How to Run Your Domain Investing Like a Business

[Arpit131]

Investing in domains can be both financially rewarding and fun. But if you don't take your investment strategies seriously, then you could easily run into trouble.

To take your domaining beyond just a hobby, you need to run it more like a business.

If you're new to investing in domains, or can't seem to make your portfolio profitable, here are 10 questions to ask yourself immediately:

• 1) Do you have cashflow?
• 2) When was the last time you looked at your balance sheet and profit and loss statements?
• 3) Do you have a clearly defined business model for each of your domains?
• 4) When was the last time you cleared out non-performing assets?
• 5) Does your accountant know how to treat domain names?
• 6) Why is tracking both the purchase and the sales price so important for your business?
• 7) What is the return on your investment and could you gain a better return elsewhere?
• 8) How much do you value your time in your business plan?
• 9) When was the last time you seriously considered outsourcing to free up your time?
• 10) Do you understand the difference between cash and profit?

Source

Evaluate your business model against these 10 questions and design out a strategy.
Because your time is valuable. Stop treating it as a hobby and start treating it like a business, if you want to make it big in this industry.


One of the significant points is the time that you invest in running the business against your targets and rewards!
Your views??

 

[Willox Perez]

Extremely powerful questions to test whether you are treating domaining like a business or a hobby. They also serve as a great guideline to always keep focus on treating it like a business. I am definitely saving these questions and will implement to what I was already doing.

Very true I agree you must calculate the amount of time you put into it. A lot of time goes into this business which is why you must focus on getting quality domains so you can make great returns. You have to take into consideration your time as well as the investment of money to get the domain. This is an extremely useful thread and a must read for anyone in this business. Thanks again for sharing.

- Will

 

[Name Trader]

I agree with Will about the powerful questions. But there was very little follow up with the correct answers, and if your answers weren't correct, what to do about it. But that's maybe a book. Not just an article.

 

[garptrader]

Medium and large businesses will regularly review financial results. Underperforming product lines or divisions will get close scrutiny. What changes need to be made to generate satisfactory results - cut unnecessary costs, adjust pricing, change marketing efforts, etc. So domain investors need to continually evaluate their portfolio and not auto-renew every domain. This last year I dropped a considerable portion of my portfolio and will still do some paring the next few months. Anything other than .COM needs to be a really good keyword to stay on the team and even long .COMs will be candidates for getting booted. I am staying away from new TLDs as I still view them as a waste of money. Lastly, one's time cannot be treated as free - outbound marketing is time-consuming and from my experience not very productive (I make $XX/hour in my job so why should I accept working for third-world wages in domaining?). Most end users just don't care about domain names and are not interested in spending serious money on one.

 

[Arpit131]

Most end users just don't care about domain names and are not interested in spending serious money on one.

While I agree to most of what you said, I differ in opinion over this one!
They do care about their domain names once the business grows to a certain level.
It also depends on the way you pitch the domains to end user. Sometimes, they know the importance of domain name in an online business and many a times they don't.
What I prefer to do is research on my leads and pitch them accordingly(as to how my domain name would help their business grow or benefit their business).
Of course it takes time!
But then, domaining requires a lot of patience at times