Starting a successful second business (help needed)

[rogercbryan]

Starting a successful second business

This post is my way of humbly admitting that I am doing a horrible job of starting a second profitable business. My primary company which I started in 2006 has seen a great deal of success and has branched off into many different market segments. Yet I still consider them all to be one main company. Since November of 2007 I have been trying to start a web based business and have had no success.

Here are some of the problems I have had

#1 is finding a trust worthy reliable web designer who follows through on what they say they can do.

Other problems have been
Time
Organization
Proper planning
Finding a good manager

I think the primary problem has been that I have no experience in this industry. When I started my brokerage company I was coming in with 10+ years of management & logistics experience and 5 solid years in auto auction and vehicle donation experience. I had the needed contacts to get up and running.

In trying to start a web based business I had no experience, no resources, no one to call and ask questions. I’ve been flying blind and it has lead to a small disaster. I now have twice the amount of money invested in my second company in order to get it up and running then I did in my first to get it started.

This post has two purposes:
1- It could be an outline for what not to do when starting a second business / web based business
2- It is a post where I’m asking for advice and guidance

If we go back to the things I’ve done wrong.

Web Designers- You know how people say that lawyers and used car salesmen are the most untrustworthy people you will ever deal with… well I would add web designer to that list. I’ve gone through 6 different developers over the past 9 months. They have been 90% of the problem. Had I gone with the right developer from the get go I would not need to make this post.

Time- I work 50 to sometimes 80 hours a week for my primary business. I’m often on the road 2-3 days a week. This has made it hard to find the time to start a second company while doing what I need to grow the first one as quickly and as profitably as possible.

Organization- Because of lack of proper communication with web designers it has been impossible to start organized. I often would have major parts of my projects side tracked because a developer would fail to keep a time line and then throw everyone else off track. My business plan has changed way to many times for comfort and my marketing plan is collecting dust because I have no final project to market.

Proper planning- This is 100% my fault. I can blame web developers all I want for the mess I have but the reality is that if I had worked out this project from start to finish and then stuck to my plan I would have a different situation. This project started out a simple site with a few functions but morphed into a combination of multiple databases built across numerous types of non-compatible code.

Good Management- This ties everything together and it is something that I have only been working on for two months. Do to the fact that I have limited experience in this industry and that I have limited time to dedicate to learning the needed skills I have been looking for a good project manager to take over and finish this project off. These types of people are not easy to find and since I have been burnt so many times in the past I’m wary of using someone I don’t know and trust.

Summary- I have a little over $12,000 invested in this project with another $5,000 to $10,000 available to finish it off. Everyone that I’ve run my idea by thinks it will be a huge profit center IF I can get all the pieces put together. I’ve had one developer who works on my primary site tell me that this is a pretty unique idea and he can’t wait to see it a reality. Then he also told me it would cost $40K to have him do it.

Here is what I’m looking for
1- Advice on what to do next
2- Advice on what others have done to start a successful SECOND company. I’d love to hear from someone who has experience in building a multi-million dollar company and then go into a brand new industry and start a second one.
3- Direction to go on my project
4- Contacts for any project managers that you all might know
5- A glass of wine to go with my cheese…. (from all my whining)

Thanks!

[GhostFac3]

I'm not sure what the site is going to do, but these are my suggestions:

1) Find a new developer, preferrably someone within driving distance. If you can't find one that you like or haven't dealt with in a positive manner. Bid your project out. Ask around for different names and numbers of developers (at least 3).

2) Have signed contracts with proof of ID and expectations. There is nothing a good contract can't fix (may have to talk with a lawyer)

3) As in Real Estate Developement, the Architect (or in this case web developer), may offer services similar to a general contractor and project manager, be sure to ask about all this before hand.

4) And this will help with more organization. Have constant (By constant I mean weekly) phone or in-person meetings. You may be able to add that into the contract if need be (I don't know). This way everyone knows the status of everything they need to know and where to go next.

[jasaunders]

Roger, I've definitely feel your pain with web designers. The same thing happened to me on a couple major projects.

