Small Business News

To be successful online, you must change the way you think about your website. As a matter of fact, your website is no different from an online cold-call. With cold-calls, you only have a few seconds to impress or connect with the individual on the opposite line or you’ll end up losing the account.

It’s no different with your website. If you don’t have what the visitor wants in a clear, readily accessible and aesthetically pleasing manner, your online cold-call is going to fail and you will end up losing business.

Online competition is fierce. The Internet has become absolutely massive and is growing by the day. You would be hard pressed to find a company that does not have a website. Making yours stand out from the crowd is a crucial part of your business’s success.

4 problems with having an average website:

1. You cannot effectively implement a PPC (pay-per-click) campaign, because people are going to visit your site, you’ll be billed for the initial click-through, but if your customers leave your site after only a couple of seconds of looking at the homepage, you are never going to see any return on the investment.

2. If you’re selling a B2C product and your website is not pristine, visitors are going to question whether or not you can actually deliver on your promises.

3. Again, if you’re selling a B2C product, a bad website may make the visitor think you are halfway across the world, thus prompting them to look elsewhere.

4. Regardless of whether it is a B2B or B2C, the consumer or corporate decision maker is not going to feel comfortable about the level of support you can possibly provide. After all, if you can’t maintain a well formulated website, how are you supposed to maintain strong client relations?

4 tips to decrease your bounce rate and increase your sales conversion rate:

1. Give the end-user access to resources related to your product such as articles, videos and just about anything else that will peak their interest. Articles will show the visitor that you are an expert on the particular subject you are discussing. Conversely, scraping content from the New York Times does not look as appealing.

2. Pictures of the employees and company management with a brief bio make up for not making face to face connections. People want to know whom they are buying from. In my opinion, it is best not to wear a suit; business casual will do. You want to come across as friendly and personable.

3. Make your website easy to navigate. The less the visitor has to hit the “back button” the better. Have clear links to various sources on each page and make sure to link to related content in each article or page.

4. No outbound links including to a blog.  Since you’re going to heed my advice and write your articles yourself, you’re not going to have to link to the site that you got it from. Keep the user on your site. I think I have 5 outbound links on our site of more than 200 pages.

Following these tips and avoiding the potential pitfalls I listed will go a long way to ensuring your site is indeed your best friend, and not your worst enemy!  What other tips do you have for the community?  Share with us in the comments below.

Ken Sundheim is the founder of KAS Placement, which is a 5-year-old company with nearly 10 employees and growing at a very rapid pace. Read more about Ken here.

Business and self-help gurus spend a lot of time advising people on how to achieve success. Yet “success” is not always readily understood. One person’s definition of success can differ greatly from another’s, such that someone else’s success advice might not fully apply to you. Without knowing what you believe success to be, it’s easy to get sidetracked following the advice of those with different or even opposite beliefs. If you define success as a balanced life of family, health and finances, for instance, the advice of someone who is unreservedly all about making money will not be of much help.

Those unsure of how to define what success means to them are encouraged to consider the following.

What Are Your Core Values?

No one can truly define success for themselves without first knowing what their core values are. In essence, your core values encapsulate in few words or sentences what you are all about. Popular men’s website, ArtOfManliness.com, describes the importance of knowing your core values thusly:

“When you don’t know or you haven’t clearly defined your values, you end up drifting along in life. Instead of basing your decisions on an internal compass, you make choices based on circumstances and social pressures. You end up trying to fulfill other people’s expectations instead of your own.”

AOM goes on to list about two dozen possible core values you could build your life around, including education, balance, fun, self-reliance, love, wisdom, health and integrity. Core values are just as important to women as they are to men. Without them, it’s easy to find yourself inadvertently chasing someone else’s dreams because they “sound cool” or seem interesting. True success, however, is that which will bring you lasting happiness and satisfaction. Thus, before you can map out what success means to you, it will be necessary to decide what your core values in life are.

