Nearly a year ago, I left the corporate world to become a full time domain investor. I didn’t really know much about running my own business in a full-time capacity, but the time was right, and I’ve never looked back nor have I regretted my decision. I’ve been fortunate to make some good business decisions and have had many more good days than bad. While being an independent domain investor may look like the perfect lifestyle, there are many things to consider before committing to it.
If you aspire to become a full time domain investor and/or developer, there are some things you need to take into consideration before making the jump:
- Health insurance is expensive
- If you make $100,000 profit on a $150,000 sale, you will owe something in the ballpark of $35,000 in taxes. If you reinvest $125,000 of that sale, you are in the hole $10,000.
- Paying estimated taxes 4x per year can be a burden and require you to pay upfront based on your prior year’s earnings
- Working alone all day without office mates or cubicle buddies can be lonely
- There aren’t many people who can give you completely unbiased advice.
- Every domain you buy (especially for a large sum of money) can materially impact your business
- You always need to keep cash in reserve for unexpected expenses or domain names that become available to buy for a good price
- It’s important to consider business insurance (which is expensive)
- Development takes time and costs a lot
- There will always be issues and problems when you develop. Expect to have unexpected added costs and time issues
- It’s important to have a good family and friend support network to help you up when you are down and to help you celebrate when you have success
- You will frequently want to talk about your business with your friends since you can’t chat much with co-workers, but your friends won’t always want to talk about domains with you
- It’s important to stay humble. You might make a $100,000 sale one day, but make an unwise investment the next day.
I have truly enjoyed the year so far, and I am glad to be attending another TRAFFIC show. There is still money to be made in the domain industry, but it does take quite a bit of work. Although I don’t work constantly from 8am-11pm, I am on my computer most of the day. I love what I do, but I’ve learned a lot of things about the industry this past year and about myself. I don’t think there is anything I would change.
I think you hinted to this but going full time domaining, also means that if you Don’t make any money, you don’t get a pay check 😉 That’s with any business owner, but now you REALLY have to “earn” your paycheck.
Just wondering what health insurance for a 36year old male no smoker will be. Any ideas?
And for those of you who are moonlighting, here’s an appropriate article:
Here in Maryland, I pay about $1,500 a month for health coverage for myself and the family. Ouch.
Great read, everything you said is 100% true.
Most of these young people trying to become domainers or business owners period do not understand what is including in running your own company.
Being a “one man show” entrepreneur is very challenging and you have to have a lot of skill sets to achieve success.
The thing you need to learn to deal with is most ventures you develop or go into will not turn out as expected and you’ll lose money. If you can hit gold on 1 out of 10 though that’s all you need, since you’ll usually be doing ultra high payout potential deals. So the 1 winner deal will cover all your losses on the 9 losers and you’ll still be profitable.
To cure the isolation and loneliness get a dog. My German Shepherd sleeps next to my desk all day to keep me company. LOL And when I take a break I take him for a walk which is very refreshing.
It’s also very important to get out of your chair every 30 mins so you don’t develop blood clots in your lower legs from sitting on the PC all day or carpel tunnel syndrome from using the mouse all day.
Thanks for the advice. I haven’t reached that point yet but here are just some of my thoughts.
Domaining is an exciting business. Personally I think that there are many domainers out there who would like to make that step to full time domaining and leaving there current job. The link to the CNN article provides some good considerations, thanks for that one.
The big question is: at what point do you make that step to full time domaining ? Everyone has to decide that for him/herself but as an indication would a steady stream of revenue over a longer period be the guideline? In the mean time, working parttime with sufficient time for domaining when at home or domaining during your employer time when approved would be a good solution. It just takes a lot of study before reaching that point but once there all the effort will be very rewarding i’m sure.
i would love to do domaining full time. its just that its a difficult one. have to pay for bills, mortgafe and food. if its gets dificult where will the money come from. but i appriciate those who have managed to do it.
I have been domaining for about six months but did work as a developer from home for 2 years. it can get very isolated and you made a good point when saying your friends do not always want to chat about what’s going on with your business. I’ve been a developer FT in the day and do domaining in my freetime, it is hard to watch all the auctions not doing it FT though.
Excellent post… Would love to chat sometime… Have been domaining for last four years.
Some very good point there..!
My advice to those who only work from their home office and “sit home all day” would be to check out what you need to pay to rent some “real” office space. These days you can probably get a good deal on some form of shared office, where you get your own office but share other facilities with other (small) businesses; such as a meeting room, printers, coffe makers and so on.
In my opinion getting a real office will often pay for itself; you’ll have other people around to talk to (often others involved in start-ups), and you get to actually “go to work” every day – making it easier to focus on work. Also, you’ll be able to meet with clients and partners in more representable surroundings, and probably get more self respect 🙂
A bold move and you have pinpointed the many issues of being a domain investor. I have found working out at a gym prepares me for each day. Question is now for us domain investors; with the current financial crisis, what impact will it have on the domain industry and future sales of domain?
Great article! I need to learn quite a bit more about development before I would be ready for such a move. I have some great generic Spanish domains (and a few English ones too) but it’s nice to have that regular paycheck. PPC doesn’t pay the bills!
I would be curious as to strategies to reaching out to end users. It seems cold calling companies is likely to be a waste of time. I can imagine an outsider trying to sell the generic domain for my employer’s business. I have an idea of where to start but don’t really know who would be authorized to approve such a purchase.
Try being in the real estate business and make yourself get out and work everyday. Fill up your truck with 30 gallons of gas every three to four days at $4.00 a gallon with no phone calls or contacts. I have wondered what a regular paycheck is like for over 40 years. Sometimes it is just plain hard to make it all work, but working for yourself is enjoyable and worth the time and energy. You come and go when you want to, but you also have to work long hours.
It is always enjoyable to see a few dollars from PPC on one of your websites. When you have regular PPC income over a few weeks it makes you think of what could happen …
I would suggest a coffee shop for a few hours in the morning or lunch out for a few hours at a restaurant that has wi-fi. Move around to a few different locations for coffee or lunch.
Enjoy life as being free from a regular 8-5 job. I think some people call this being retired.
Well I would say that you have done a fine job in your first year. We’ve all watched and seen you grow over the past year, as well as experience the same mistakes that we all have made in this business. You’re headed in the right direction and helping us all to get there also. Health insurance is expensive, but if you are in good health with no major issues you can find some out there. Now if you have a family, get ready to pay out for sure, so you might have to use your spouse’s health coverage if you have a family. Keeping extra money around for the things that are going to happen to you is great advice, but at the end of the day it doesn’t matter how you suceed during the good times. It’s only during the down days that you really see if you have what it takes. Then after you have gotten through a couple of those you can at least say you are experienced! Thanks for everything and keep it up!