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Running a U.S.-based Business Remotely from Australia and Succeeding

Running a U.S.-based Business Remotely from Australia and SucceedingWhat is and when did it start?

FitnessLyceum is an online retailer of exercise equipment. It retails leading U.S. brand names and it sells only to U.S. customers. I originally founded my Delaware LLC in late 2010 before I knew what it was I was going to sell. And, I started my American business even though I was living in Melbourne, Australia. Starting a business before knowing what to sell and founding the business on the other side of the planet sounds crazy but it’s worked out very well.

Why did you start your company?

I had spent most of my adult life working in IT and loathed it. By the time I was in my late forties I was married, had two young kids, had no savings, had no pension to speak of, constantly maxing out my credit card and had recently arrived in Australia employed in yet another IT job I didn’t want.

For years I’d wanted to start an online business of some sort but had always thought it was too much of a risk to have your own business; safer to be employed by someone else.

It was having two young children to support, having no pension, not owning my own house and seeing colleagues being made redundant after working for an employer for decades that made me realise that working for someone else was taking more of a long-term financial risk than being my own boss.

However, I soon ran in to problem when trying to start my own business.

First, I didn’t have any money. I wanted to run an online retail store but lacked the funds to buy merchandise. Eventually I read about drop shipping and decided that this would be an ideal business model for me.

For those of you who don’t know what drop shipping is, it is where a retailer signs an agreement to sell goods from a supplier or manufacturer, then lists the products on their website. A customer makes a purchase and the retailer gets paid. The retailer then pays the supplier the wholesale price of the item and the supplier ships the item direct to the customer. The profit is the margin made between retail sale price and wholesale purchase price. Operating as a drop ship retailer dispenses with the need to buy inventory upfront. Basically, with this model of business, my only upfront investment was in getting my website designed and hosted.

But, I faced a much bigger problem than having no money. I was in Australia on a temporary worker’s visa. I wasn’t an Australian resident. Unfortunately, an Australian company has to have at least one director who is an Australian resident.

Legally I couldn’t form my own Australian company. In order to run an online business in Australia I would have to go into partnership with an Australian resident. I didn’t know many people in Australia and certainly no one I’d want to go into business with.

Faced with this obstacle I had a lateral shift in thinking. I still can’t explain how or why I came to this conclusion but, I decided to investigate the possibility of founding and running an online retail business that would be based in the U.S. and would retail to the U.S market.

How was it financed?

I financed it all myself with whatever money was leftover from each month’s pay cheque. I often had to put things on hold until I received next month’s salary. The biggest expense of setting up my U.S. business was flying over to the east coast of America to attend a meeting with a small business advisor to open a business bank account. Since the passing of the Patriot Act U.S. banks are required to ‘know their customers’ so opening an account remotely is almost impossible, one has to go to a branch in person in order to open an account.

I remember setting an appointment date with the bank but not knowing how I was going to pay for the airline tickets. Eventually, I scraped together enough funds to buy the tickets – just 3 days before I was due to fly out to the U.S.

The frustration of not having enough funds to finance the next part of the project is something I’ve just had to accept and deal with. Looking back, I can see that the ‘delay’ between pay cheques actually was a benefit in many ways. It allowed me more time to research on what I needed to do and forced me to save money along every step of the way.

When did you officially launch?

My official launch date was the day after I obtained my U.S. PayPal business account, which I was able to open thanks to having a U.S. bank account.

At the end of November, 2010, two days after getting my PayPal account, I made my first sale.

How many people are currently working for your business?

My philosophy is to outsource everything I can, both software and people. With judicious use of outsourcing one can significantly reduce costs and can implement business processes and operations at a fraction of the cost of what many ‘traditional’ online businesses operate at.

Right now, the only full-time employee is me. However, my site was designed by a wonderful company in India, my website’s logo was designed by a gifted artist in Bulgaria, my banners were created by a graphic artist in Moldava, most of my SEO work is carried out by a hard working team in India and many articles I use for SEO were written by writers living in the U.S. and Wales. I often allow myself to think that I run a ‘global’ business.

Eventually, I want to outsource customer service. Because of the time difference between the U.S. and Australia I am often woken up in the early hours of the morning to answer customer calls. Losing sleep is very debilitating and wasn’t something I reckoned on when I started my business.

I really do believe that the internet is the World’s greatest leveller. We are now in an age where those with real talent can succeed in business – regardless of location or circumstance.

