in bulk because “it saves money” is not a wise move, financially speaking. If you don’t need it, why commit funds? In the early stages of a startup, you’ll need cash for all sorts of expenses, and if it’s all committed in bulk quantities of items that are not expected to run out for a while, where do you get the funds for what you need right now?
  3. Being extravagant. Unless your impressing your clientele is an absolutely essential part of what you do, buy quality but affordable equipment, furniture, supplies. Chairs at $600 might be nice, but you can buy 3+ relativly good ones for the same money.
  4. Not delegating tasks. If your time is spent doing tasks that someone else can do cheaper – and likely just as well or better – then you’re potentially losing opportunities or simply not doing the bread and butter work. Delegate as much as possible.
  5. Not keeping receipts. Entrepreneurs working for themselves, or with just a few employees, are still in a mindset where they don’t separate personal and business expenses. Simple truth: the less receipts you save, the less you tax writeoffs you’ll have. If you’re really bad at it, and if your accountant is conservative when filing, you could reduce your tax returns by several hundred to several thousand dollars.
  6. Not paying bills on time. This goes hand in hand with buying too many items in bulk “to save money”. If you can’t pay for it with cash on hand, you’ll buy it on your business credit card, which could mean interest or “late fees” of some sort.
  7. Not collecting accounts receivable. Always been on top of payments owed to your business. Many new businesses that go under often do so because they experience growth that their cashflow cannot handle. Use web-based invoicing applications, which send clients automatic reminders. Some even accept payment into your bank account. You can also use Paypal invoicing.
  8. Jumping the gun. Launching too many projects simultaneously on limited capital means you cannot devote the time and budget each one requires to be nurtured to a successful state. So at the end of the day, you have several projects not earning but costing you money.
  9. Overzealousness. Cramming in too many features into a product/ service offering is as bad as launching too many projects. You fragment your resources. Instead, start with an offering that you can offer with great quality, then as revenue comes in, apply the principles of kaizen to add features as necessary, or on demand by clients/ customers.
  10. Not designing w/ scalability in mind. If you design a system or process that cannot be scaled up when the time comes, that could mean having to redesign from scratch and thus expenses you’re not prepared for.
  11. Not bootstrapping. Not sticking to the necessities of your business. This is a catch-all point. Bootstrapping essentially boils down to only spending on what is absolutely necessary. Increase expenditures as revenue allows, and come up with alternate, less expensive ways to get done what you have to. When the business grows and you have larger cash reserves, you can ease up on the bootstrapping, if you find it too restrictive.

A final suggestion if you’re concerned about your cashflow: check out our article The Poor Entrepreneur’s Toolset: 100 Freebies for Bootstrappers.

The 100 Best Business Finance Posts of All Time

Thursday, October 18, 2007 at 2:21pm by Site Administrator

In business, nearly everything revolves around finance, so it’s no wonder that it’s one of the most popular topics in business blogging. From financing to setting the value of your work, it’s essential to get good advice. These posts offer some of the best information that’s out there.

Funding & Earning

The acquisition of money is the lifeblood of any business. Read these posts to find out how you can get money through funding and focusing on earning in your business.

  1. How A Beggar in Grenada Uses Data to Optimize Donations: Check out this post to find out what your business can learn from a beggar.
  2. Open innovation and crowdsourcing: Learn how to finance your project by tapping into large crowds.
  3. Starting A New Business Over 60: Learn how to secure financing if you’re an entrepreneur of a certain age.
  4. The Art of Bootstrapping: Read this post for tips on developing your business without investors.
  5. Can You Make $3,000 in ONE Day?: Think outside the box to earn more money per day.
  6. Need Money? Looking For Another Business Loan? Perhaps There Is Another Option: Consider solving problems before automatically reaching for more money.
  7. Government Grant Money For Small Business: Learn the basics of getting government money in this post.
  8. Truth About Grants: There’s no free lunch–get the lowdown on the reality of grants.
  9. Why Women Entrepreneurs Don’t Get the Financing They Need: Find out why women are "playing small" when it comes to business finance, and what can be done about it.
  10. 10 Ways To Fund Your Business: From credit cards to friends and family, check out these alternative ways to get money for your business.
  11. The Fiction of 20%: Find out why it’s really not that important for venture capitalists to own 20% of your company.
  12. My Corporate Valuation Workbook: Get the Cliff’s Notes to financial analysis in this post.
  13. The Top Ten Lies of Venture Capitalists: Do you need funding, but keep getting blown off by VCs? Get to the bottom of what they’re telling you.
  14. How Entrepreneurs Can Find the Financing Help They Need: Take these steps to locate financing for your business in a responsible way.
  15. What are Venture Capitalists looking for?: Find out if you’ve got what VCs want to invest in.
  16. Focus on Your IPAs: Income Producing Activities: Small Biz Survival reminds readers to focus on activities that produce money.


Financial forecasting and planning is essential to ongoing success. Learn more about research and modeling in these posts.

  1. Financial Models for Underachievers: Two Years of the Real Numbers of a Startup: Redfin‘s Glenn Kelman lays down the numbers of a startup.
  2. Please Stop With Your Chinese Math: Don’t let market size deceive you–Chinese math is no good.
  3. Inexpensive Ways to Conduct Marketing Research: Get budget-efficient communications with your clientele using these ideas.
  4. The ABCs of Cash Flow Forecasting: Get the basics of cash flow forecasting in this post.
  5. How to use Inkling Prediction Markets for your business: Harness the knowledge of crowds to predict sales for your business.


