I would never ever recommend that someone new to Internet Marketing spend large sums for a coaching program, software package, or any other huge investment into online business.
When I first began working online I did invest a bit more money than I had earned – that’s a bit hard to avoid in the beginning when you are still figuring things out, getting your sites up, and maybe making a few pennies on pay-per-click ads.
But I started with under $50, not with a $5,000 coaching membership. My start-up investment included the cost of Holly Mann’s Honest Riches, the cost of web hosting, and the cost of a domain name. That was it.
After my sites began to earn some consistent income, I began to use that income to invest in other products, services, or information, which I could use to expand and improve my sites, increase my reach, and thus increase my income.
On a simple Excel grid I kept track of everything I spent vrs everything I earned. For a while, even when I was earning some money, I was sometimes “in the red” a bit, in terms of having invested more than I earned. But this was something like $100 in the red at the worst, not $5,000.
When I see or hear of people promoting coaching programs for new Internet Marketers, for $5,000, I cringe.
That does not mean that there is never a good time to invest $5,000 in your business, online or otherwise. But where Internet Marketing is concerned, the beginning is not the right place to start with big investments! Unless you fall under an exception which I will explain below.
Here are a few of the reasons why I would never recommend that someone invest large sums when they are new to the field:
- How do you know yet if Internet Marketing is for you? This is a unique field. Some people are made for it, but some aren’t. Internet marketing requires a passion, a persistence, a self-discipline, and a willingness to learn. But most of all, if you don’t have enough interest and drive in the field, to persist long enough to begin earning a substantial income, you might wind up quitting before you start. And you know what? That’s okay! There is nothing wrong with dipping your toes in the water and taking them out if you decide that mountain streams are not to your liking. Drive back into town and find the nearest heated swimming pool. If you follow my metaphor – my point being, that some people test the water of Internet Marketing and then find it’s not for them. Some jump right into it and keep right on going with complete enthusiasm – even if it takes them two years to make their first dollar! But if you have made a huge financial investment and then find out that it’s not for you, you might have a serious problem.
- When you are new, you are less familiar with the field and can not differentiate easily as to which products or services you really need, and which will be the most useful for you in terms of Return-on-Investment (ROI).
- Internet Marketing is a big field and there are many forms of online business. You might eventually find that your heart is in blogging. Or it might turn out you do great with running Pay-Per-Click advertising campaigns, or membership sites, or mini-sites, or some other form of online business. When you are just starting out, you may not have found your place yet. You could invest too much in a product or service which turns out to be in the wrong field and thus of little use for you in the long run.
- When you are new, it is more difficult to differentiate between scams and legitimate products and services. When you become more familiar with the field you will be able to recognize these things much more easily.
These are a few reasons I can think of off hand, but you can probably think of more.
There is one exception I should mention. If you have money to throw around and you feel like throwing it around, by all means, go ahead. Just be aware when you are throwing it around and when you aren’t. If you are a multi-million-dollar hotel chain owner and you are considering trying your hand in Internet Marketing, $5,000 may be pocket change for you and it might even make sense for you to invest that when you start out, particularly when this investment might save you time. In that income bracket, your time is much more valuable as compared to your money. As long as you know that you might lose it if things don’t go as planned, and you are okay with that, then I would say, go ahead.
As a general rule, in Internet Marketing, I would ask yourself these questions before paying for any product, service, or information which is meant to help you earn money online:
1. Does it make sense to me that this product can help me earn money online, and do I understand how and why this is? Or am I just taking someone’s word for it? (The answer to the first question should be “yes” and the answer to the second question should be “no!”)
2. Can I invest this amount of money without putting myself at seriuos risk on some other front?
3. If I invest this money, and lose it if things don’t work out as I hoped, could this situation be described as “disaster,” “life crisis,” or “financial catastrophe?” The answer to this question should be “no.”
I hope this helps. If you meet a new Internet Marketer or Internet Marketer-to-be who is hemming and hawing about their first investment or purchase, please feel free to send them to this page.
This post was inspired by Disclaimer and What to Expect at a Marketing Event on Honest Holly.