When Do You Feel Most Fulfilled?

A lot of people simply pursue things they believe will impress others or make them envious. Whatever elevates their stature in the eyes of other people, they believe, is “success.” In fact, this is not the ideal way to define success for yourself. Remember that true success is that which will make you happy. Therefore, as counter-intuitive as it might sound, you need to focus more on your own appreciation of different life choices than on how others will react to them.

We’re often told, for instance, that the whole point of going to college is getting a degree in a high-paying field. Yet there is no rule of life stating that you must do that. If you love philosophy or music and are willing to accept a lower salary in order to do those things, there is nothing wrong with doing that. On the other hand, perhaps you truly are enthusiastic about high-paying careers like business, law or medicine. In this case, it just so happens that what fulfills you is also something that causes others to take notice. What matters, though, is always whether you truthfully like the path you are on.

Try to reflect on those times in your life when you felt most happy and fulfilled. Chances are, the ability to experience moments like these as often as possible is what success means to you.

Take The “Typical Day Test”

Admittedly, many of us have trouble untangling our own definition of success from those of other people. A test of some kind is needed in order to be certain. Fortunately, such a test is readily available and can be used by anyone who is unsure of what success means to them. In his article How to Choose a Career, writer Alex Epstein explains the “typical day test” as the final step of validating your career choice:

“Write down, in as much detail as possible, what an average day in your career will be like. What type of work you will be doing, what your coworkers will be like, how much relaxation time you will you have, how much time you will have with your spouse, your friends, what type of house or apartment you will be living in, and anything else relevant to your quality of life that you can think of. This will serve the purpose of making your future career as real to you as possible.”

The typical day test applies to success in general and should not be limited to just career choice. Apply it to whatever you currently believe success to be. Imagine for a moment that all the obstacles you face have been overcome and that success as you define it has been fully achieved. Next, ask yourself whether and how much happier you would actually be. If your vision of success was largely based on money, you might be disappointed. A Princeton University study found that high-income people are “barely happier than others in moment-to-moment experience, tend to be more tense and do not spend their time in particularly enjoyable activities.” In any case, strive for a definition of success that shows you being genuinely happy when put to the typical day test.

The Takeaway

The key to defining success for yourself is to be realistic about what in life will actually satisfy you. Instead of getting caught up in the opinions of others, look inward. Choose a path that you will be happy about and proud of whether anyone else is or not. This way, achieving your goals will feel like success instead of a hollow substitute for what you really wanted.

About the Author: Dan Wesley is the CEO of Credit Loan. Creditloan.com provides the help you need with any consumer finance issue. From auto loans to payday loans, there are so many articles for you to choose from. If it’s a free credit report you are after, this is the place to be.

Choosing a distributor should be looked at as forming a partnership—your business needs the distributor and the distributor needs your business. Both parties should consider the best interests of both parties. When looking for a distributor, word-of-mouth referrals from trusted sources are usually the best bets, but if no one can refer you, try the Yellow Pages. Motivating distributors to carry your line can be difficult if your product is entering into a market that’s already flooded with similar items. Executive sales coach Tony Parinello advises:
Go to the web sites of the top five suppliers of competitive products and services to find out who the local distributor is in your city and how to learn more about their program. You will want to compile a complete package of your product’s unique selling proposition, marketing plan and product support plan. Then contact the distributors you’ve found and ask the following questions: Are you in need of a new product to represent? What margins would you have to make on a product for it to earn your top-of-mind? What’s the best way for you to evaluate my products?
If you are in need of product for your company, there are several things to look for in a distributor. A good distributor will: ask questions about your business before they offer you any ideas; find exactly what you need, no matter how specific it is; possess fair prices; provide quality customer service and products; have concern for your business and its growth; be local.

