Posted in Small Biz Abroad

My Top 20 Overseas Small Business Mistakes

My “first dollar in business”. An affiliate check from Amazon for Overseas Digest.

If you plan on owning your own small business overseas, no matter what size or type, you’re going to make mistakes. Don’t worry about it. Screwing things up will help you and it’s part of the game.

But you can minimize them by learning from others, starting with my top 20 greatest hits (or misses), one for every year I’ve been in business (in no particular order).

 

  1. Starting Without A Plan

In 1996, my friend showed me this new thing called the internet. I didn’t know exactly what it was but started playing around with it. My first website, OverseasDigest.com went up in February 1997, with no plan other than trying to find information about living overseas.

Back then there were only a few sites for people abroad, and most site owners knew each other. Now there are thousands of expat sites. I tried many different kinds of software and business ideas (I still have my first affiliate check from Amazon.com, something like $2.95). Most didn’t work out.

Why? Well If you don’t know what you’re building, how can you know what tools you need?

Without a plan, little knowledge of what I was doing, and no idea was I was going; I wasted a lot of time and probably hundreds or thousands of dollars.

 

  1. How I Lost A Domain Name

If you want a successful web business, even a small one, you have to pay attention to the smallest details.  I bought a website from someone on Ebay back in 2001. One of the domains included with the purchase was excitingcareers.com

When the time came to renew the site’s hosting package, I started getting reminder notices: one for the hosting and one for the domain name. I paid for the hosting, but kept ignoring the ones for the domain. Why?

I thought the domain was included in the hosting package deal. I didn’t take the time to check, I just assumed. I lost the domain.  When it’s your business, so are the details. All of them.

A follow-up to that story: One old tactic for appearing at the top of the Yahoo directory listings was to chose a domain name beginning with numbers. So my excitingcareers.com website became the less memorable 101Offshoreoiljobs.com

The tactic doesn’t work well any more, and if you want the domain excitingcareers.com, the company that grabbed it will sell it for $15,000.

 

  1. No Clear Refund Policy

When I started selling a $19 information product called the Offshore Employment Kit on my website mentioned in Mistake #2, the ecommerce company said that all my customers would have a 30 day money-back guarantee. Ok, I thought. That’s fair.

One day while checking the status of my site in the search engines, I noticed that another site had posted the complete contents of the Kit. After repeatedly emailing the site owner about why he had done so, (and threatening legal action) he finally replied “I wasn’t pleased with it.”

“Why didn’t you just ask for a refund?” I said.

“I couldn’t find out how, so I just got frustrated and posted it in anger.”

I now make sure that all my sites that sell something have a very clear and visible refund policy. I’m also certain that mistake cost me far more than a $19 refund.

 

  1. Careful With Affiliate Programs

This is an almost mistake. When I launched one of my websites, I started receiving invitations to join a certain affiliate program from a company I’ll simply call XYZ.  Having done some research on my competition, I was familiar with them, or at least I thought so.

One day I received an email from a person asking me if I knew about company XYZ. He told me that he had sent the company money, but they had not given him the promised service and were not responding to his calls or emails.

Soon I started receiving more such emails, and after some research, I found out that there were multiple complaints filed against Company XYZ with the Better Business Bureau in both Canada and the US.

I’ve always been glad that I didn’t’ join their program and promote it on my site.  The amazing thing is this started several years ago and their site is still on the web. And I still get invitations to join their affiliate program.

 

  1. I thought you backed it up

One of the realities of owning your own web business is all the little things that you have do to maintain your site. One of the most important and easiest to delay is backing up your site regularly.

One morning I woke up to find my site had disappeared. This was just one day after I had updated it and added a lot of new pages. I was using Microsoft Front Page to build my site and somehow my new changes were ok, but my old pages hadn’t been saved on my computer.

No problem I thought, since the hosting company said they had nightly back-ups. But in this situation, the reason my site had disappeared was because of problems with their server and their back-up system.

So I didn’t have a complete back-up and neither did they. It took me several days and a lot of work to get the site fixed and reloaded on their servers.  Not long after this, I changed hosting companies, and became much more disciplined about making sure I had everything saved and backed-up.

 

  1. Where Did They Go?

If you have a web business, and spend time learning about the industry, you’ll soon discover the “next big thing” in website related software.  One day I came across a company that created and sold custom software metasearch scripts for sites. They even had some that you could buy ready to go. There were two that interested me.