Once you’re earning money, it’s important to use it wisely. Read these posts to consider how to effectively spend money in your business.

  1. 25 Gadgets That Actually Save Money: Laptops, power strips, coin sorters and other gadgets can actually pay for themselves in savings. Make an investment with these money-saving gadgets.
  2. Bootstrapping Tip: To rent or not to rent?: Find out if renting office space is right for your business or not.
  3. Even a Small Leak Can Empty Your Money Bucket Quickly: Avoid draining your hard-won earnings by stemming leaks in your business’ spending.
  4. Lease A Car, Don’t Buy It!: If you’ve got fleet vehicles, or just a few executive cars, take these points into consideration when deciding whether you should lease them or make a commitment to buying.
  5. Piggybacking on Your Neighbor’s WiFi: If you’re in a highly populated business area, chances are you have a pretty good chance of tapping into some free WiFi. This post considers the ethical and security implications of doing so.
  6. Discounts Abound for Small-Business Owners: Get these deals that are designed specifically for small business owners.
  7. A Few Ways To Save Money With a Small Business Opportunity: Get started cheaply using these tips.


Customers are essential to your business, so it’s important that you handle transactions with them properly. Learn how to value your customers and get them to pay their bills in this collection of posts.

  1. Ignore a Customer’s Lifetime Value at Your Own Risk: Don’t forget how much money a single customer means to you, or you could lose more than just their business.
  2. 14 Web-Based Invoicing Tools To Make Sure You Get Paid: These invoicing tools make getting money from your clients a breeze.
  3. What Happens if Your Clients Don’t Pay?: Learn how to handle non-paying clients in this post.
  4. Collecting Receivables: Jeff Cornwall encourages readers to wake up and smell the roses–and get customers to pay you what they owe.

Money Management

When you’re operating a business, money management gets more complicated. Read these posts for advice about financial managers and to get good ideas for handling money on your own.

  1. Make Sure Your Financial Advisor is Not a Loser: Free Money Finance marvels at the fact that a money "loser" is employed as a financial advisor. Read this post to find out the importance of avoiding hiring hacks like this guy.
  2. The Financial Messiness of the Entrepreneurial Life: Navigate the ups and downs of the financial life of an entrepreneur with these thoughts from Inspired Business Growth.
  3. Building Banking Relationships That Last: Make friends with your bankers, and they can help you in a crunch.
  4. For the love of $$$: Find out how the love of money can present obstacles to launching your venture successfully.
  5. Five Effective Ways to Re-Invest Your Profits: When you make money, what should you do with it? College-Startup answers this important question.
  6. Planners and Fees: Get smart about the financial planner that you hire for your business. Use these four points as a start to your consideration.
  7. Five Tips For Managing Your Finances on the Go: Many entrepreneurs are on the go and don’t have a lot of time to sit down and work on money issues. Use these tips and tools to take care of business without having to stop by the office.


Businesses are consumers, too, and you need to know how to fight back when you’ve been wronged by another business. Find out how to deal with common problems in these posts.

  1. How to Complain: Get the basics on this essential first step of the righting process.
  2. Can You Do Simple Math? Good, Then You’ll Soon Realize Why You Need to Resolve My Complaint: Learn how to reason with companies by spelling out what your complaint means to their bottom line.
  3. How To Take a Case To Small Claims Court: If you need to escalate to legal action, this is the place to start.
  4. Negotiate This!: Follow these tips to become a smart negotiator.

Business Development & Transitions

Whether you’re still brainstorming about ideas or or about to sell off your business, money is a big factor to consider. Take a look at these posts to understand more about its impact in development and transitions in business.

  1. Q&A: Selling Out to a Partner: So you’ve decided to go your separate ways–now how do you deal with the money? Learn how in this post from Bplans.
  2. Should You Quit School Because You’re Brilliant?: Business is booming, even though you’re still hitting the books. Is it time to throw in the towel on school?
  3. Show Me The Money: In business, everything has a price: Learn why you shouldn’t automatically turn down offers to buy your business.
  4. Income vs. Cash Flow: Why Growth Can Kill Your Business: Don’t let rapid growth kill your startup: take this advice from Business Pundit.
  5. How to Buy a Business in 10 [not so] Easy Steps: Take these steps when you’re shopping around for a new business venture.
  6. Making Money With the Boom Bust Blitz: Manage your assets and liabilities to your best advantage, and you’ll be successful no matter what stage of business cycle you’re in.
  7. Is starting a business impossible when you are the sole income earner in your family?: Pamela Slim takes on financial responsibility for entrepreneurs.
  8. Sell Your Business in Twelve Steps: Take these 12 steps when you’re ready to let go and cash in on your hard work.
  9. Q&A: The Balance Sheet When Buying a Business: Take these financial tips into consideration when you’re acquiring a new business.

Employees & Outsourcing

Your employees are perhaps your most valuable asset. These posts consider salaries, outsourcing, and watching out for losses.

  1. Does pay for performance pay?: Get more bang for your payroll buck by considering this question.
  2. 10 Ways of Overcoming Outsourcing Objections: Find out why outsourcing can work for your business.
  3. Is your business vulnerable to fraud?: Don’t let money slip through your hands by opening yourself up to fraud.
  4. Decide Your Success With Bookkeeping Outsourcing: Get someone else to keep a watchful eye on your accounting to save money and time.
  5. Give Your Employees More Rope, Not Money To Buy It: Learn why throwing more money at employees isn’t always the best idea.
  6. To Outsource or Not to Outsource: Consider whether or not outsourcing is right for your business by reading this post.
  7. Avoid Getting Gypped by Fraudulent Web Designers: Outsourcing web design can be a smart money move, but not if you get burned.
  8. Whistlelower incentives?: Consider whether or not you should financially reward employees that report trouble.