As part of our ongoing Young Entrepreneur Interview Series, we are lucky to have secured an interview with the founder and chairman of HostGator, Brent Oxley.  From growing his company from a one-person operation in his college dorm room, to now hosting sites for over 225,000 customers, Brent really has a fascinating entrepreneurial story, and a lot of information to offer young entrepreneurs looking to have the kind of success he has had.  Enjoy the interview, then be sure to share your thoughts in the comments!

Brent Oxley

Founder of HostGator.com

Twitter: @hostgator

1. The best way to finding success is by forging ahead through failure. If my previous business ventures hadn’t failed I wouldn’t have ever of founded HostGator. Had my past relationships not failed, I wouldn’t have been blessed with my beautiful wife Jessica who I’m happily married to.
2. Reputation is everything in business! The honest approach in the beginning will most likely cost you money, but for the long run, it will never stop paying dividends.
3. You have to be adaptable to anything life throws at you. You will be hurt by some of those who you love and trust most in life and business.

HostGator has seen strong, steady growth for quite some time now.  At what point did you realize you had hit on something big?

I’ve never had that single defining moment where I stepped back from it all and have said “wow”. There have been some really cool moments along the journey in which I’ve taken a short pause such as dropping out of college, ranking 21st on the Inc 5000, Michael Dell personally emailing me, and many more.

How have you gone about getting investors for your businesses (if applicable)? Please talk about some things you’ve learned in this regard.

HostGator has never had an investor other than being 100% owned by myself. I started HostGator in my college dorm room with about $2,000 in my bank account. I’ve since grown it one customer at a time from reinvesting most of what it profits.

I’ve spoken to many investors over the years that have done nothing but wasted my time and in turn have slowed down our growth.  They will lie to you, have too many strings attached, and will always try to lowball you, no matter how much you stress what you’re looking for is firm and not to waste your time.

What three pieces of advice would you give young entrepreneurs interested in starting a new business?

1. NEVER have a partner. If you can’t find a way to do it alone your plan is doomed from the very beginning.
2. NEVER use credit unless it’s paid off in full every month and you are getting cash back rewards.
3. And last to invest every penny and every second of time back into your business.  This starts with living with your parents or a friend, switching to a cheaper cell phone carrier, downgrading vehicles, etc. The more you sacrifice in the beginning the greater your riches will be sooner than later.

Do you believe there is a formula for being a successful entrepreneur?

I believe becoming a successful entrepreneur is all about one’s state of mind. Very few people are able or willing to accept responsibility for the decisions they make and/or the cards life has given them.  You can either sit around complaining and coming up with excuses, or you can go do something about it.

How do you define success?

I define success as being able to achieve your goals while finding happiness in the process.

HostGator's Houston Office

It tends to be less expensive to cut out the middleman in business transactions. The same applies to purchasing, which, for a starting entrepreneur or business venture can already be costly enough. Buying directly from China enables businesses to obtain parts and raw materials in bulk for less money. Do your research; check out the companies selling what it is you need, and look at their sample products. For a full catalog and a detailed description of the product(s), you will need to ask the company for complete product specs—they will not provide this over the internet. China manufacturers are educated and know their business, but their English may be limited and their websites tend to be basic. Do not let this deter you. Treat them with the same respect you would a local company. Communication with China companies might be slow, as they prefer to deal with businesses they believe are worth their time. Prove yourself worthy of buying direct by adding a signature to your email with your company information so they can check you out and see that you’re legit. Having a webpage will also increase the likelihood of a response. Before proceeding with a sale, secure a shipping account with FedEx, UPS, DHL or TNT. Check out sites like Alibaba, Made-In-China, or Global Sources to see what is available for purchase and get an idea of pricing. Global Sources has a YouTube video detailing what buyers should know when conducting business with China suppliers and manufacturers.

I spent a week this August in Northern Michigan and watched as my wife and daughter fished. For me personally – I just take them off the hook and watch as my “girls” do their thing. As I sat their doing my favorite hobby, thinking about entrepreneurship, I pulled out my iphone and made some notes. It was the genesis of yet another blog post. I hope you enjoy it. Oh and lest you wonder, that Pike was 32 pounds and 4 feet long. We had to bolt the darn fish to the deck to keep from tipping. Gloves — it was really slippery. Taste – the pike patties were excellent even my 4 year old daughter thought so.

