Start Up Funding for Your E-Commerce Business

Funding your new e-commerce start-up will be the most difficult task in getting your new business up and running.  For most new entrepreneurs, the sources of more traditional financing, such as bank loans or angel investment are simply not realistic options.  For the lion’s share of new small businesses, the most realistic option for start up funding will be self-financing or bootstrapping.

Bootstrapping is defined as “a self-sustaining process that proceeds without external help.”

Based upon my own experience, bootstrapping is really the only way to go to start a new e-commerce site or online business venture.  Many of you might be saying to yourselves “I don’t have any money … how can I self-finance or ‘bootstrap’ my new business with no money?”

Well, let me share with you how I got started with my own business.  Back in late 2003, I was working as a sales rep for a large online media company and I was making a nice living, but I wanted something more.  I had been dreaming about starting my own business for years, and one day, while cleaning out the junk mail folder in my Inbox, I happened upon one particular email that, for some reason, caught my eye:

Discover the Secrets of How I Make $20,000 A Month

• Working Less Than 30 Minutes A Week
• Without My Own Web Site
• Without a Product of My Own

I can remember, when I saw this, I literally scoffed at it out loud.  “Give me a break!”  I said to myself.  Something compelled me to open the email and take a closer look though.  Now, I had literally seen and ignored dozens of these emails, and as a seasoned online media professional (eh-hem), I was convinced that I had seen every hokey promotion and scam ever conceived online, so nothing was going to fool me.  I opened the email anyway. The ad was promoting an eBook entitled Google Cash from a guy named Chris Carpenter, which outlined how to use Google’s Adwords pay-per-click advertising program to earn an extra income online:

“You won’t need to be an online expert. You won’t need lots of money to start. You can begin with $5 and 2 hours/week of work. You can start making money in less than 15 minutes.”

Now, I had been thinking about starting my own business for years, but I had one major problem:  $0 start-up capital.  I had a young daughter, a sizable mortgage, and another daughter on the way, and very little cash to spare. So, the prospect of earning some additional income that required only $5 and 2 hours of work per week was VERY, VERY appealing to me.  Even though I was convinced that there was probably no way that making “$20,000 per month working 30 minutes per week” was remotely possible, I simply couldn’t resist.  So, despite my skepticism, I went ahead and bought the ebook.   It cost $47.

I downloaded that Google Cash eBook, immediately printed it out and started reading it.  I drove straight home from work that night and following the instructions, I built my very first Adwords campaign, promoting a spyware tool from the Clickbank affiliate network.  I was up until 2am building that first campaign, following the directions to the letter.  I didn’t know it at the time, but on November 13, 2003 at around 1:45 in the morning, after starting my first AdWords campaign, I had officially launched my first online business.

The next morning at work, I logged into my Clickbank account and was surprised to find that I had already made 2 sales on this first campaign for a total commission of $19.94.  “No way,” I said out loud.  I logged into my AdWords account and saw that I had only spent $4.08 in paid clicks for a total net profit of $15.86 on my first day of the campaign.  Now, $15.86 in profit might not seem like much money, but to me it might as well have been a million dollars.  I had actually made money!  I was stunned at how simple it was.  I was so excited, I called my wife.  “Honey, I just made money with this new Google thing!  I can’t believe it.”   “Really?” she said.  My mind raced.

Again, I raced home from work that evening and immediately built out several other campaigns right away, testing out new affiliate products in a mad scramble.   “This is too easy, this is way too easy,” I thought.  After just a few days of building my first few AdWords affiliate campaigns, I went on to buy Perry Marshall’s Definitive Guide to Google Adwords that helped me quickly improve the performance and click-thru on these first few PPC campaigns.

Using Google Cash and Perry Marshall’s AdWords guide together, I made $961 in net profit in my first 30 days, which paid for most of the Christmas gifts for my family that year (no kidding).  That was December of 2003.  The following year in 2004, I continued to “moonlight” on my new business venture, building and tweaking AdWords campaigns and promoting affiliate products on the side while working full time.  My total net profit for that next year in 2004 from my AdWords affiliate campaigns was just slightly over $25,000 while I was still working full time.

That is exactly how I got started in the affiliate marketing business.  I started my business without even knowing I was starting a business.  I bought the Google Cash ebook on a lark just to prove that it couldn’t work, and despite my better judgment, it worked anyway.  Now, I’m not telling you this to get you to go out and buy these products. If you’re new to affiliate marketing and Google Adwords and want to learn, both of these books provide great information about how to get started, but you shouldn’t go out and buy them thinking that you’re going to get-rich overnight.  There is still plenty of opportunity doing this type of affiliate marketing but the substantial profits make the business highly competitive.

The reason that I’m telling you this is simple:  I started my business with a $47 purchase of an ebook.  At the time, I couldn’t even afford the $47 – I bought it on a credit card.  I literally started with nothing. I didn’t have a business formed and didn’t get the business entity setup until several months after I started running these campaigns.  I didn’t have a website, a bank account or anything else for that matter.

I started my business with nothing but a $47 eBook paid for with a credit card. Just to put that in perspective, since then, my business has generated over $1.5 million in affiliate commissions … all on the back of that $47 eBook I started out with.

I’m not saying this to brag or to boast, just to prove a point. Most of the world’s greatest businesses have started out with very little capital upfront – just an idea and some elbow grease.  While I’m not insinuating that my business is one of the world’s greatest, my point is that if I started with nothing and had success… anybody can do the same thing.

It doesn’t take bank loans, angel investors or venture capitalists to start and build a successful business.  An online business takes very little money to get started.

Additional Resources to Start Up Funding for Your Business:

• So You Want to Start a Tech Business (E-Commerce Times)
• Financing Your E-Commerce Business (BuyDomains.com)
• Start Up Business Financing (About.com)

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Tagged as: affiliate program, e-commerce, start up