Whether you’re setting your prices or considering how much your time is worth, business is all about value. Learn how to set yours and find strategies to improve it in these posts.

  1. Whether or not to publish your prices: Find out whether or not you should make your pricing publicly available.
  2. Four tasks to increase values or prices in business transactions: Maximize your financial returns using these four strategies.
  3. Selling Yourself On The Value Of Your Time: It can be easy to forget to charge for your time, but it’s essential that you do so. Read this post to find out why and how.
  4. How Much Money Is Integrity Worth?: Increase your value by improving your integrity and reducing the risk of working with you.
  5. 6 Simple Steps for Sales Success: Follow these tips for sales and you’ll earn more from your clients.
  6. How Much Should You Charge For Your Web App?: The Instigator Blog answers this essential question.
  7. Will Work for MONEY: Are you tired of getting offers that ask you to trade your service for "experience?" Mind Petals is, too–read all about it here.
  8. Such a Thing As Too High of An Hourly Rate?: Learn why it’s all relative when it comes to rates.
  9. Be Proud of Your Prices: Learn how to stay strong in the face of clients who don’t want to pay what you require.
  10. Are You Short Changing Your Business?: Get down to the emotional root of why you don’t want to raise your rates in this post.
  11. Top Ten Signs You May Be Charging Too Little: This humorous post takes a look at pricing situations you should avoid.
  12. New Price Structure for 2007?: Base your prices on what value you offer, not what everyone else is charging.
  13. Business Ethics: Why Doing the Right Thing Pays Dividends: Learn why trust builds value in business.
  14. Dollars & Sense: Setting the Perfect Rates: Determine the perfect rate for your business using the guidelines from this post.
  15. Flip this product: Adding Value to an Existing Product by Dressing It Up: Sell profitable products using this strategy.
  16. Nine Factors to Consider When Determining Your Price: You’ll need to think about things like market demand and your audience when setting the value of your product or service.
  17. 20 Ways to Add Value to Your Products and Services: Increase your prices and customer satisfaction with these 20 ideas.
  18. Avoiding the horror of the sliding scale: This post asserts that you shouldn’t do sliding scale payments unless you’re in the business of helping people with money.
  19. Should the "Free" In Freelance Refer To the Price?: Watch out for "opportunities to build your portfolio." Success From The Nest says they’re bad news.


Although you can’t make money on an idea alone, they’re still vital to sparking a successful business venture. Take a look at these money-making ideas to consider how yours stacks up.

  1. Bottled Water Experiment: Neville proves that his idea to make money with no money actually works.
  2. Top 20 Dumbest Business Ideas That Made Millions…Or Not!: 10 of these dumb ideas made money, 10 of them didn’t. Consider whether or not your idea is on the million dollar side of the fence.
  3. It’s The Economics, Stupid–Why A New Idea Isn’t The Key To Entrepreneurship: Find out why money is more important than ideas in entrepreneurship.
  4. Top Ten Franchise Opportunities for $20,000: Take on these low cost franchise opportunities for easy entrepreneurship.
  5. Why Didn’t I Think of That Billionaires: Check out these billion dollar ideas that came from creating something their originators could be passionate about.
  6. Selling Notes: Neville experiments with selling class notes.


Advertising is often expensive, but there are ways to make your dollars stretch in this category. Check out these posts for strategies that will help you get more out of your advertising purchases.

  1. The Secrets to Free Advertising: Find out how you can create free advertising in this article.
  2. Getting Started with Pay Per Click Search Engine Marketing: Get the basics on launching a successful PPC campaign in this post.
  3. 6 Tips to Recovering From a Typo in Your Printed Sales Letter or Brochure: Oops! You just made a costly mistake. Here’s how to fix it without going broke.
  4. Spending Those Hard Earned Dollars On Advertising: Get the most bang for your advertising buck by considering the ideas in this post.
  5. 5 Steps To Turn More Leads Into Cash: Get more concrete responses from your ads using these strategies.


Taxes are a headache for anyone, but they’re even worse for business owners. Learn about important tax issues in these posts.

  1. The Right Way to Write-Off Business Expenses: Get the lowdown on writing off expenses like travel and vehicle usage.
  2. Tax Write Offs When Self Employed: Use these resources to get tax tips you can actually use.
  3. Planning a Business Trip: Make your business trip a tax deduction rather than a liability.


These posts cover even more great topics in business finance.

  1. 7 Practical Ways to Earn More By Working Less: Get more money out of your work time with these 7 tips.
  2. 30 Essential Pieces of Free (and Open) Software for Windows: Find free software that can help you run your business in this post.
  3. Online Rival to Quickbooks: Check out this finance software alternative to save money.
  4. Here is a picture of my 10 million dollar yacht: Don’t fall for these money wasting schemes that prey on wannabe entrepreneurs.
  5. Five Credit Card Fees You Can Avoid: Save money by giving these credit card fees the slip.
  6. Managing Time For Maximum Profit: Work smarter, not harder, and you’ll maximize profit.
  7. Does a CEO Have Any Business Posting on the Yahoo! Message Boards?: Consider the implications of publicly discussing your business finances by reading this post.

