Online Business: Do's and Don'ts of Securing a Domain Name

Zachary Rose, founder of Green Education Services

Photo courtesy of the company

Consider these six tips from small-business owners and experts before deciding on a website name.

Navigating the world of domain names can be a daunting task if you're not up to speed on how to get one. With countless caveats and hosting companies out there, it's easy to be overwhelmed or worse, make a mistake that could ultimately cripple your business.
Consider these do's and don'ts from small-business owners and experts to help secure your company's domain name.

Do: Include a location or keywords in your domain name, if you can.
If your business focuses on a geographic region, try to put the location into the name of your domain, says Jean Bedord, a Silicon Valley-based search consultant and author of the book I've Got a Domain Name--Now What??? When Mikalai Krivenko needed a domain for his painting business in Hoboken, N.J., in 2009, his son Yuriy, a Jersey City, N.J.-based search-optimization specialist, suggested he put "Hoboken" in the name. For $11, Krivenko bought hobokenpainter.com, which shows up at the top of keyword searches that include "Hoboken" and "painter." Whether it's location, or what your company does, Krivenko advises: "Put the most important keyword for your industry in the domain name."
Do: Register yourself as the owner of the domain name.
Some business owners make the mistake of not checking to ensure whoever registers their domain name does so under the business owner's name. It's very important to be sure you are the domain owner and administrative contact, says Bedord. "It's just like a piece of property. If you don't own the property, you can't sell an existing business," she says.
It's an obvious, yet common, mistake made by business owners. Three years after Graham Hunt, 44, started his real estate firm Valencia Property in Spain in 2000, the two-person web design team he hired to build his site split and he had to choose between them. Hunt soon discovered the partner he didn't choose had registered himself as the owner and administrative contact for the domain name, so Hunt didn't own his own website. It took three years and he ended up paying the disgruntled partner nearly $6,000 in sales commission fees to get back ownership of the domain, which originally cost just $15.
Do: Remember to renew your domain name registration.
When Nick Hoffmann, 32, missed the renewal of his networking company's domain name inetguru.com in 2000, it was a crippling business blow. The name got bought by someone else and without email access through the site, Hoffmann lost contact with clients. Eventually, he folded the company. Now working as chief operating officer for an aftermarket marketplace for domains, Hoffmann suggests buying a registration for five or 10 years upfront, or setting up an annual auto-renew payment. Just make sure the credit card on file doesn't expire, another common mistake that might lead to losing a domain name. "The whole aftermarket industry is based on names that drop off," he says. "It happens every day."
Don't: Use dashes, abbreviations or numbers in your domain name.
Instead, come up with a catchy name that's easy to remember and captures your business. Fan Bi, co-founder of Blank Label, a Boston-based online custom dress shirt company learned that lesson when settling on a domain in 2008. At the time, blanklabel.com was out of his price range at $15,000. Bi chose blank-label.com for a much cheaper $250. But as the business grew, he realized the hyphenated name was far from the best choice. "You get much more word-of-mouth if it's a name you can easily say without having to spell out," Bi says. Last year, after months of negotiation with the domain owner, he was able to purchase blanklabel.com for $6,000. Just three months after the change, website traffic shot up 25%.

Don't: Waste money on extensions other than .com.
When you register your domain name, you'll be bombarded with offers to purchase other versions like .net and .co. For most small businesses, that's not needed. Investing in other extensions becomes important when patenting something or protecting a trademark, says Bedord. If you think a competitor might want the .net version of your domain name, for example, consider taking it first. "The reality is you have to pay for every one of those," Bedord says. "The value is really in the .com."
Don't: Buy a domain without checking into its past.
Even available domains can be exposed to legal trouble if the name is too similar to another company's trademark. Nearly a year after launching New York-based LEEDTeacher in 2009, Zachary Rose learned the domain LEEDTeacher.com infringed on the registered trademark of a massive nonprofit. Rose, now 29, received a cease-and-desist letter demanding he change the name of his green jobs training firm, and shut down the website. He ultimately paid $2,000 in lawyer fees, renamed the company Green Education Services and switched the domain to GreenEDU.com.

Ready, Set, Launch

Five steps for getting your business up and running successfully.

