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524-Master of Internet Business Shares Secrets of Success

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					27-Year-Old Master of Internet Business Shares Secrets of Success
Jeff Morin is a Classic Small-Business Entrepreneur (CSBE). Here's how I define CSBE:
someone who has deep knowledge of a market segment that is inefficient or poorly served
and develops a way to correct the inefficiency -- preferably without too many competitors
even noticing -- thus assuring higher-than-normal profit margins. That's Jeff and his Stafford,
Va.-based business, Coins for Anything.

A brief background: Jeff is a 27-year-old former Marine sargeant who, at age 19, became
interested in something called "challenge coins." If you're in the military, you know what
challenge coins are. But most people don't. A challenge coin is a collectible coin that
commemorates service in a particular military unit or mission. Jeff noticed that most of these
coins were poorly designed and made and so he did what anyone would do at age 19 -- not!
He borrowed $500 from his mother to start a business to design and make really nice
challenge coins.

Fast forward: Jeff has 4,500 customers who bought $2.5 million in challenge coins from him
in 2009 (down slighly from 2008). Along the way, Jeff discovered that he was not really in
the challenge-coin business so much as the commemorative products business. There are tens
of thousands of companies printing collectible t-shirts and similar paraphenalia, of course. So
Jeff realized that if he wanted to expand beyond coins, he had to have some business attribute
that could be leveraged. That turned out to be the ability to turn around orders faster than
competitors."I have focused on systems and programs that take out days of turnaround time
and get it down to 24-hour processing."

With fast production his company's special sauce, Jeff was able to start spin-off companies to
make pins, signs and lanyards. His custom shirts business is about to go live, and next up
after that will be a flower business -- not exactly an under-served market. "We will be able to
process orders within seven to eight hours and with our volume of shipping, our discounts
will be astronomical. We'll be able to do air shipping for the price of ground." Did you hear
that, Jim McCann?

So now that he has a number of similar businesses, what's next? "Creating business synergy,"
he says. "If it costs $100 to gain a new customer, what can you do to expand the margin with
that customer?" Jeff notes. The answer is cross-promotion. It's in the early stages, but Jeff is
noticing that "soccer moms who order trophies also wants shirts and coins made. The military
does end-of-tour awards, and we'll design the coin, and then they'll want a unit t-shirt or
banner made."

It all sounds too easy, doesn't it? OK, here are a few trouble spots and teachable moments.

      Staying Ahead of Competition. "Our competitors have gained an advantage with in-
       house graphic designers, who are not cheap, especially for coins. In the next six
       months we'll bring design in-house so we can turn out art in 24 hours. Right now we
       use our factory's art department, which does a good job but takes 72 hours."
      Managing Infrastructure. "I am personally getting spread too thin. I need to take a
       step back and put some trust into someone else running some aspects of the business.
       I'm going to try to slow down after we get shirts and flowers up and running," Jeff
       says. His staff ranges from 15 to 20 including part-timers. He has an operations
       manager and then individual brand/product managers for each line of business, which
       leaves him with too much on his plate. That includes managing their $1 million a year
       in advertising spending on Google AdWords. While Google devotes a team of three
       people to helping Jeff's companies optimize their ad results, this is certainly a big
       responsibility for the CEO.
      Managing Employees. Hiring the right people is essential, as is making sure you
       don't succumb to the Peter Principle with existing employees. "Don't hire people
       because they're friends or have beern there since Day One. We put someone in
       management who should never have been there."
      Avoiding Distractions. It's important to stay focused on your original concept and
       follow it through to a successful model. It's too easy to get distracted by new ideas.
       Focus on your main idea until it's successful." (Want the opposite view on this issue
       from another entrepreneur? Click here.)
      Don't Underestimate Yourself. "I didn't take certain things seriously at first, like
       bookkeeping or accounting," Jeff says. "We had to spend countless hours fixing and
       reconciling things once we were successful. Make sure you do the things that really
       are going to matter correctly from the get-go."
      You Can Bootstrap Your Way to Millions. Aside from a $500 loan from mom, Jeff
       has taken no other outside capital and has invested 70% of the profits back into the
       company. He is the sole shareholder. While that's not the right choice for every small
       business, and poses the risk of lack of diversification, it's a conscious choice that
       many entrepreneurs have taken successfully. Being self-funded has the advantage of
       eliminating the distraction of securing outside capital, which can be nearly a full-time
       job for a CEO, especially nowadays with credit as tight as it is.

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posted:4/12/2012
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