100 Tools and Resources to Value, Negotiate, and Sell Your eProperties

Wednesday, October 17, 2007 at 2:26pm by Site Administrator

Domaining is a hot market right now, but it’s been rightfully called a new wild west. It’s a daunting task to sell domain properties without selling yourself short, getting exposed to fraud, or other atrocities. Check out these tools designed to make selling domains easier, safer, and more profitable.

DIY Valuation

Determining what price you should set or settle for is essential. Your gut feeling may have you reaching for the stars, but your price needs to be grounded in reality. Use these tools to figure out the best price for your domain.

  1. MarketLeap: Use MarketLeap’s Link Popularity Checker to find out how many sites link to your domain.
  2. Self Domain Appraisal: Check out this thread to learn how to appraise the value of your site on your own.
  3. Google Adwords Traffic Estimator: Find out how many people are looking for your site’s top keywords with this tool.
  4. Appraisal Measurement Criteria: Check out the way Zetetic values domains.
  5. Valuation of Developed Websites: Consider the cost to create a new comparative website, traffic, revenue, and other factors when valuing your developed domain.
  6. Website Value 101-How to Appraise a Website: Get the basics on website valuation in this article.
  7. Search Engine Optimization Analysis Tool: Use this tool to test your domain’s receptiveness to search engine spiders.
  8. URL Trends: Find out where your domain ranks on PR, Alexa, and links. You can also take advantage of their URL comparison tool.
  9. Pay Per Click Calc: Use this calculator to figure out revenue from clicks and traffic figures on your site.
  10. Web Site Valuation Calculator: Use this formula for a quick way to get an idea of your website’s value.
  11. How To Sell A Website-How Much Is Your Website Worth?: Yaro’s number one rule? "Your site is worth as much as someone is willing to give you for it."
  12. Compete: Get traffic graphs for up to three domains at a time on this site.
  13. A Guide to Basic Variables That Make a Web Site Valuable: Read this thread from Webmaster World to calculate future profitability, traffic, and other valuation basics.
  14. Toolurl: Check rank position, link popularity, Google Page Rank, and lots of other important valuation stats.
  15. Alexa: Get traffic stats and rank information on Alexa.
  16. How to Value Your Domain Name: Check out this guide to domain name valuation from Internet Gold Rush.

Appraisal Services

If you’re unsure of your domain’s value, or just want expert opinion, appraisal services can come in very handy. These services and tools range from precise to ballpark, and free to fairly expensive.

  1. Premium Domain: Find out if you’re sitting on garbage or a domain that’s worth some serious cash by getting it appraised with Premium Domains.
  2. Estibot: This appraisal tool is good for getting a rough ballpark estimate of your domain’s value.
  3. Zetetic: Find out your fair market value with Zetetic.
  4. URLbuyers Appraisal: Get your domain name looked at by an individual appraiser on this site.
  5. LeapFish: Get appraisals and instant domain name values on LeapFish.
  6. Swift Appraisal: Find out how much your domain is worth based on Swift Appraisal’s eleven factors.
  7. The Domain Name Appraisal Scam: Arm yourself with knowledge against scammers who want to take advantage of domain name owners.
  8. Nameboy: Use this tool that values your domain based on length, word count, and demand of words and phrases online.

Market Watch

Sellers in real estate often look at comparable properties to predict how theirs will perform, and domainers should do the same. Use these resources to check out domains that are similar to yours and see how much they’re selling for, as well as who is buying them.

  1. Wikipedia: Comparables: Get an introduction to comparables here.
  2. DomainersHub: DomainersHub is a real-time domain listing monitoring system, which lets you keep an eye on the values of domains for sale, broken down by premium domains and everything else.
  3. DN Journal Year to Date Sales Charts: See the top site sales by rank on this page.
  4. NameBio: Domainers can get sales and comps history on domain names. With NameBio, you can find out information like sales price, auction results, and more.
  5. Sold Names: Check out the sales of past premium domains here.
  6. DN Sale Price: Get sales history for all published domain sales from 2003 to the present on this site.


So you’ve determined your value and you’re ready to sell. Now what? Put your property out on the market and start talking to buyers on these marketplaces for domains.

  1. Afternic: As one of the leading premium domain sellers and a marketing partner with the majority of the best registrars online, the odds are good that you’ll have a profitable sale on Afternic.
  2. dnScoop Marketplace: Sell your domain on this marketplace, and take advantage of its in-house valuation tool.
  3. Domain Marketplace: Sell your domain names with natural traffic, one and two word generic terms, and strong traffic on Domain Marketplace.
  4. Votan Web: Get exposure to web entrepreneurs, Internet tycoons, and other web developers on this sales site.
  5. V7n Network: On this network, you’ll get access to a large development community and be able to take advantage of a great sales format.
  6. Buy Sell Website: This marketplace has listings for both established and start-up websites.
  7. DomainState: This is a great place to sell whether you’ve already priced your domain or want to put it out for offers and auctions.
  8. Search Engine Forums: Get selling advice and post your domain on this forum.
  9. Domain Shows: Get free or paid listings on this domain marketplace.
  10. NamePros: Post your domain name for sale in this forum of over 69,000 domain name owners.
  11. GoDaddy Domain Name Aftermarket: Put your domain up for auction on GoDaddy’s site and you’ll enjoy low commission fees and high visibility.
  12. Web Hosting Talk: Get offers or check out specific requests on this forum.
  13. DigitalPoint: Digital Point’s Sites Forum allows you to list sites and find resources at the same time.
  14. Experiment: Selling a Domain Name on eBay, Part 1: eBay isn’t considered to be one of the best places to sell your domain. Nonetheless, this domainer’s willing to give it a try. Learn about his experience here.
  15. SnapNames: Get 30 day advertisement and an auction with lots of exposure as well as easy payment and transfers on SnapNames.
  16. Tulip Domains: Put your domain up for sale on Tulip Domains, and you’ll get offers via email that you can accept or reject, with a 5% commission to Tulip Domains.


