123 Reg, LCN and Fasthosts are all good businesses to use for this reason.

If you buy the domain name yourself, resist the urge to buy web hosting or email services at the same time, even if the deal on offer looks like a steal. Instead let this be something your web developer takes care of for you. They will be in a better position to work out what you need and then they can edit the DNS of your domain to point to the services they provide.

Your web developer may offer to buy or register your chosen domain name on your behalf. If they do make sure to ask them that they add you or your company as the registrant. This is something they can do without it affecting their ability to manage your domain. So don’t let them tell you otherwise!

If someone has brought a domain name on your behalf you should check that you or your company are named as the registrant. You can find this out by going to a site like www.who.is and seeing if you are listed by typing in your domain name. It doesn’t matter so much if you don’t manage the administration of your domain, but if you’re not listed as the registrant, then should you ever want to try and move management of that domain elsewhere you’re starting at a disadvantage.

Finally, if your web developer suggests you use their own hosting or recommends a hosting package, don’t equate this to a financial advisor trying to sell you the products they recommend just to get their hands on the commission. Most web developers make next to nothing on hosting, even if th ey seem pricier. It’s largely impossible for your developer to compete with the volume sellers and hosting won’t be their core business. It’s more likely that, if they recommend a host, it’s because they are comfortable with and have evaluated their services and they know that to deploy your website on the host once it is built will save them time. Which should save you money.

By Internet Consultant Alick Mighall

Image by jef safi ~ cc

If your website IS your business and it’s offering products, services or information then it might be something that you might seriously consider. However, if your business website is just ABOUT your company then it’s probably not such a good idea. There is of course a thin line between the two, so another way of judging whether you should take advertising is by looking at some of your competitors and seeing what they do.

Before you decide though, you need to consider these factors as well:

1. How much money do you think you can make, or do you want to make, from selling your advertising?
2. Who is going to sell the advertising for you?
3. Once you’ve sold it, how will you get in onto your site?

Remember, points two and three constitute costs which you’ll need to subtract from the money you make from point one.

You’ll also want to think about what sort of advertising you want to take on your site:

• Are certain brands or services a no-no?
• Do you want total control over every advert that appears on your site?
• Are the certain formats you will and won’t take?

How much money can I make?

For the purposes of this exercise I’m just going to assume you only want to make £100 from selling advertising a month – and assume that your costs in doing so are zero.

Advertisers are most likely to buy your audience in three ways:

1. Page Impressions, which are traditionally sold on a cost per thousand impressions basis (referred to, confusingly, as CPM)
2. Clicks (and let’s assume that the click through rate is 2% – which means for every 100 times the ad appears, it’ll get clicked on twice)
3. Tenancy/Sponsorship – on which you’d get a presence for a fixed length of time for a fixed cost

If you could charge £5 CPM and sell on a page impression basis you would need 20k page views to make £100 – assuming that you can sell every page view

If you could sell each click for £0.25, you would need 20k page views also

If you had 20k pageviews, do you think, if you sold a business a month’s tenancy on your site that they would make that money back? After all, on whatever basis advertisers buy from you, they will expect to get more than that value back in return.

What are the challenges?

The biggest challenge I think is in selling the space. You can look to sell your ad space via an ad marketplace (such that is offered through products like Google Adsense, Doubleclick and OpenX Marketplace – businesses which pool many sites inventory and then make it available to advertisers) but the trade off is that it’ll cost you in commissions and you’ll be a step removed from the advertiser – which makes both controlling the quality of creative and building a case stuffy around the value of your audience more difficult to do.

You can bypass these problems by selling directly. This is a worthwhile strategy considering, as at the end of the day you’ll know your audience best. But is selling that media space really core business for you?

By comparison, the challenge of actually getting ads to appear on your site is much more straightforward. Once you’ve decided where to place the advertising, it’s simply a case of inserting the code that will host the advertising into your website. That code depends on what solution you end up choosing. More on that next.

What options do I have?

On the miggle website I write extensively about what considerations you should give and processes you should work through to determine if and how you sell advertising on your site.

In summary though, I’d suggest looking at the following:-

If you want to sell directly, mainly on tenancy and retain full control of the ads that appear – especially to a local market, take a look at addiply.com

If you want to let someone else take care of the sales for you – and are less concerned about having absolute control over the advertising that appears then take a look at Adsense or Doublelclick

If you want to both sell directly, as well as make use of ad marketplaces, explore CPM, Click through and Tenancy models, as well as have total control over what type of ad formats you want to run, take a look at running the OpenX adserver.

Should I buy advertising on other websites?

If you can identify a site which has an audience you are trying to win custom from and they have an advertiser sales programme, then yes, give it a go!

Conclusion and Key recommendation

Unless you have specifically designed your website to make money from advertising in the first place it’s unlikely that selling space on your website will make you any significant revenues. However, taking advertising could offer additional value to your users, and the brand association you might get by having relevant brands advertising on your site could help strengthen the perception of your business.

As you’ll see from the calculations I made earlier, you need a lot of page views and users to make money from selling advertising – which, the chances are, if your website’s core function is to support your business you won’t have.

So, I think, the best recommendation is to look at the tenancy model and to focus your efforts on selling the space directly to other businesses you know who might derive value from your users.

