Small Businesses: Web and Domains Part I

November 11, 2009

PART I:  Information

As we prepare to move out of the ‘00’s or the Naughts, the internet has cemented itself in our daily personal and business lives.  Rare is the person who does not use the internet or email on a regular basis to do everything from socialize to find a plumber for a broken pipe.  Surprisingly, however, not all businesses have adapted and small businesses in particular are at risk of losing clients by not keeping up with the culture of technology.

Small business decision makers tend to be heavily involved in actually running the day to day operations of the business and therefore may find it difficult to explore the marketing opportunities of the internet, which progress rapidly.  Needless to say though, if your small business does not have a web presence it is absolutely necessary to acquire one.  The main reasons for developing a website for a small business are: Information, Advertising and Authority.  Crucial to achieving those goals and a strong website is a quality domain name.  Let’s expand on how Information, Advertising and Authority are achieved through a website and how the domain name contributes to this.  Today we will deal with the objective of Information.

Information:  Providing information about your business should be the primary goal of any small business website.  A website gives potential customers all relevant information about a company, from the type of business to the phone number and address.  Information at the tip of a finger is what defines the internet and a business needs to use the opportunity to make as much information possible to a discerning potential customer or a returning customer.  The domain name can be a customer’s first experience with your business whether through typing it in a browser or by seeing it on Google.  Don’t let the first opportunity to inform the customer fail. A proper domain name can say quite a bit about the business quickly.  For example, which domain name conveys more info about the business, chicagogutters.com or mcfeeleybrotherscontracting.com? (This is a made up example)  Obviously by one quick glance a person can infer that ChicagoGutters.com presumably is a Chicago area gutter company, whereas, the other domain is vague and unspecific.  When there are thousands of listings most potential customers will not waste time exploring vague sites.

Providing potential customers with Information about their business is the most cited reason by small businesses when creating a website and justifiably so.  However, businesses must not ignore the Advertising opportunities and the Authority that a solid website and domain provide.  Look for Part 2 where we will discuss Advertising.

Review: Valuate.com and the Domain Industry

November 4, 2009

Recently a new tool was made available to buyers and sellers of domains, Valuate.com.  Valuate.com is trying to accomplish where many have failed by creating an automated domain valuation algorithm to produce a quality estimate of a domain’s worth.  Before we take a look at Valuate.com and it whether it succeeds or fails, lets discuss valuation in general.

Determining value usually refers to discovering a correct price in a market.  Some will debate that whatever price an item is sold for reflects its value at least at that moment.  Others will argue that there are inefficiencies in markets and price doesn’t reflect value.  In the domaining world we see this often with some camps saying that a domain is only worth what one will pay for and others clinging on to domains or asking exorbitant prices based on potential.  Stepping out of the theoretical and into the practical world, both sides have some merit and that is why valuing domains become so difficult.

Domaining is such a new industry that a base set of criteria has yet to be set for valuing domains.  Sure, everyone has their own methods and ideologies but a real consensus has yet to be established as it has in more mature markets like the real estate market.  What’s holding the young domain market back from finding better valuations is a lack of a significant number of  comps and relatively few examples of the fulfillment of domain potential, eg Bobbleheads.com or PalmSprings.com, etc.  Up to now, type in traffic has dictated much of the pricing model, but that is now changing and the move to development reflects this.

Although we are not privy to Valuate.com methodology, it’s apparent they’re using criterion such as Search Vol, CPC, Advertising competition, etc.  The proper domain has an advantage in gaining the traffic.  They are measuring how much and how valuable the traffic that the domain may be able to corral is worth.  That is the future of the domaining industry, capitalizing off of search traffic through the use of powerful domains.  Whether a domainer wants to capitalize off the traffic himself or sell the domain to a business owner who sees that traffic as a boon to their business, Valuate.com provides a tool that reflects the potential of a domain.

However, Valuate.com will only succeed if it is accepted by the people who deal in the domain market, domainers and end users alike.  I will say that we approached Valuate.com with a healthy skepticism, yet were surprised when test after test the Valuate price matched an intuitive price we had set in our minds.  Wise Owl Consulting will wholeheartedly endorse Valuate for what it is, an estimate based on the quality and quantity of traffic that the domain can capitalize off.  That being said, we see Valuate’s number as a launching point for negotiations, not a concrete set price. 

Niche Businesses and Niche Domains

November 2, 2009

This Washington Post article has a great story about a true online entrepreneur.  It also exemplifies the power of finding a niche business and growing it.  The amazing feat of the internet is that it allowed information and commercial enterprises to spread to those who never would have had exposure.  At one point in time this gentleman’s $5 million dollar business would have been an $xx,xxx mail order business with high print advertising costs.

With the right idea and some gumption most people can make a run at monetizing the internet.  Niche businesses have already exploded, even competing with the big boys in their chosen niche or creating a whole new marketplace.  The role of the domain cannot be discounted and will often times be deciding force in the success or failure of a niche business.

Highly targeted and accurate domains will decrease advertising costs by increasing SEO results.  Niche domains will add a legitimacy and authority to the business.  Which business do you trust to sell you a new gold faucet?  GoldFaucets.com or A1BestFaucetsPlumbers.com?  That example is perhaps extreme but GoldFaucets.com is still better than PlumbingParts.com, if you are specifically looking for a gold faucet.

The success of a niche business is making sure the potential customers looking for that niche product can find you.  The first step and most important step is finding the right domain, regardless of your business or service.