One effective way to increase your domain’s value is to put some effort into the development of its brand. Full development is best, but these tools and resources offer shortcuts that help.

  1. Domain Development with Check out this article for a look into developing your domain with’s social network platform.
  2. Domain Parking Shortcomings: Content: Read this article for an argument to go beyond just parking your domain.
  3. Get a Rush of Traffic to Your Blog: Put BlogRush on your domain, and you’ll have links to relevant articles instead of a plain parked page.
  4. WP Cloner: You can maintain your blog on multiple domains with this tool.
  5. YellowDev: If you want to oursource your domain’s development, check out developers like these guys.
  6. Auto-Generated Web Sites: The Future of Domain Parking?: Find out how domain parkers may soon make pages look more like real web sites.
  7. Domainer: Hire Domainer to develop your premium domain names.

Negotiation Tactics

You want $10,000 for your domain, but your buyer is only willing to part with $100. Where do you go from there? Use these negotiation tools to leverage a better deal.

  1. How to Negotiate Domain Name Prices: Learn more about the art of negotiating and employ the tactics laid out in this post.
  2. Negotiate Like a Pro: Use these simple ideas for a look into the basics of domain seller negotiating.
  3. Domain Price Negotiation: Check out this basic rundown of domain negotiations from
  4. Keep Negotiations Secret When Selling an eBusiness: Find out why it’s vital to keep quiet about your domain sale in this article.
  5. Negotating A Deal: Check out these tips for domain buyers to see how the other side thinks.
  6. How to Negotiate: This site is full of ongoing advice on the art of negotiation that can be applied to any situation, including domain sales.


If you aren’t a great negotiator or just don’t have the time or ambition to take on an eproperty sale yourself, consider hiring a broker. Although they work on commission, they generally deliver a better profit than you’d be able to get on your own.

  1. Should I Use an e-Business Broker?: Read this article to determine whether a broker is right for you or not.
  2. Selling Your Domain Name Via a Broker: Check out this guide to using a broker from Internet Gold Rush.
  3. Impressive Domains: Impressive Domains goes beyond "list and hope" with an active team of marketers and experts in domain name negotiation.
  4. Business Broker: If you’re selling an established domain, you’re selling more than just a name–you’re selling a business. Enlist the help of this expert business broker for the best results.
  5. Working With a Broker When You Buy or Sell an eCommerce Website: Learn about how a broker can help you improve your domain sale in this article.
  6. Sedo: From brokerage to appraisals and transfers, Sedo takes care of the nitty gritty work of selling your domain.
  7. Website Auction Hub: Use Website Auction Hub’s broker service to get the most money out of your transaction and preserve your identity at the same time.
  8. iMerge Advisors: For small to mid-market domain businesses, iMerge Advisors offers expert brokerage services.

Financial Services

Once you’ve reached an agreement, it’s time to get paid! Fight fraud, accept credit cards, and make your life easier by checking out these financial service providers for domainers.

  1. Escrow Services: Get an introduction to how escrow services work here.
  2. Accept credit cards and protect yourself from fraud with
  3. With Escrow, you can protect yourself from fraud whether you’re buying or selling a domain.
  4. Ikobo: Use Ikobo’s money transfer services to safely accept money from your domain sale. They even have instant payment notification.
  5. PayPal: This favorite makes it easy to accept credit cards or just about any other kind of financial transaction from your buyer.
  6. Escrow AA: Escrow AA specializes in online escrow services.


Once you’ve gotten paid, it’s time to deliver. Get the lowdown on domain transfers with these resources.

  1. What’s the Difference Between a Domain Name Transfer and a Push?: Find out why pushing domains can make domain sales easier and faster for all parties.
  2. ICANN Transfers: Learn about ICANN’s transfers policies here.
  3. How to: Transfer Domain Registrar: Read about one person’s domain transfer experience.

Management Services

Whether you’re juggling 20 domains or 200, keeping track of their status can be a daunting task. Take advantage of these software and service solutions that help you stay on top of it all.

  1. Moniker: Use Moniker to take care of nearly everything to do with your domains: registration, portfolio management, appraisal, escrow and more.
  2. Rebel: Get the Rebel Portfolio Manager to manage an unlimited number of domains.
  3. dnZoom: With dnZoom, you can link your registrar and parking accounts, manage all of your domains in one place, and keep an eye on auctions.
  4. NameFollow: With this software, you can organize, track, and sell your domains.
  5. [email protected] Domain Name Management: For domain name management that’s less automated and more thorough, check out [email protected]
  6. Domainsoho: Check out this service and get in as a beta tester before it’s released.

News & Blogs

Domaining is a growing trend that’s sure to change and adapt in the future. Keep an eye on the industry with these blogs and news outlets.