1) It’s easier to land a fish if you know what kind you’re going after.
2) I’d rather fish in a stocked pond than a big ocean.
3) If you use the same old approach as everyone else you’ll get the same results as everyone else. That’s not always bad but it may take a long time to land a trophy.
4) If you want to land the big fish you gotta work harder and smarter than the others angling for the same prize.
5) Flashy and loud works some time but never as well as being there when they need you.
6) The more times you try the more times you stand to win.
7) Preparation may not always mean you’ll do better than the next guy but it sure improves your odds.
Not just experience but learning from your experience greatly improves your odds at success.
9) Sometimes you’re the fish, sometimes you’re the worm.
10) If you tangle the line you can always re-measure and start again.
11) Learning from those that have come before you greatly decreases your learning curve.
12) Sometimes surviving is as much about a pan full of small guys as a trophy. They both fill your belly.
13) Beginners luck is one thing but catching enough to eat every day is the true sign of expertise.

Follow YE Business Coach Dan Nichols – @yecoach

I had a cool opportunity to touch base with Daven Michaels who has created a really cool company helping entrepreneurs with their virtual assistant hassles. I’ve personally used a VA or 2 in the past and found the same experience Daven found before he launched his business. I got great service for a couple days and then they fell off my radar screen completely. Not only does his company train the VA for you, but you get to interview your Virtual Assistant to be sure you’re the right fit. Think of all the things you spend your time on that sap your entrepreneurial creative juices including but not limited to;

Facebook, Twitter, Emails, Calling Clients, Data Mining, Customer Service, Web Design, Blogging, Research, Establishing JV’s and the list goes on…

I am going to be hiring a virtual assistant in the weeks to come. To me it’s a no brainer as to where I should go to do that – 123Employee! ALSO, from a technical perspective I had a first. My guest shows up as half a person… Daven is actually a complete person despite the video wherein he shows up only half way. Geez… we may have to re-shoot this video (once I get time — yeah… right). Watch as Daven shares his entrepreneurial journey, why he knew the niche for virtual assistants was growing and why he knew he could be the guy with the right solution to afford-ably help all of us entrepreneurs. Now with 350 plus employees he is on a mission and we can all benefit from his success.

NOTE: A Special Offer for YoungEntrepreneur.com’s audience including the cool bonuses and freebies Daven spoke of – follow the link > Here

Virtual Assistant Information – How To Hire & Where to Start from YECoach on Vimeo.

Remember if you want to learn more go here – Virtual Assistant Info

For most of us, the concept of launching into a business venture with little or no capital, and trusting to our instincts, and the ability to work miracles on little or no budget, sounds like madness. To the entrepreneur, however, it sounds perfectly reasonable.

In fact, every day, around the world, millions of entrepreneurs decide to go for it – even though they don’t have multimillion dollar backers.

If you can’t find funding for your business, or if you’d rather go it alone, and build your company from the ground up the hard way (sounds crazy again, but many people do) then you’re going to have to learn to bootstrap!

What Is Bootstrapping?

Most seasoned entrepreneurs out there will know exactly what the term bootstrapping means. It’s the process of building a business from the ground up, with no outside funding.

The term comes from an old story about Baron Munchausen, who used his own bootstraps to pull himself up – similar to the self sufficient nature of the bootstrapping entrepreneur.

Why Is Bootstrapping a Good Idea?

When you first start dreaming of becoming an entrepreneur, chances are you are imagining hordes of financiers battering down your door to offer you money. That’s unlikely to happen, but even if it did, it would not come without a price.

You see, when you accept funding, whether it’s from an angel investor, a venture capital firm or a traditional bank, they’re going to want to have some say on how things are done. That means less autonomy for you, the entrepreneur, to build the business you’ve been dreaming about.

