1. Presentation to Castlereagh Online Business Programme

2. My Objective Today To provide you with the benefit of my experience so you can leverage my good experiences and avoid my bad experiences

3. How will i do this? Start with a model for your business planning - Exit Plan Look at your motivations for going online Examine the Steps involved in developing the business i.e. Step 1: Start with the end in mind Step 2: Start building backwards from the Exit Plan Step 3: What to Expect - Survival, Success, Takeoff Pitfalls - experiences I would avoid if I were to do it again Short cuts - sensible things I would do next time to avoid trouble and save time Realities that you face I will illustrate this with my personal experience in building Novara Technology from its inception in a spare bedroom to sale for a 7 figure sum.

4. Why are you going online? Opportunities: sports clothing, garden furniture, handbags, safety equipment. Remember most online activity should be complemented by real world activity where possible(Amazon versus Barnes & Noble)

5. Step 1: “Start with the end in Mind” Be clear in your own mind why your are doing this, what is your exit strategy? This will dictate many of the the decisions you make as the company evolves. Facts from Enterprise Ireland research on Scaling & DNA Where in an ideal world do you want to be in 5 years time? Attractive Exit Plans 1. Sale to a competitor 2. Family business 3. Sale to a business looking to enter your industry

6. My business - Novara Technology Started in a spare bedroom – grew to second largest hosting company in Ireland with in excess of 10,000 clients (including organisations such as Jurys Doyle, the Department of Justice, 98FM, EBS Building Society, the Department of Agriculture) For more info see my site www.eoincostello.ie

8. Step 2: Start building backwards from the Exit Plan Starting backwards from my “Exit” plan (sale to a competitor) what was I looking for in a business: 1. Cash flow from repeat income 2. An area that would grow (even if the “hot”.com fad went away) 3. The business was not only earning an income(current value) but was also building a solid saleable asset i.e. a large customer base (capital value).

9. What to expect - The phases Novara went through Phase 1: Survival Phase 2: Success Phase 3: Take off

10. Phase 1: Survival Characteristics......................... People Financial Operations How long does this phase last?

11. Phase 2: Success Characteristics......................... People Financial Operations How long does this phase last?

12. Phase 3: Take off Characteristics......................... People Financial Operations How long does this phase last?

13. Pitfalls of running your own business In terms of any internet business what mistakes would I NOT want to make again Pitfalls 1. Hasty set up with an unreliable business partner and no protection mechanism for me (shareholders agreement, escrow for money invested). 2. During the survival stage I was wedded to a personal obsession with automation at a time when building the business was the priority ( a common problem in online businesses is to spend the start up budget on the technology solution and leave 10% for the marketing and running of it – why: because focusing on getting something built is easier than selling for many people). Start small on the technology and big on the promotion/marketing. 3. Poor cost-benefit analysis of early decisions, more “emotional” decision making without projections – In Success phase moved to - “Facts not Opinions” 4. Letting staff dictate your terms of business or operations.

14. Short cuts If you are new to internet marketing you may lose time and money at the start. Try to find a mentor who can guide you to gain skills required to succeed online(Go for it programme). Avoid learning the hard way. Be clear on systems thinking for your business, what you spend on marketing must turn in to sales at a predictable rate, therefore Google PPC ads delivering people to your site must convert to closed sales (Google Analytics) Use open source/existing third party applications as much as possible and spend as little as possible on bespoke, hard to maintain web infrastructure. Use the majority of your budget for marketing instead. Leverage free promotion services: Discussion forums, email discussion lists, Facebook etc.

15. Realities Most businesses need three iterations of their first idea before getting to a successful, profitable formula. End of survival phase - Lack of persistence makes most people lose hope towards the end of this phase. Stepping stone to better things “The successful companies spend a far higher percentage of their budgets on marketing than the less successful ones.” Secrets of Software Success Harvard

16. Go for it!! Books I recommend 7 Habits of Highly Effective People - Covey Crossing the Chasm - Moore Innovator's Dilemma - Christensen