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Starting a small business: Advice?
I'm thinking of launching an application business on Facebook and MySpace and would love to get advice from anyone who's started their own small business. What are the major pitfalls to watch out for?
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2 Answers
I would start by identifying if you have a targeted customer willing to pay for a product where you can make a profit. Without these basics there is no business. My first thought on the two social networks you mentioned - users are free. If you expect them to pay for an application it may be an extremely difficult sell. We've not done a Facebook app at Vonei simply due to lack of interest in users paying for it. They all want it for free.
One could make a case for advertising revenue, but until you get eyeballs there is nothing advertisers would pay for. Prepare for a long run of time/loss before attracting enough eyeballs to charge for ads. I suggest you do some homework on these sites and identify potential paying users prior to going too far down that path.
I would also suggest you take a hard look at a specific target market. It is difficult enough launching a new business that you can't possibly be everything to everyone. Pick a niche, find out what they need, and see if you can provide a profitable product that fulfills that need. Having an early niche strategy will help guide your marketing and advertising efforts.
Good advice by A. Tacking on to that, remember, nothing is going to be more important for you than sales. You need to start with a good business model, identify how you're going to generate your leads, what those costs will be, and work your behind off on sales. Never lose site of cash flow and prospecting or you could be in for a world of hurt.
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