With all that money at your disposal, you’re also unlikely to ever learn the true innovation, invention and budgeting that a real entrepreneur needs to understand in order to keep a business going when times are tough. Make no mistake, it’s a fact of life, and of business, that sometime, things will go bad. If you bootstrapped your business into being, rather than accepting funding from the outset, you will already have the skills to navigate tough times, and come out looking great!

Bootstrapping Impresses Investors

All ideals and romanticism aside, however, chances are, at some point, your business will need funding. If you, the entrepreneur, can stand in front of potential investors, and show them exactly how you built your business from the ground up, with no outside aid, you’re far more likely to impress them than if you’d simply used other people’s money to create your company.

Going to a group of potential investors having bootstrapped your business into success only proves to them that you have what it takes to be an entrepreneur, and that you can do the same with their money. Nothing is more likely to make them take a risk than that!

How to Bootstrap

If you can’t find funding for your business, or don’t want any, then you’re probably going to need to bootstrap. Here’s how:

• Start small. We’d all like to take on big contracts, open fancy stores and drive a luxury car. However, when you bootstrap, you have to start small, and work your way up. Choose manageable first goals, and achieve them. Then use those profits to fund the next, bigger project, and so on, until you reach your long term goal.
• Learn to cut costs. Entrepreneurs who bootstrap their businesses are the masters of cheap. They find cheaper ways to do anything, whether it’s taking the subway to a meeting, or hiring equipment rather than buying it. Bottom line? There’s a cheaper way to do anything. Find it.
• Get creative. Bootstrapping successfully requires you to find creative ways to make the money you need to start your business. Sell something; offer a separate service on the side to make extra money, freelance for a while in parallel to your business, or pawn something if you have to. When entrepreneurs bootstrap, anything goes!
• Understand that when it comes to bootstrapping, determination is everything. It’s not easy. Often it’s not fun. But if you keep at it, there’s no chance you won’t make something of it.

Famous Bootstrappers

Of course, you may be feeling a little down in the dumps about having to bootstrap. If other entrepreneurs can get funding, why can’t you? Don’t be. There have been plenty of people out there who have made their fortunes using just such a strategy.

One of those is the famous entrepreneur and author, Guy Kawasaki. Then there is Bill Gates, who started Microsoft with very little money, and of course, the boys at Google. In fact, some of the world’s best known brands, and most successful companies, were founded with little more than a good idea, and the will to succeed.

All the more proof that you don’t need lots of money to be an entrepreneur – you just have to be willing to take that first step into the unknown.

As a successful, under-30 serial entrepreneur, Gary Whitehill’s game-changing endeavors have been featured on television and in magazines and newspapers across the nation. Read more about Gary here.

It’s been amazing to watch the evolution of the Internet over the last couple of decades. What started out as a way to share information progressed to e-mail and games. Then came online shopping, which has grown into a multi-billion dollar business. It wasn’t long before more people saw the potential of Internet commerce, and began to get more creative with the online businesses they started. These are just a few young entrepreneurs who are using the Internet to build successful businesses.

Matthew Inman
The Oatmeal.com

At just 27, Matt Inman has proved that a successful online business doesn’t need to include a staff. He’s making a name for himself on his own, and doing quite well at it. In 2007, he designed an online dating site with no outside help, and he did it in 66.5 hours. The result was Mingle2. He promoted the site, and in just four months, it was the number one Google result for “online dating,” beating out dating sites that had been around longer, such as Match.com and eHarmony. In July of that year, Matt sold the site to a competing company, JustSayHi, which allowed Matt to move on to an endeavour he really enjoys—creating comics.