One was a metasearch engine that you could customize to search whatever sites you wanted. The second would search Buy.com, Barnes and Noble and Amazon for books. I bought the two scripts and paid the company to customize one of them to search certain job sites related to overseas jobs.  For several months, everything was fine. If there were any issues, their support responded promptly.

Then one day, I noticed that the job search engine was not returning results from one of the specialized sites. I emailed the company but there was no response. When I visited their website, it as gone and so were they.

I probably could have hired another company to fix the script, but that was well outside my knowledge. All that money and time invested in the scripts was wasted.  Now I try to do much more research before I buy software for my site. Without support, software is worthless.

 

  1. Problems Being Overseas

When I lived in Kuwait, it was one of the countries that can’t receive money from Paypal, which created problems when a company wants to pay their affiliates through the service. I found this out the hard way.

I tried to sign up for Paypal and sent them an email saying I was an American living in Kuwait, but Kuwait wasn’t on their list. What could I do? They responded by saying that I could sign up using my American address if I still had one, so I used my parent’s address.

Once I had received a money transfer (earned from selling for an affiliate company) into my Paypal account, I tried to withdraw some of the funds. Paypal froze the transaction, and put me on a treadmill of “do this and do that” to resolve the situation.

Finally they froze my account for 180 days, because I was trying to withdraw funds from an IP address in Kuwait, even though the account had a US address. I forwarded all the emails between their support staff and me telling me to set it up that way, but it didn’t matter.

Ultimately, I was able to get my money out after six months.

 

  1. OK, Who’s Idea Was This?

Once your web business is up and running, you’ll discover a lot of opportunities to work with others. I guarantee you’ll get emails offering you everything from mutual links on each other’s sites to more complicated joint venture arrangements.

When my expatriate-related site Overseas Digest.com launched in 1997, there were only a few other sites about the same topic like Expat Exchange, Escape Artist, Expat Forum and more.

I was corresponding with Betsy Burlingame, the founder of Expat Exchange and we thought it would be good to work together somehow. So we put out a press release saying something to the effect that we were “sister sites.” At the time it made sense.

But flash forward a few years, and frankly Betsy’s excellent site Expat Exchange had outgrown me by a huge factor, and our little press release was still in the search engines. Some people even described my site as a division or subsite of EE, even though we haven’t done anything together for years.

You have to be extremely careful with your marketing ideas and what you publish on the web. It will stay there, haunting you when you least expect it.

 

  1. Expecting American standards of quality and responsiveness

One of the biggest frustrations I used to encounter was this habit of expecting both my employees and our suppliers to use what I call the American standards of quality and timeliness.  But I quickly discovered that there are other standards of being on time and what’s OK or acceptable.

So I really only had a few choices.  I could get upset expecting them to perform the way that I expected and thought they should.  Or I could plan for delays and expect some jobs needing to be redone.  I knew I would have to pay much more attention to the process of the job and not accept their telling me don’t worry it’s all being handled.

One of my overseas companies did a lot of work for the American military in Kuwait.  One thing we provided were called MWR (Morale, Welfare & Recreation) items.  These included custom designed silkscreen tee shirts and custom cast military challenge coins.  On almost every order of t-shirts, the delivery time promised would never be met.  It didn’t matter if we switched suppliers.  The time frame for when something would be finished was simply not set in stone in that part of the world.

To ensure the highest quality of the challenge coins, we eventually found an American supplier in Vermont who worked with us professionally for many years.  The result was our company was known for having the highest quality coins available in Kuwait.  But we simply could not achieve this using local suppliers.

 

  1. Have more than one supplier

Like I described in the mistake above when you’re creating physical products to sell the quality of the supplier is most important.  This means his responsiveness, attention to quality and how easy he is to work with.  But you have to assume that something will go wrong and you will need an alternate supplier.

One of the t-shirts orders that we did for the U.S. military was very large by local standards and required 2500 shirts.  There was no local vendor  that could produce the shirts for us so we found an alternative in in Saudi Arabia.  However we encountered a problem because of the design of the t-shirts that the military unit had submitted.  The entire batch of shirts was confiscated by a Saudi Arabian government agency.  To solve the problem we were able to use the same supplier, but we had to furnish them with new blank shirts and a new design.

We lost some profit on this order that is that supplier had refused to work with us the second time than we would have been in much more difficulty.  It would have affected both our bottom line and our reputation.

 

  1. Not having a diversified product line (or having all my eggs in one basket)

When I started Overseas Digest in 1996 as I mentioned above I had no clear plan on what I was trying to do.  My initial idea, which was very naïve, was to create a subscription newsletter modeled on the Kiplinger newsletter.  I know now that people generally only pay for information they need to know not information that is nice to know.