  1. DN Journal: Get industry buzz, sales charts, resources and more on this online magazine.
  2. DomainerPro: Check out this blog for beginner domainers.
  3. Domain Food: Get headlines from the domain name industry aggregated on Domain Food.
  4. Seven Mile: Check out Frank Schilling’s blog for domainer news as well as information on internet infrastructure and paid search.
  5. The Domainer’s Gazette: Get news, musings and ramblings on the domainer industry here.
  6. Daily Domainer: This major new source covers topics like registrars, disputes, domain tasting, and more.
  7. Domain Names Weekly: Check out the Domain Stock Index on this site.
  8. Rick Schwartz: Learn about domainer strategies from the "Domain King" here.
  9. DotSauce: DotSauce goes beyond news and ICANN controversies with articles, reviews, and apps for domainers.
  10. Domain Name News: Learn about domain sales, news about domain companies, and other happenings in the industry on this new site.
  11. DNHour: Check out this Digg for domainers that lists popular news stories as well as domains up for auction.
  12. Whizzbang’s Blog: You’ll find lots of insightful news and domainer commentary on this blog.
  13. Conceptualist: Read this blog from domain entrepreneur Sahar Sarid.
  14. DomainTools: Check out this blog for the latest in domain industry news.
  15. Domain Name Wire: This news source has information about sales, services, and laws that domainers need to know about.
  16. Other

    Get even more assistance with selling your domain from these resources.

  17. Preparing a Website for Sale: Take note of some of the steps you need to take when putting your domain up for sale.
  18. Idiot Posing as a Lawyer Attempts to Steal Domain Names: Watch out for fraudsters like this.
  19. Domain Scams Increasing: Watch out for these scams when selling or maintaining your domains.

12 Creative Ways to Monetize Your Body

Wednesday, October 3, 2007 at 2:49pm by Site Administrator

Raising extra money for you or your business can be tricky. You’ve exhausted your investors, you’re fresh out of ideas for fundraisers, and you probably shouldn’t ask to borrow any more money from your neighbors. What can you do, then, to earn enough dough to keep yourself afloat? Use your most basic natural resource– your body! We’ve come up with 12 creative but effective ways to monetize your body, from earning extra cash to maximizing unlikely advertising opportunities.

  1. Become a walking advertisement: The article "Body Billboards" discusses a new trend in body advertising. The author focuses on how large corporations pay regular people to walk around painted, tattooed, or sporting large billboards to advertise their products. If you’re an entrepreneur, you may not be able to afford to pay someone else to advertise for you, but you can do it yourself. Wear a billboard the next time you go to a parade or sporting event and where you know TV cameras will be scouting out interesting, if not odd, characters.
  2. Go logo loco: Fashion designers are constantly throwing couture gowns at celebrities for their walk down the red carpet at shows like the Oscars and Emmys. The number of people those designers can reach through television, magazines, and websites is staggering, and they recognize the investment. No one can buy that kind of advertising. If you’re an entrepreneur, you can also reach a bigger audience than the one you’re currently attracting, by making the most out of your everyday outfits. Print your logo on t-shirts, hats, backpacks, and anything else you can get your hands on. is an excellent resource for creating promotional items. Create enough designs for you and your friends to maximize your company’s exposure.
  3. Sell your plasma: Selling your plasma is an easy way to make money quickly. Plasma, according to, is the "clear yellowish fluid portion of the blood that transports water and nutrients to all the cells in the body and is used for transfusions to people who have suffered shock, burns or trauma." You can sell your plasma up to twice a week since your body is constantly producing more plasma. Most medical centers pay between $20 – $35 each time you donate. Visit for a list of centers around the country.
  4. Tattoo Advertising: Believe it or not, companies are actually paying consumers to get all tatted up with their designs and logos. The company TatAD connects advertisers, consumers, and tattoo artists, as a way to provide "companies with loyal promoters and providing people with the compensation they deserve for being loyal all these years." recruits people to wear temporary tattoos, or logos, to advertise for certain companies. According to the TatAD’s company profile, "We’re all walking billboards anyway, so why not get paid to do it?"
  5. Become a sperm donor: In order to donate sperm, men have to undergo a screening process, but if you’re approved, the financial benefits are worth it. estimates that "you’ll earn between $50 to $200 per specimen," but the agency Building Your Family pays $250 – $500 for each sample. Click here to view an official sperm donor checklist.
  6. Have your eggs harvested: Donating your eggs isn’t quite as easy as donating sperm, but it does pay well. If you’re accepted as a donor, you will have to take certain hormones to increase the amount of eggs your body produces. A short, non-surgical procedure will then be conducted to retrieve your eggs. Check out the Integra Med America Web site for more information on egg donation and a link to fill out an application. Payments usually begin at $2,000.
  7. Sign up for a medical study: Participating in clinical research studies is a popular way of earning some extra cash. You can sign up for psychiatric studies, sleep studies, pharmaceutical trials, and even programs that study smoking habits and diabetes. This article discusses different types of clinical studies and how they operate. Visit Clinical Trials Listings to access a directory of all U.S. medical research studies. Search by disease, such as lung cancer, or keyword, like weight loss and migraines.
  8. Sell your platelets: Selling your platelets is a lot like selling your plasma, though you can only go once every two weeks. According to, you will undergo "an initial screening followed by the double-needle aphaeresis, which takes from 90 minutes to two hours." Volunteers usually earn around $50 per visit, so it’s still worth your time.
  9. Roll over and play dead: Who says you have to be able to act to get a TV gig? The popular show CSI is in constant need of new bodies to play their corpses, according to the article "Calling All Corpses for CSI," published on The article claims that "pay is lousy" but if you’re in desperate need of money, $136 isn’t too shabby for kicking back and putting your feet up for a few hours.
  10. Sell Your Hair: In Little Women, Jo nobly sells her hair so that her mother could buy a train ticket to visit her wounded father during the Civil War. Selling your hair nowadays can result in a lot more cash. The Web site operates like a classifieds section for hair: users post the length and type of hair, along with an asking price. Buyers pay anywhere from $100 – $1,500.
  11. Check out Chibi Vision: This marketing concept hasn’t hit the mainstream quite yet, but it’s still worth checking out. Chibi Vision, "a U.S.-patented brand new advertisement method, is a digital walking billboard that you can fashionably wear as a backpack," as described in Japan Today. The idea is that companies will create their own commercials or other marketing footage, broadcast it on the backpack, and pay people to carry it around.
  12. Sell your body parts on eBay: Don’t worry, it’s not as grotesque as it sounds. published an article which sheds light on another clever, albeit alternative way to monetize the human body. How does it work? According to the article, "Everywhere, people are getting into the act. Charles Hamburg, a software engineer from Dallas, Texas, is going to spend the next month with the Kotex Tampon logo emblazoned boldly across his back, for a reported sum of $48,998…Full-body advertising has arrived."