From then on, I only use web development firms. I no longer use a single contracted web developer or freelancer, I will only use companies and I personally check their references with other companies they have done projects for. Using a web development firm gives some additional reliability, especially if they are an established company.

I also use strict SLA's (Service Level Agreements) that specify the time and performance required from them and I make payment tied to their performance and meeting deadlines. If a deadline is not met, the firm knows up front they will receive a reduced payment, or likewise an incentive for finishing early.

You don't know how much I feel your pain, as I wasted thousands of dollars, months of development time and went through three developers for a project last year, none of which got the job done right

[matt_15]

thanks jasaunders. I learned some good stuff from your post

[Lambo]

i learn something everyday

[rogercbryan]

Roger, I've definitely feel your pain with web designers. The same thing happened to me on a couple major projects.

From then on, I only use web development firms. I no longer use a single contracted web developer or freelancer, I will only use companies and I personally check their references with other companies they have done projects for. Using a web development firm gives some additional reliability, especially if they are an established company.

I also use strict SLA's (Service Level Agreements) that specify the time and performance required from them and I make payment tied to their performance and meeting deadlines. If a deadline is not met, the firm knows up front they will receive a reduced payment, or likewise an incentive for finishing early.

You don't know how much I feel your pain, as I wasted thousands of dollars, months of development time and went through three developers for a project last year, none of which got the job done right

Do you also use a project manager or do the firms you work with provide that service as well? I've been thinking about hiring a project manager to get every thing a little more organized. I would wager that firms are a bit more expensive... but I guess you get what you pay for??? If you have any recommendations for firms to work with I would be grateful.

[rogercbryan]

I'm not sure what the site is going to do, but these are my suggestions:

1) Find a new developer, preferably someone within driving distance. If you can't find one that you like or haven't dealt with in a positive manner. Bid your project out. Ask around for different names and numbers of developers (at least 3).

I tried the 'local' developer route and all though we could meet together he still bailed halfway on the project when it got a little too complicated for him. I like the advice for multiple bids... I need to get a project manager who can do a good RFP for me.

2) Have signed contracts with proof of ID and expectations. There is nothing a good contract can't fix (may have to talk with a lawyer)

Again I agree but at the same time contracts are only worth the money you are willing to spend to in force them. Most of these small time developers wouldn't even show up to court. If I'm serious about this project I need to find serious developers.

3) As in Real Estate Development, the Architect (or in this case web developer), may offer services similar to a general contractor and project manager, be sure to ask about all this before hand.

Good info...

4) And this will help with more organization. Have constant (By constant I mean weekly) phone or in-person meetings. You may be able to add that into the contract if need be (I don't know). This way everyone knows the status of everything they need to know and where to go next.

I've done this... the problem is always that either the developer over commits and then hits a wall... or something gets a little to complicated and they use the excuse that they don't know how to do what I'm asking.

This all goes back to having a solid plan and sticking to it... I'm beginning to think that the majority of my problem falls with my planning.

Great info! Thanks!

[jasaunders]

Having a solid RFP ahead of time is a huge huge help in making sure you get what you want and in a timely manner. It takes an enormous amount of time upfront and make sure you give yourself the flexibility to change minor things as the project progresses, but having everything laid out ahead of time I have found to be critical.

I have been my own project manager a couple times with outsourced firms, but none of those ended successfully and I realized I didn't have the technical knowledge to communicate effectively with them. With local development firms, I have found the communication and organization to be a lot easier.

I am in the process of finding a development firm right now for a major project. I have it narrowed down to about 5 firms. I'll let you know how it goes and if any of them work out. I'm hoping to make a selection in the next two to three weeks.

Basically how I started was I found firms that have done nearly identical projects. This way the programming isn't new to them and they could hopefully re-use existing code. Plus you know their work is good already. For instance, I am working on a new startup which is a monthly rental service (similiar to NetFlix). I basically looked for developers who have built nearly identical sites except with other products, DVD rentals, handbag rentals, etc... This way they already have the backend system and most of the functionality done, just some major customization for our specific application.

And firms are definitely going to be more expensive, its a tradeoff, but hopefully you get what you pay for.