If you're reading this, it means you're interested about starting a business. Now it's time to focus your entrepreneurial spirit using the following five steps.
1. Look for that "aha" moment
Sometimes the inspiration for business ventures comes from what's around you--or from what isn't. Take Entrepreneur magazine's home base of Irvine, Calif. The lack of fast-food restaurants in the business area meant treks across town for lunch, prompting two young men to ponder, "Wouldn't it be great if we could get some good food delivered?"
Rather than waiting for someone else to capitalize on the idea, they purchased one of Entrepreneur's business startup guides and launched a restaurant delivery business. So far, it's served more than 15 million people.

Netflix provides a similar example. After founder and CEO Reed Hastings got charged $40 for returning a rental movie late, he didn't get mad; he got inspired. That $40 led to a billion-dollar online DVD rental business.
The lesson? Everybody kvetches about what's missing in their corner of the world, but only a select few--the entrepreneurs--do something about it. It may be cliché, but it's true: Where there are problems, there are opportunities.
2. Plan ahead
You've got the inspiration. Do you really need a business plan?
Plenty of people argue yes. One is Sean Hackney, who co-founded Roaring Lion Energy Drink in Sun Valley, Calif., and grew it from a $62,000 investment to the No. 2 energy drink in bars and nightclubs. Hackney says writing a business plan was "absolutely" worthwhile: "I had a lot of stuff in my head that needed [to be] put on paper."
Entrepreneurship professor William B. Gartner of Clemson University in South Carolina analyzed data from the Panel Study of Entrepreneurial Dynamics, a national survey of more than 800 people in the process of starting businesses. He found that writing a plan greatly increased the chances a person would actually go into business.
"You're two and a half times more likely to get into business," Gartner says. "People who write business plans also do more stuff."
That stuff includes researching markets and preparing projections, which is valuable in itself, and also increases the chances that an entrepreneur will follow through. And if you want to get funding from banks, VCs or government agencies, a business plan often is required.
But more isn't always better. Aim for 20 to 40 pages.
"The shorter, the better," says William Bygrave, a professor emeritus at Babson College in Babson Park, Mass., and longtime entrepreneurship researcher. "And don't have any numbers you can't explain instantaneously."
3. Value your business
Unless your startup funds are coming out of your own pocket, someone will have to value your business. Be prepared for a reality check: If investors say your startup is worth $1 million, then that's what it's worth. You might think it's worth more and be able to back that up by pointing to, say, $2 million in liquid assets. But unless investors agree, you'll have to live with their valuation.
That's one example of how sometimes valuing a business is like pricing a home. Here's another: comps. Use sites such as BizBuySell and BizQuest to determine what similar companies in your industry and geography are worth. Other potential sources are accountants and lawyers who specialize in your industry and geography.
4. Find the right location
Here's another similarity with real estate: Location equals money. "In the brick-and-mortar retail world, it's said that the three most important decisions [you'll make] are location, location and location," says Irene Dickey, a lecturer in management and marketing at the University of Dayton's School of Business Administration in Dayton, Ohio. "Careful determination of new sites is critical for most retail and consumer service businesses."
For example, look at neighborhood traffic generators, such as other retailers that draw people to the area, industrial or office parks, schools, colleges and hospital complexes. (Or lack thereof, as in the case of the Irvine restaurant delivery business.) Consider both highway and foot traffic if most of your customers will be coming in that way as opposed to, say, the Internet.
While you're at it, look for competitors. "Quite simply, the best place to be is as close to your biggest competitor as you can be," says Greg Kahn, founder and CEO of Kahn Research Group in Huntersville, N.C., and a behavioral research veteran who's done location research for Arby's, Buffets Inc., Home Depot, Subway and other major and minor players. "By being in close proximity to your competitors, you can benefit from their marketing efforts."
5. Find your first customers
Your first customers are key--and not just because they're turning on the revenue spigot. They also legitimize your idea, demonstrating that there actually is a market for your products and services.
They're also a source of valuable feedback that will help improve your business so more customers keep coming in. Don't overlook the opportunity to ask if you can turn some of the positive feedback into testimonials.
Where do you find your first customers? The answer varies somewhat based on your industry, but one common strategy is to leverage your personal and professional contacts--and their contacts. Those could include former employers, employees and customers, contacts within your civic activities, such as Rotary or Kiwanis, and tradespeople and professionals, anyone from your dentist to your plumber.
Consider sending each one a personal letter, then follow up with a phone call a week to 10 days later. In this letter, announce your new business and offer something, such as a free consultation or a special discount, or even a finder's fee for any referrals they send your way.

