Quote:
Originally Posted by lagcam
Will makes some very good points about the obstacles facing a new site, but the reality is that the single biggest problem a new or growing website will encounter will be the working capital requirement.
On average, I have physically received into my accounts the revenue from only 2 or 3 of the 15 or 16 days in the period before I have to pay them out which means that the better we do, the more I have to fund from my reserves.
Now I know somebody (probably Mitch) will reply that the answer to that is simple. Get a merchant account with daily payouts, but that is not always as easy to do as it is to say when you are neither a US National or based in US.
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Yeap, that's once you actually launched the site and are seeing success... I guess I left that part out because most people don't make it that far
and have so many hurdles before that they need to get past. It would be a "good" bad problem. If that happens then at least you know you have made it and are making money, at worst someone would just have to go back to their investor, show them sales and success and ask for more money to cover the short fall to carry them to the next processor payment. But i agree it is something you need to include in the budget from day one.
The working capital problem gets compounded 1000x more if someone wants to offer an affiliate program that pays PPS for a cam site. They would need a huge amount of money to float that plus working capital.