Matt is also known as The Oatmeal, and his eponymous website, launched in July 2009, receives millions of page views every month. He creates comics based on his own life experiences and observations, like “What It’s Like to Own an Apple Product,” and sometimes just from unconventional ideas he has, like “6 Reasons to Ride a Polar Bear to Work.” Matt has progressed from asking visitors to buy him a cup of coffee via a PayPal donation link, to turning his comics into posters, prints, and other merchandise, and selling them in a store on the site. Earlier this year, he was approached by Andrews McMeel, the same company that has published books of comics such as Calvin and Hobbes, Dilbert, and The Far Side. Matt is now working on his own book, due this fall.
[Photo credit: Randy Stewart]

Rob Kalin
Founder, Etsy.com

Five years ago, Rob Kalin was a 25-year-old high school dropout, trying to make a living from his small Brooklyn apartment by designing and selling furniture. He thought the best way to accomplish this would be online. But when hours of searching revealed there was no site geared toward his handcrafted creations, he decided to build one, and Etsy was born. In addition to allowing artisans a space to sell their handmade wares, Etsy provides a community where people can share their business and design challenges, and support each other’s work.

To get things going, Rob designed the site and wrote all the copy himself. He asked two people from New York University to set up the servers to support the site, and one of his furniture customers provided $50,000 in startup capital. The investment paid off many times over. Today, Etsy is used by a quarter of a million artisans and crafters, who sell millions of items to millions of registered members. Nearly 25,000 orders are processed on a daily basis by Etsy’s 65 employees, generating a 3.5 percent commission on each sale. In 2007, Etsy’s sales totalled $26 million. Last year, that number more than tripled to $87.5 million. In 2009, Rob stepped down as CEO, and hired Maria Thomas, a National Public Radio digital media executive to succeed him. He stays on as chairman and chief creative officer while he pursues his latest venture, Parachutes, Inc., a company dedicated to changing how people teach and learn.
[Photo credit: TCDisrupt]

Neil Patel
Founder, CrazyEgg.com and KISSMetrics.com

Neil has been an entrepreneur for about eleven years now, since his first year of high school when he began selling burned CDs, bootleg movies, and cable black boxes to his fellow students and their parents. After a short time, he realized there wasn’t much profit in being a pirate, and turned his attention to legitimate endeavours. He’s had some failures along the way, but has used those as learning experiences in his successful ventures. One of those lessons, after six month of pitching a company to uninterested venture capitalists, was that to make something profitable, he’d have to do the work himself.

That first profitable company was CrazyEgg, an Internet marketing data firm that helps web publishers learn what their visitors are interested in by displaying click patterns on maps which overlay the site’s pages. From this information, publishers can improve areas that don’t get much attention, and maintain the ones that do. Once CrazyEgg got off the ground, Neil went on to create KISSMetrics, which provides similar data, but through more interactive means, like popups that actually ask site visitors why they’re there, and whether they found what they were looking for. Neil also makes it his mission to share what he’s learned with other entrepreneurs via his straight-talking site, Quick Sprout, which proclaims Neil as “kind of a big deal.” It’s not immodesty when it’s true.
[Photo credit: Sean Dreilinger]

Shawn Hessinger is the blogger and lead moderator at BizSugar, a social networking site and community serving small businesses.

My software company, 37signals, is nearly 11 years old. But until now, it's never really had a place to call its own. For much of that time, we've been positively nomadic.

Our first headquarters was in the office of one of our original partners, a Chicago-based graphic designer named Carlos Segura. Carlos's office also housed his design firm, as well as the T26 Digital Type Foundry and Thickface Records. 37signals lived on a corner of a big desk in a room upstairs. It wasn't glamorous, but we didn't need much space. It kept our costs down, too.

After we had been there a year, Carlos left the company, so it was time for us to move on as well. By this time, 37signals was three people -- Ernest Kim, Matt Linderman, and me. We were making money and doing well and didn't require much in the way of an office. So when some friends/clients at a company called Data Harbor invited us to sublease some of their extra space, we said, "Sure."