Making money by maximizing the potential of your own body is, well, priceless. These 12 ideas require little or no startup fees and can help get you back on your feet in no time.

Entrepreneur and Productivity Roundup – Sep 20, 2007

Thursday, September 20, 2007 at 11:30pm by Site Administrator

Part-time Bootstrappers
For those of you straddling the domain between salaried employee and full-time entrepreneur, Shawn Hessinger has a great article about being a part-time bootstrapper. He offers ten very interesting rules of the road. To wit, rule 1: don’t forget to change your shorts.

Reboot Your Business Strategy
It might surprise you to know that not every entrepreneur produces a business plan before they launch their business. And a key component of a business plan is a competitive strategy, which you need if you’re not breaking into a new niche. To this end, Business Mouth offers 6 steps for a competitive strategy. If you don’t have one, now’s a good time to produce your strategy.

Launching a Business Blog
Thinking of bootstrapping your business with a blog? Easton Ellsworth at Business Blogwire has an ongoing series offering advice on defining your business blog and how to launch it. He’s at part 3, as of this writing.

Distraction-Busting for Work at Home Types
Running a business from home has many advantages but also many distractions. Career Ramblings offers some tips for deflecting work-at-home distractions. They’re easy to follow tips, but might work for some and not for others.

Deflecting Entrepreneurial Bankruptcy
If you’re at the extreme end of a fruitless entrepreneurial endeavor, you might not only be fighting debt but considering bankruptcy. If so, check out GreatFX’s advice on when to consider bankruptcy. Speaking from what I’ve learned from others, it’s not an option you want to pursue unless there’s no other way. Talk to an accountant or attorney. Some firms offer a free consultation.

5 Common Problems a Bootstrapping Entrepreneur May Face

Saturday, September 1, 2007 at 11:00pm by Site Administrator

Entrepreneurs managing a startup should expect to encounter problems. Being prepared for them is what will help carry you through. Here are a few common problems that may crop up, and not just due to repeated business anti-patterns.

  1. Poorly defined partnership.

    Problem: Not making clear from the start the role of each partnership in a startup can result in an unequal workload between partners, or lead to someone slacking off, or some sort of unbalance.


    1. Do not let things go on, because when you finally do tackle the problem, you’ll do it with contempt and/or excessive confrontation.
    2. Have weekly status meetings. These can serve as reminders to slackers that they’re not doing their share.
    3. Play dumb. Tell them seem distant and you’re worried about them. This approach is dangerous. If you’re not skilled at this method, it can seem disingenuous and be insulting.
    4. Be direct. Ask them why such and such task isn’t done, but expect confrontation or deflection.
    5. Buy them out, if you don’t see change coming.
  2. Flash success.

    Problem: One of the biggest problems about success is that it can sink you. Unexpected success results in accounts payable for supplies, etc., exceeding existing cash flow – at least until acounts payable come in. Now you have to decide whether to take investment money or not.


    1. Collect on overdue bills.
    2. Offer a discount for immediate payment on new orders.
    3. Outsource some of the work, if applicable.
    4. Ask suppliers for credit, especially if you’ve been with them for a while.
    5. Pass on a big order. Just say you cannot accept it at this time.
    6. Refer the order to a competitor.
    7. Cut back on expenses.

    It may hurt your pride to follow #5 or #6, but sometimes it’s necessary.

  3. Requiring loans.

    Problem: If you do need an infusion of cash flow, where do you get it from? Bank, private loan, family, or Venture Capital?


    1. Not every business can take or even get Venture Capital. And even if your business qualify, taking VC is equivalent to agreeing to eventually give up your business. But if it doesn’t bother you,

    2. A small business loan keeps ownership with you, though the requirements at times might seem as monumental as for getting VC.
    3. Unlike Santa Claus, private lenders do exist, but they expect a certain amount of ROI, in a certan amount of time.
    4. While taking money from friends and relatives is potentially harmful, it keeps ownership closer to the heart than other solutions.
    5. Get a 0% APR balance transfer credit card. But only provided you think that you can pay off the balance within the alloted time.

    Before you decide, consider all the ways you can finance your business startup.

  4. Hardware costs.
    Problem: While there are many options for free software, there is no equivalent for hardware, particularly computers. Computer costs are down, but if you have a staff that all need computers, those costs add up.