As I realized that no one was going to pay money for information about living overseas I began to look for alternatives.  As I checked my search statistics I saw that the four most popular articles were about living and working in France, Spain, Italy and Germany.  So I decided to create downloadable digital pdf format books about living, working and teaching in each country.  And for a while they sold very well.

But then the European Union rules concerning work permits for non EU members changed making it more difficult for Americans to find jobs in Europe.  This perception about the difficulty seemed to make the market for my ebooks dry up almost overnight.  Although I had other ebooks about living working and teaching in places like China and Korea, they were not as popular as the other four countries.

It took a very long time to develop replacement information products.  Now although my primary audience is Americans who live and work overseas, my web sites focus on many different groups and niches, spreading the risk.

 

  1. Using a domain name that has to be explained

Whether your business is online or off you’ll probably register and use a domain name even if it’s just for just your email address.  If you want to save yourself a lot of time and aggravation pick a domain name you don’t need to explain.

When my partner and I started a company to supply the American military in Kuwait, we decided to focus on our strength in the market which included design, printing, publishing and paper products.  His name was Bassam, my name is Bill, so we created the name B2B Paper and Printing.

The domain name B2BPaper was taken, so we registered 2bpaper.com. My email address was vicep@2bpaper.com

Every time I talked to some one in person or on the telephone and wanted to give them my email address it became this long speech:  “Vice P (like vice president) at 2bpaper.com and that’s the number 2, bpaper.com”

Imagine if we had just called it something simple like Kuwait Paper. “My email address is William at Kuwaitpaper.com” Simple. No misspelled words. No Hyphens. No Numbers.

 

  1. Exploring too many possibilities

Of all my top 20 mistakes this one is the hardest to spot.  Sometimes I convince myself that learning about all the different business models online, reading blogs, listening to podcasts, looking for web sites for sale on Flippa.com and all the other things I find myself doing during a typical day somehow will benefit my business.  But the reality is a lot of it is just a big time-suck.

By spending so much time looking at all the possibilities out there you end up not doing the things that you need to do to make your business grow.

And the other part of the problem is that by seeing so many different people doing so many different things you can start a second guess yourself about whether you’re doing the right thing for a business.  If you work by yourself like I do you may not have people to bounce ideas off so you’re left talking to yourself.

I guarantee you that nobody can waste your time, convince you to do things for the seemingly right reasons and leave you going in circles better than you yourself can.

 

  1. Too many websites on too many platforms

I think this is part of the same problem I just described.  It’s a lot harder for someone to start a restaurant than it is to start a website.  So when you’re thinking about trying the latest greatest thing whether it’s blogging, running a membership website or doing video reviews, it’s really easy to register a domain and have a web site up in just a few minutes.

I’ve come to think of these projects as half finished holes.  Every website you create and every business venture that you start will divide your focus and complicate your thinking.  If you were to look at my online portfolio you would find websites in various degrees of development.

To be honest most of them were started to test something that I had read or seen on the Internet.  I have web sites designed to make money with Adsense.  I have a website that I built to try out Site Build It  when it was new.  I have a member’s only site.  And a few domains that I convince myself I’ll get to eventually.

And the problem is I’m always feeling like I should be doing something with all of them.  If one of them has a good month and one of them as a bad month that I find myself saying maybe I should focus on the  good one, Maybe that’s the one that will really fly.

This has been going on for years so I’m not sure if this qualifies as a lesson learned.

 

  1. No email address capture system

This is a mistake that when you make it it’s hard to undo.  I have a membership web site called dangerzonejobs.com which has been up since 2005.  This site was successful from its launch but all the content was behind a paid gate.  So my problem was if I were to do a newsletter what what I offer as content that would be different than the website.

For some reason I found it very difficult to answer that and ended up never adding a newsletter or a way to capture email addresses.  Now in February 2013 my site is seven years old.  Tens of thousands of people visit the site every month.  And because I never implemented a newsletter or something similar I don’t have a mailing list to reach those people.  The only good thing is that the competition for what the site does is fairly small.  So a lot of people do visit the site over and over, and search for it by name.

But the point is I have no way of communicating with the people who visited and left. Build your list!

 

  1. No disability or illness strategy

All of my websites primarily require me to create the content for them.  Dangerzonejobs is updated almost every day.  Twice now I’ve been in a position where I had to find a way to update them while being sick or injured.

