It’s one of the questions I get asked the most: Should I buy a Big or a small website?
Just to cut to the chase the answer to whether a big website is better than a small one is very clear that bigger (meaning more high quality probably a higher level of investment required) increases your probability of success. So just put that aside big has more likelihood of success than small. But that being said investing in anything whether it’s online businesses or any other kind of investment is not simply a mental logical game. There’s also a really important psychological component to it. So when people ask me whether they should buy big or small on their first site there are definitely some reasons to buy small and related to that psychological question is the first thing which is:
Buying small allows you to build confidence that you may not have.
Now we lack confidence typically because of fear of the unknown. There’s a lot of things that we may not know the first time we get into an online business. Even the transaction process how do we find the website. How do I evaluate it? How do I step through the acquisition process? and then what do I need to do to operate it? All of those have within them unknowns. So going through that process the first time can make some hidden things known to you can increase your confidence level and that can be really important.
“Try to Buy”
The second thing is that it’s kind of a “try to buy” scenario where if you buy a website and operate it, it exposes you to what it means to be a website owner. What kinds of tasks you have to do and what the emphasis are what skills are required in all of the things that you might expect out of an online business realising which of those are legitimate and valuable to you personally and which are not. So you may not have any idea what it would be like to own a website depending on what your career experience is so far. So “try to buy” is also an important criteria.
Cpaital At Risk
Now one of the things in the third place that people think about quickly when they’re asking big versus small big investment versus small investment of course is the capital that you put at risk and very clearly if you buy small you put less capital at risk. But think about it this way even though there’s less capital at risk it doesn’t mean that buying small gives you an overall lower risk profile. In fact if you do risk analysis you know that you take the probability of success times the amount to be lost or gain to determine overall whether it’s a good decision or not from a risk perspective. And frankly when you buy smaller you’re buying more risky assets. They’re usually younger. They haven’t withstood the test of time or competition or changes in the environment or technology. And so they’re more risky. So sure and overall he may be risking less capital but it doesn’t mean that your probability of success is greater buying small fact. It’s almost always lower buying small than buying big.
So risk risking capital is certainly one thing that you should think about but don’t assume that you’re going to be more successful with a smaller site you probably won’t be. And then finally people think about…
If I would have asked you, you may have said well education is really the first thing. What you mean is that you believe you can leverage what you learned through the ownership of a small website against what you would need to know for ownership of a big website. And of course that’s very legitimate. And certainly there are things that you will learn operating buying and operating a smaller site that you can use when you buy a bigger site but don’t overestimate that education potential. You’ll learn a few things but a lot of things that you would learn you’re going to learn anyway and the things that you learn on the small side are much more dependent on the kind of Neish this fall site is in the business model that uses its particular problems that you have to solve. And a lot of those things are going to be completely different and for any other site you might buy whether it’s another small one or a bigger one. So there is value in that educationally but really the bigger value is psychological. Like I explained earlier like few if you have confidence in a lot of those areas or you you know you have confidence in the process your research ability your problem-solving ability the application of your skills to new problems those kind of things. You may want to just go ahead and buy big from the very beginning kind of reflects your commitment to getting into online business confidence level. If not that’s not a problem.
It’s not in any way demeaning to have you know lack of confidence that particular area where the things that you don’t know that’s actually a nice thing to have. But if you lack confidence sometimes it’s better to buy small and learn about that area because knowledge decreases risk knowledge increases confidence. That’s kind of the criteria. I have clients who buy in step wise fashion. They might buy very small where there’s limited or no expectation for return on a very small investment and it’s purely for experience and education. And then they might buy a medium size on their way to buying a big investment and other clients who although they’ve never owned an online business before they’re quite confident about how they would go about learning and operating and taking over new business. And so for them it’s actually makes a lot of sense to go ahead and just jump in and make a big investment into a site that meets their lifestyle objectives whatever that might be.
So that’s what I have for you on this question of what your first website should you buy big or small.