How to Start Your Own Business

Running your own business is a rewarding but engaging career and life choice. It demands your time and focus. Start by expecting to live your work until it is established so it can get off the ground. There are many different opinions about how to start a business from researching and writing a detailed business plan -- to organize it all -- to just jumping into a passion and trying to make money out of it.

Steps

1. 1
   Start with your idea. This probably isn't a brand new invention or product. In fact, many successful small businesses have found a way to deliver an existing service or product more efficiently and economically or have customized an existing product or service to fit an opportunity.
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2. 2
   Put together a business plan. This doesn't require hundreds of pages with thousands of charts. Include research into things like how much you can charge for your product/service, how much it will cost to produce or deliver (include variable & fixed costs), and the size of your potential market (i.e. number of customers). The plan should evaluate your competitors - how many competitors, how strong are they, where are they, how will you compete. The plan should state what is required to enter this market, barriers to entry such as high fixed costs (factories, restaurants) and government regulations that must be met.
3. 3
   Determine if you need financing. Your business plan will include a section on financing. How will you pay the costs to start and run your business? Do you need a bank loan? Use credit cards? Self finance? Also, you'll need to consider how much salary you need to support yourself while starting your business.
4. 4
   Put together your initial marketing plan. Marketing need not cost a fortune. Some businesses require very little. For example, many service businesses such as accounting firms build their practices through word-of-mouth referrals. You can also join free or low-cost associations to build awareness of your small business. Again, your business plan (product, customer, competitor) will help you determine the marketing efforts you need to undertake.
5. 5
   Build your infrastructure early. This doesn't mean build a big factory or a fancy office. It simply means keep accurate customer records, a clean set of updated books and a technology foundation, if necessary. One of the downfalls of many small businesses is that they don't know if they're making or losing money (i.e. the need for a clean set of books). Another downfall is when small business owners try to sell their company years later but lack accurate customer history and customer information. Many times, the customers of a small business are its best asset, and, without the records, the small business can be sold only for salvage.
6. 6
   Move forward and get started. Once you know you can be profitable take the leap and get started. Besides getting business supplies or advertising, plan ahead by establishing some new business clients ahead of time. If you're business is unlike a restaurant, that physically needs to wait for customers to walk into it's doors, establish accounts ahead of time. In this way, you will have pre-planned future receivables to look forward to. Think about and focus on making money first, where ever possible, instead of spending money. The more money you can bring in, without spending money, the more profitable you are going to be.
7. 7
   Use the web. Use every technology available that will give your business a competitive advantage. The internet is a customers research tool. Help future customers learn more about you and the details about what you sell and why your products or services are different and better for them than other competitors.
8. 8
   Make paying for your items or service convenient. In today's world, understand how people pay. Carrying cash can be risky. Therefore, most people choose to carry Visa, Mastercard, American Express and Discover. All these credit cards are part of our societies everyday life for making purchases. Debit cards are becoming especially popular. So, along with having a sales counter cash register, get set up to accept credit cards for your business. If you have your website set up, you should also make paypal payments available because most consumers feel that this is more secure, and many will use paypal.
9. 9
   Purchase a new electronic credit card machine. These are now very affordable and available at wholesale prices for about $147. Be sure to look for a wholesale supplier, not a retail seller such as a bank. Banks usually charge higher prices or rent it to you, and you may pay for it many times over. The same credit machine supplier will more than likely be able to offer you credit machine service too. This monthly cost is about $10. By doing this you'll be able to get equipment for less then the price of most cell phones. More importantly, you can offer your customers an easy way to accept credit cards. The goal is to help customers self-finance their purchases when they don't or can't use cash

Tips

• Use free resources. Your local library contains numerous useful references regarding incorporation, writing business plans, marketing, as well as information specific to your industry. The Small Business Association, Chambers of Commerce, AMEX Small Business website, associations for your industry, associations by ethnicity...all of these offer training, materials, networking and sometimes financing. Another good option is SCORE, a group of retired executives who provide business start-up advice.
• Recognize that getting your business off the ground will take time. Most businesses don't become profitable right away, so plan for that in your personal life too. You will be making sacrifices to be your own boss.
• Make paying convenient and affordable. Offer credit machine service, monthly payment plans, buy one get one offers and offer sale prices.

Warnings

• Running your own business is very time-consuming. You can rarely leave work "at work" because you're the boss now.
• Be sure to carve out time for yourself. Make sure you stick with an exercise program or build in time to see your family. As mentioned in Warning #1 above, running your own business can consume you if you let it.