The first time that made me think about this was when I had laser surgery on my eyes.  I had the sort of surgery that required a few days of almost no vision.  The only thing I could do was to zoom my computer screen as large as possible while it the same time making the room as dark as possible.  I didn’t have a plan in place for something like this happening.

In 2009, after being back in United States for one year, I was diagnosed with prostate cancer.  Fortunately for me the James Cancer Hospital at Ohio State University is less than an hour away.  I was admitted to the hospital one morning in August, had my prostate surgically removed and was discharged the next morning.  I updated my website the morning before I went in for surgery.  But when I got back home, because of that number of incisions and the catheter, it was difficult for me to sit up.

Looking back at both occasions I realize now that I could have planned ahead so that my sites would have been updated somehow, the members would have been happy and I could have been less tense about the whole situation.

 

  1. No exit strategy

Not having a plan for being disabled or ill when you work alone is a major problem.  But an even bigger problem is not having an exit strategy.  Almost all the businesses I been involved were one or two person operations.  If I’m sick or don’t work and I haven’t planned for it, things don’t get done and the business can suffer.

But the big question that hit me when I was preparing for cancer surgery was the worst case scenario.  What would my wife do with all these web sites, this business, if I died?  Fortunately the doctors did a great job and I been cancer free for years now.  Even so the question has to be dealt with.

But it doesn’t have to be something as final as death.  With a one person business what would I do if I just got burned out and wanted to do something different? Could I sell my business?

I highly recommend you check out Pat Flynn’s article on SmartPassiveIncome.com called What Would Happen to My Online Business if I Died? He too works alone (with the help of some virtual assistants) and faces the same situations.

 

  1. Not organizing my business as a business from the beginning

When I left the United States for Kuwait in 1992 I set up a checking account and that was it.  A few years later when I decided to set up an online business I needed a business account but I couldn’t set one up from overseas.  Fortunately a friend at working in my bank was willing to add the “doing business as” (DBA) designation on to my account.

I later discovered the real problem with this was that I was using my checking account for both personal and business reasons.  Ideally and especially when you setup an LLC you don’t want to co-mingle your money.  You should keep business and personal transactions separate.

But looking back, the situation was more subtle than that.  Because I was a one person creating online products and running websites from a small table in the corner my living room, I didn’t really think of it as a business.  If I had I think I would of found tax advice sooner, paid more attention to legitimate business deductions and just approached my activities in a more professional and businesslike manner.

 

  1. Not keeping my taxes straight

One of the problems I faced in my early years doing business in Kuwait was the lack of access to tax help.  Now you can go on the Internet and find plenty of tax firms who specialize in expatriate tax situations including businesses.  But back then such a thing was impossible mainly because the Internet didn’t exist as we know it today.

Fortunately for me when I started overseasdigest.com one of the people who wrote for the website was a tax specialist who had written a book about expatriate taxes.  She agreed to help me get things straight with the IRS which was fairly easy to do.  In fact the real fun didn’t start until I moved back to the United States.  See if you can follow this logic.

When I decided to move back in 2008, I knew I would be moving before the tax deadline.  So I decided to wait and file my taxes after I moved.  I canceled my post office box in Kuwait, set up a new post office box in Ohio, and used that address for my 2007 Federal return.  A few months later I received a tax bill from the state of Ohio for 2007 taxes.

When I contacted them I said that I had lived in Kuwait for the entire year 2007.  Their response was “then why is there a Ohio address on your Federal return”?  I tried to explain the situation and they said OK send us the state return that you filed.  I told them I didn’t file a state return because I was living overseas and didn’t live in the state since 1992.  Anyway I went back and forth like this and I had to get an attorney involved to finally resolve the situation.

If there’s a lesson from this it is to pay close attention to your taxes even when overseas and don’t hesitate to get professional tax help even if you have a small business.

 

  1. Spending money inefficiently

I mentioned before about being involved in too many possible income ideas and being intrigued by the latest greatest software and online business models.  One of those sneaky little result of this is I found myself sometimes spending money on things I didn’t need with the rationale that I was going use it for the latest business idea I was trying.

This might mean physical things like video cameras or books, or it can mean digital purchases like ebooks and online courses.  Another rationale for spending money is saying to yourself, “it’s OK, this is tax deductible.”

No matter what the size of your business, proper cash management is vital.  You have to learn to plan for slow business cycles like off-season slowdowns.  I still spend money to keep learning but it’s far less than it used to be.

 

So what about you?

What business mistakes have you made overseas?

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