    1. Offer flexible work schedules, with sharing of computers. If you set up each computer with network access and more than one user profile – or an Intranet-based framework running only web-based applications – anyone can use any computer that is available.

    2. Have remote teams, whereby employees use their own computers. In recompense, institute some additional profit sharing or private shares in the company.
    3. If you’re a software publisher, try extreme programming practices, where 2-3 teammates work together on a single computer. The practice is said to reduce errors and development time, provided teammates can get along, I suppose. (Hint: install a shower in the office – the cyclists among your staff will thank you for it.)
    4. Hire new employees only when absolutely necessary. Make sure that roles are clearly defined so that there is no duplication of effort – thus reducing the need for new employees and new hardware.
  5. Software support costs.

    Problem: Open Source software is often free, but sometimes support costs extra.


    1. Choose your software carefully. Many Open Source applications have enthusiastic user communities where generous people will answer your questions free of charge. Hopefully, you pay it forward and offer help where you can – even if it’s at another such community.

    2. Learn on your own. If you have a bit of time, you might surprise yourself. I know many non-programmers who taught themselves the basics. These days, designers and bloggers might learn just enough to tweak Open Source code to their needs.
    3. Hire someone’s nephew/ niece on an affordable hourly basis, as necessary. If they know the software, they’ll likely be up to date on latest bugs, fixes, etc., simply because they’re young and have infinite energy to be learning such things.

Whatever legitimate solution keeps you from spending more than you have to is a bootstrapping way to do it. If you can, try creative solutions.

Rent or Buy Office Property: 7 Questions to Ask Yourself

Friday, August 17, 2007 at 9:00pm by Site Administrator

Not all entrepreneurs and startup businesses are launched out of a spare room or garage. There are times when having a “real” office is more appropriate. If this is an office you’d like to have long-term, you might be wondering whether it’s worth buying or renting.

A few questions to ask yourself:

  1. Necessity.
    Do you really want a mortgage? Is it absolutely necessary? Do you know why you really want to buy property rather than rent an office?

  2. Business value.
    Can you write off enough of the mortgage to make it worthwhile over renting? If you’re running a business, you should be able to write off rent as well.

  3. Business value, part 2.
    Is there any overwhelming reason that once you set up your business office, that you have to stay there long-term? If not, then renting leaves more option for moving later.

  4. Affordability.
    Can you afford the mortage? Obviously, if it’s not about the same as if you rent, you have an added financial burden that a startup business doesn’t need.

  5. Property taxes.
    Have you factored in property taxes and the fact that they’re paid quarterly in most cities? With rent, it’s incorporated and isn’t a surprise each quarter.

  6. Incidental costs.
    What about heat, hydro, etc., costs? Have you accounted for these in your operating budget?

  7. Maintenance costs.
    For example, if you live in area that has snow, you might be responsible for clearing it within the permiter of your property, else be liable for accidents and injuries. And what about the cost of repairs, plumbing problems, etc.


Another consideration, if you’re choosing an office over working out of the house, is break time. When you’re at home, it’s easy to take a quick nap after a long day, then get back to work. It’s a little bit harder at an office. And since startup entrepreneurs are often trying to wear every hat instead of delegating tasks, they’re usually easily worn out.

Type of Office

If you decide that buying is still worthwhile, there’s still the question of what type of property? A work/ live studio might be your ideal office type. Then again, if your workspace is too comfortable, is there a temptation to goof off? If not, a work/live studio or a loft that you can have customized are good for a startup. There’s just enough professional atmosphere to get buy, and there’s living space as well. The fact that you might be in an old warehouse can lend a quaint atmosphere. [I know that in Toronto, Canada, for example, it's been hip for a long time to create startups in old warehouse lofts. And there are lots of those in the Big Smoke.]

How Much Down?

I know someone who is self-employed and went from renting a house at $1500/m to a mortgage at much more than that. He used his rental home for his business office as well, which he’s also doing with the new place. Was it a good move? I don’t know. He seems to be fine with it, despite the additional cost. However, his business has been around for 10 years and is well-established. He’s good at saving money, and always builds a sufficient down payment before buying, even if he’s buying just a car.

If you think you can manage a mortgage, your necessary down playment will vary. Sure, there are nothing-down situations, but let’s not get into that. (Doing it wrong can bankrupt you; I’ve seen it happen to people I know well.) Obviously, the more you save up the better. But if you cannot save up at least 10%, if not 20%, in down payment, you probably don’t want to buy. You just end up with a lot of debt. Personally, I wouldn’t buy a property until I had at least 30-40% down. But that’s just me – lessons learned from lots of business mistakes.

How’s the Market?

An Oprah show segment earlier this week highlighted that in the U.S., there’s a downturn in the real estate market. It’s currently a buyer’s market. Still, that doesn’t mean you should buy, if can’t answer yes to most of the seven questions above.


If you live in most English-speaking countries other than Canada, you can get at least 4.5% interest for an Online Savings Account (OSA). (In Canada, it’s less.) Sticking your down payment into an account should generate enough money to make a dent into your regular rental cost. For example, 5% on every $10,000 is about $500 per year in interest, or under $50/month. So if you have $30,000 in down payment saved up, that’s roughly $150/mth in interest, which you could apply towards the cost of renting instead of buying.


Ultimately, you have to do what’s best for your business, and there are complex factors that determine that. But if you truly follow the bootstrapper credo, buying anything when it’s not absolutely necessary yet is just plain financially bad.

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