For example, if you run a building supplies business maybe your advertisers are the local carpenters, plumbers and electricians etc that buy from you. If they buy tenancy from you at a nominal fee each month, then they only really need to see perhaps one customer back from this to make it worth their while. The money you make from it may not buy you your next car – but it could help pay for your web hosting fees, or help keep your site maintained. Finally, it might encourage other sites you might benefit to buy advertising from to do the same thing – and thus find you new customers too.

By Alick Mighall

Image by Pascale PirateChickan ~ cc

So what advice can you act on?  I always think the best advice has got to resonate personally  – it’s got to make you think – ‘Yes, that makes sense!’  If it doesn’t, to try and follow it may be counter-productive.  So, if I were giving advice to myself, I think I’d be listening to the following five things – each of which have been key to the two periods in my life where I’ve worked freelance or ran a small business.

1. Decide what your ‘get out’ point is.

You will undoubtedly be taking a risk when you start up on your own.  I think it’s worth you thinking about what the limits of that risk are before you take the plunge, because once you have, it’s very easy to get caught up in the momentum of your new work life.  Stuck between the headlights, and unable to see the wood for the trees, it’s easy to ramp up the risk way beyond the thresholds you first set once you get going.

As for setting that ‘get out’ point, your own circumstances and attitude to risk are the two things that will help you set this.  For one person it might be, ‘I’ll risk my savings, but that’s it’, for another, ‘I will never let my overdraft/business loan exceed £5k’ – or it could be something lifestyle based, like ‘I will not let my new freelance life impact on the time I spend with my boyfriend/wife/kids/family etc’.  Whatever it is, set it, and give it careful consideration if it’s ever breached.

2. Be proud of your price and your terms of service and stick to your guns – be consistent

You will have set yourself up in business because of your belief that you can offer a product or service in a way, and for a price, that offers customers benefits they will not easily get elsewhere.  These are enshrined in your price, your terms of business and your service/product offering.  You need to know these three things inside out, have confidence in them and be proud of them.  They are the fundamentals of what your business or service is about, which, along with the quality of your work, you will build your reputation on.  In all matters aim to apply these as consistently as you can across the board.

3. Managing that big client

The perceived wisdom is to never let one client amount for more than 60% of your turnover.  There are good reasons for this, the main one being, concerns of HMRC aside, that if you lose that client you’ll lose most of your turnover.

However, it’s often very hard when you first set up to avoid a situation where one client doesn’t make up the lion’s share of your sales.  So, until you can diversify and bring in new customers, you need a strategy to deal with your big fish.  Try not to let them run up too much credit with you, be firm on how much of your time you can devote to their projects and don’t take on too much of a cost base on their behalf.   If you can focus on these three areas then, should you find yourself without their income, you’ll hopefully not be so exposed that it means the instant end of your business.

Often, your biggest client will be an ex-employer – so you’ll know each other well.  Try though not to let this mean that you treat them, or let them treat you, any different from how you would a new client that you don’t know from Adam.  If they truly value what you do, they will be prepared to engage with you under the basis on which you have set yourself up.

4. Have a plan, define some goals and try and stick to these

You will be working freelance or managing your own business for a reason.  Whatever that is, it’s an end point, the progression towards which needs a plan you can measure progress against.

These goals won’t always be financial.  It could be that you’re working freelance to gain new skills, or to build up your CV, or to be able to spend time on other projects.  Always be clear on why it is you are doing what you are doing.  If your goals and aspiration can be broken down in to smaller steps, write down what these are.  That will help you track progress.

Many freelancers and small businesses will tell you how much they hate doing the books – but keeping on top of your accounts, and comparing your monthly figures against a rolling monthly or quarterly cashflow forecast (contact me for a template) will help you in seeing where your business is against both your financial goals and at worst, your ‘get out’ point.  Finally, if you only do your books once, at the end of the year, you will end up with some nasty shocks, because no matter how small your tax bill is, it’ll be a bill you hadn’t planned for.  So do them monthly.

5. Employing staff and/or teaming up with mates

The chances are, if you make the move to running a small business, or if you need help from other people, you’ll start off with looking at those you know, who will be either family or friends.  This is great, as you can probably count on the best support from the people you are closet to.

However, there is though a lot of mileage in the old adage of not mixing business with pleasure.  From time to time, work you do with family and friends won’t pan out.  In this situation, what you don’t want is close, long term relationships damaged or compromised by your work.  So, the rule should be that you only work with people, or employ people, who you can look in the eye when you no longer need them (or can sustain using them) professionally and tell them so.  In short, don’t hire someone you can’t fire!

And finally

In 1995, I first went freelance, and within a year or so had hired two full time staff, as well as regularly used a number of contractors.  I let my biggest client build up too much credit with me (see point 3), so when they went bust, I had to let my full timers go (see point 5).  At that stage, at 27, I decided that I was too young to take those steps backwards within my own business.  I’d breached my ‘get out’ threshold (see point 1 – my overdraft was thousands) but I had done enough to meet one of my goals, which was put a deposit on a flat and, over the time, make myself a lot more attractive to other businesses/employers (see point 4) – which was great – as when I’d gone freelance, it really was through having few other choices.

Ten years on, my ‘get out’ points are more lifestyle based and I’m better equipped to deal with the other four areas,  but they still remain an effective yardstick to measure myself against.

By Alick Mighall, Internet Consultant and Developer

Image by tjtrewin | cc