A year after that, Data Harbor moved, and we took over the remainder of its lease for a few months. Then we decided to finally get a place of our own. We found it across the street (we could see it from the window of the space we were still occupying). It was too big -- 3,500 square feet for just three Chicago-based employees -- but the location was good, the rent was fair, and the landlord was a nice guy. Still, it never really felt like home. Rather than investing in the space, we just put some cheap tables together and got DSL. We worked that way for three years. During this time, we brought on a couple more people, but they were working remotely from other cities.

I suppose we were thinking about office space the way most businesses do -- as a cost center. After all, between rent, furniture, technology, and the like, it adds up fast, especially for a young company. We were doing fairly well, so $2,500 a month wasn't much of a burden. At the same time, it was $30,000 a year out the door when we could all have just worked from home, which might have explained our ambivalence.

But over the course of three years in that Spartan space, we learned an important lesson: An office could make you money, not just cost you money. We had a lot of empty space. Our three desks, conference room, and personal space took up only about 25 percent of the office. Perhaps we could turn that empty space into a revenue stream. Not by subleasing it but by using it to host our own workshops and conferences.

For a few years, we'd been sharing our ideas on software design, marketing, and business on our blog, Signal vs. Noise. We'd begun to build a loyal and passionate following. So why not take advantage of that and hold a workshop about the things we were writing about on the blog? We could host it in the spare space in our empty office. And charge for it.

We put together a one-day agenda, charged about $300 a person, and sold about 30 seats. Suddenly, we found ourselves with $9,000 in additional revenue. Our monthly rent at the time was $2,500. In one day, we just paid more than three months' rent. That was a light-bulb moment. An office can be free -- and even a profit center -- if you start thinking about your company's byproducts.

What do I mean by byproducts? Just like the lumber industry can sell its sawdust (a byproduct of milling trees), we discovered that we could sell our knowledge (a byproduct of running a business). And we could sell it in our spare space. Eventually, we packaged this knowledge in book form. All told, the combination of the book and the workshops has brought in revenue of more than $1 million.

But back to our real estate saga. When our lease was up, we decided not to renew. But instead of getting another space of our own, we hooked up with another friendly company we knew: Coudal Partners. I knew Jim Coudal, owner of the advertising and design firm, through a mutual friend. Jim had some extra space, I mentioned that we were looking, and he offered it at a fair price. This was in 2003. For the past seven years, we've been working out of that office.

It's been a wonderful experience. The folks at Coudal Partners are wildly creative. We've hired them to shoot and produce some video for us, and we even started a side company together called The Deck, a targeted ad network that helps companies reach graphic designers, Web designers, and other creative professionals.

However, since we're sharing the space, it's not ours to do whatever we want with. Holding workshops there has been a logistical challenge, because those events mean that the people at Coudal Partners can't work at their own office for a day. That doesn't scale well. We'd like to be able to do a workshop every six weeks. Or maybe host a spontaneous gathering of all our nearby customers. We needed more flexibility.

What's more, since we've expanded from just a few people to 20 (nine of whom are in Chicago), we've outgrown the six desks we had been renting. Privacy is another thing you don't have much of when you share an office with another company. It wasn't an issue early on, but it is now. Our friends at Coudal Partners have been fair and accommodating, but we decided it was time to move on.

So last year, we began looking for a place of our own. From the outset, we decided to recall what we had learned years before: We weren't just going to spend money on the space; we were actually going to make money on it. That requirement became the driving force for finding the right space.

We looked at a bunch of places -- houses, lofts, offices that already had been built out, raw traditional office spaces. We almost had a lease done on a large factory that had been turned into a six-bedroom residence (we'd use the bedrooms for private offices). But the deal fell through because of zoning and parking issues.

Eventually, we found a beautiful raw space just six blocks from our current office. It's a corner space with two enormous walls of windows. Natural light pours in. We hired architects to review the space and draw up plans. We negotiated the lease, paid the lawyers, paid the lawyers some more, and signed the papers.