I’ve learned that to compete against established, big-players one must outsource and outsource wisely. Not only can outsourcing bring real leverage to what limited funds I have, it also allows me to do what I should be doing, that is, managing my business.

For a fraction of the budget that many big players in my industry spend I have got myself a professional looking and functioning website and an internet presence that puts me in real contention with them.

What almost killed your business at the start?

Being very naive in dealing with freelancers I found on the web. When I first started out I expected they would have the same degree of integrity as me. At the time, I believed that it was they who were doing me a favour so, when they asked for money upfront, I was too willing to pay them. Looking back I realise just how crazy I was in paying upfront for services to people I hired over the internet. I mean, I knew nothing about them; their work experience, their phone number or even in which country they lived.

For instance, when I needed my website to be designed I hired a guy who insisted on being paid $400 upfront and wanted payment by Western Union. He submitted a design but didn’t do any work. He contacted me again after about 2 weeks and apologised profusely, saying he’d been sick and had family issues and said he would immediately begin work on my site; he just needed another cash advance of $200. I paid him, using Western Union, but never heard from him again.

I was a slow learner and was repeatedly conned. I lost a lot of money and thought more than once about giving up.

Eventually, I realised that when dealing with service providers, it was I who was in control. Now I never pay until I get exactly what I asked for. If a provider complains and wants some form of down payment I just go and find myself another who will do things by my rules.

Running a U.S.-based Business Remotely from Australia and SucceedingWhat is the one thing you did right?

I learned things quickly. I had never run any sort of business before, never mind a business based on the other side of the planet. I really did have to learn everything, from designing a user friendly ecommerce site, hosting, SEO, how to form a U.S. LLC, how to get a U.S. bank account, how merchant services work and how to deal with customers. Oh, and I’ve also learned a little about exercise equipment.

I am often in contact with other online business owners who are stuck at some point in getting their business going, which is understandable but, I am amazed that some are still ‘stuck’ after many months.

If you’re going to succeed in running your own business you really do need to be able to learn and adapt quickly; and, you’ve got to enjoy the challenge of doing so and never let fear of the unknown stand in your way.

Are you currently in the black or red?

I’m happy to say that I’m in the black. I’ve been in profit now for around 9 months. My profits are small and, right now, I’m re-investing most of the profits back into my business.

What type of marketing or advertising do you do?

I could write a book on this but I’ll try to keep it short. In the beginning, the ‘big plan’ was to use Pay Per Click advertising using Google AdWords. I spent weeks researching AdWords and, before ‘going live’, I even hired a Google AdWords certified professional. Although he did at fantastic job of handling my campaign, I could not return a profit. After nearly five months my business account was all but empty and I had to accept defeat.

For around a month I did nothing. There was no traffic at all to my website. I even thought about selling my business and trying something else.

However, I began to read up on Search Engine Optimisation and to really understand what I needed to do in order to get my site ranked.

I ended up outsourcing to a company in India to rank certain keywords. I arranged a deal where I would only pay when the keyword phrase reached certain points: 50% when it reached page three of Google and the remaining 50% when it reached a top 5 position.

This has worked out extremely well for me. There was no upfront cost and once the keywords gained top Google listings, I made sales and could then pay the company in India.

I’ve also done some SEO work myself, especially guest blog posts. While it’s time consuming to find blogs in my niche that accept guest posts, it’s even more time consuming in writing the articles. But, it has been very worthwhile. I now have backlinks from some very high PR sites.

I’ve also listed my website products in Google Base. This brings me in a lot of very targeted, free traffic.

As for future plans, I am going to explore selling my products through Amazon and setting up my own affiliate program.

What would make your business more “Successful”?

Traffic, and lots of it. I’m obsessed with getting more traffic targeting certain keyword phrases. I’ve a very bad habit of logging in to my Google Analytics account many times throughout the day.

I’m certainly no expert in online ecommerce but, if a beginner sort out my advice, it would be to forget everything else and concentrate on getting traffic. Everything else is totally dependent on it. Don’t spend time on ‘conversion techniques’, or ‘making your website more user-friendly’: just get traffic.

Would you want to be acquired by a bigger company, run it yourself or sell in a couple of years?

I really do enjoy running my online retail store and certainly have no plans on selling. Of course, if someone was to offer me a big fat cheque, I might be persuaded. But one thing is for certain: now that I run my own business I would never go and work for someone else ever again.

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