In business, cashflow is king. You need to have money coming in at a faster rate than money is going out otherwise you are creating a money pit, not a business. Once you have a steady income stream and have some nice profitable months it’s time to look at how you spend your money. All businesses have costs and with a domain business, the less of your profits you spend on things like hosting, domain renewals, advertising, development, etc. the more you can spend on adding solid domains to your portfolio.
Spending less on these services doesn’t mean lowering your quality of service or even changing providers. If you can save $100, $1,000, or even $5,000 a month that money can be spent on adding quality names to your portfolio, while still using the services you know and love.
While I’d love to take credit for this tip, I myself learned it from a seasoned Domainer who explained this to me over beers at a conference years ago. He said that he had saved tens of thousands of dollars by paying for monthly services a year in advance. He was religious about it and applied the same thinking to renewals always using coupon codes or bulk deals.
I first applied this to hosting and was instantly saving a few hundred dollars a year. I did this in the beginning of the year and felt some nice piece of mind knowing that hosting was covered for the whole year, no more monthly fees, and I had saved money. I told myself that I would take the money I saved, put half of it in the bank, and spend the other half on domains.
I flipped one of the names (I bought it for $125) for $1,200 and ended up with two other names I bought for $50 each. It was a good feeling and the first time that I realized how saving more could translate into spending more, and in the end making more. I continued going through my monthly services one by one calling each and seeing what kind of deals I could get paying one or two years upfront.
Then I went into domain renewals and started saving thousands a year in renewal fees and put 75% of this right back into domain acquisitions. Last year I took a $3,500 savings and put it into a one word .COM, Summon.com which I then flipped for $17,500. I saved $3,500 and used that money to generate $14,000 in profit. Same logic applied with these profits, 75% back into domains and 25% in the bank.
With 11 months of 2013 ahead now is the perfect time to contact all those monthly services you’ll be using all year and locking in some nice savings. Then take those savings and invest that money back into your business. Save More. Spend More. Make More.