The design process took a few months, and the build-out took about four months. We finally moved in July. True to our vision, about a third of the 10,000 square feet is dedicated to teaching. We built a theater-style classroom, with 37 seats, in which we can give presentations, hold workshops, and offer training and support classes for our customers. We plan on holding the first of many regular workshops this fall.

For the past few years, we've rented out different venues for our workshops. It cost us a few grand for the space, another few grand for the overpriced catering (we had to use each facility's sanctioned caterer), and another few grand for audio-visual requirements and other logistical considerations. Though we were able to charge about $750 per seat for a one-day event and sell about 50 seats per workshop, renting still took a good chunk of profit out of the equation.

With our own space, we'll not only save money on the costs side; we can make more money on the profit side. We also believe we'll be able to charge closer to $1,000 a seat. At 37 seats, that's $37,000 in revenue. All we'll have to pay for is catering. All the AV requirements and Internet connectivity are built into the space. And it's much more attractive than the venues we were renting out before. Just a few of these workshops will cover our rent for the year.

The lesson here is less about real estate than it is about business itself. Whenever you make something, you make something else. Your byproducts may not be as obvious as sawdust, but they're there. Maybe it's the knowledge you've acquired by running a business. Maybe it's a piece of software you wound up making when you made another piece of software. It's there; you just have to look for it. You may even find a business you never knew you had.

Jason Fried is co-founder of 37signals, a Chicago-based software firm, and co-author of the book Rework.

Dear Norm,
In October, I parted ways with my former employer. I have decided to start my own business creating mobile websites and apps for businesses. The trouble is, I have no idea how to set pricing. My overhead is $7,044 a month, and it takes me about two weeks to develop each website or app. I have one client, a friend of the family, whom I charged $500 for a huge website, which I know was too little, but I'm worried about losing customers by setting my rates too high. Then again, I need to eat! What do you advise?

Kate McGinley, founder, McGinley Media
Pittsburgh

Everything has a price, as the saying goes, but a lot of people struggle with figuring out what the right price is. I get more inquiries about pricing than about any other subject. The classic mistake is the one Kate was about to make: setting a price based on what she feels she needs to earn rather than on how the market values her service. Competition generally determines the price you can charge. So the first step should always be to find out what competitors are charging. There are many ways to do that. You can call up other providers and -- posing as a customer -- get estimates. Local, state, or national trade associations may also provide the information you're looking for. If all else fails, you can follow my father's advice, which he gave me in the form of a humorous story:

A brand-new optician opens up a store and isn't sure what to charge. On the first day, he gets his first customer, who looks at some glasses and asks how much they cost. "Uh, $20," the optician says. "$20?" the customer responds. "That's all?" "Well, that's just the frames," the optician says. "The lenses are extra." "How much?" the customer asks. "Uh, $15," the optician says. "Only $15?" says the customer. "Per lens," says the optician. "Oh," says the customer. "So that's $50 altogether." "Well, the case is $5 extra," says the optician. "Hmm, $55," says the customer. "That's a little high, but I'll take it."

I've used this method, and it works. But whatever approach you take, the rule is the same: You don't set the price; the market does. Your job is to determine what the market will pay. Then you can decide whether it's enough to cover your costs and fund your lifestyle. If you do it the other way -- starting with your own financial needs -- you're likely to wind up charging too much or too little. And charging too little is even more dangerous than charging too much. If you set your prices too high, you can always just reduce them. But if you undercharge, you develop the wrong kind of reputation. I told Kate, "You don't want people saying, 'Let's use Kate McGinley. She's cheap.' It's a lot better if they say, 'Yes, she's a little expensive, but her quality is worth paying for.' "

Please send all questions to AskNorm@inc.com. Norm Brodsky is a veteran entrepreneur. His co-author is editor-at-large Bo Burlingham. Their book, The Knack, is now available in paperback under the title Street Smarts: An All-Purpose Tool Kit for Entrepreneurs.

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