Penny,auctions,planning,issue, ecommerce Penny auctions planning issue that can ruin any strategy

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Making the decision to start your own business and dedicatea lot of your time to try to grow and push forward a certain idea is certainlya big decision for any one. But as with any ongoing process the time you spendon preparation is somewhat underestimated.    If you start building a house and choose all the wrong materials it doesn'tmatter how hard you work and what building methods you use the house won'tstand for long. With online business and Penny auction sites for that matterthe situation is roughly similar; if you make even a single wrong choice whenplanning your future venture, sooner or later your past errors will crawl outfrom under the surface and back fire where it hurts the most.   Before I start to plan for anything I liketo open my Murphy's law spreadsheet and meditate on it for few minutes beforemaking any corner stone decisions that will form the frame work of my futureplan (it doesn't matter is it a business plan Im working on or a road trip justa useful habit I worked out)   But I'mgetting a little bit sidetracked. Now all of the above might seem like obviousthings but let's consider the dangers of taking shortcuts in planning and harshdecision making when it comes to high risk online businesses like casual gamingor in our case penny auction sites when regarding two effective businessdevelopment models.  The two mainapproaches a lot of entrepreneurs use are largely defined by the size of theproject being launched but not always , everyone has an individual system ofmarkers he uses when deciding to apply one method over the other.   Let's call the first method "aggressivedevelopment"  The point is to buildyour sites online influence as fast as possible and ride out the momentum toreach even more costumers. The initial thought here is to achieve a reactionwhere people will think "there's a lot of people here must be worthwhile" if you manage to catch and navigate the initial buzz you can quicklybuild a developing client base that you can nurture later on. This strategyhowever dose requires a significant promotional budget. Not only will you haveto organize a good advertisement campaign that will reach far and wide in toyour target group but you'll also need to list impressive prizes on your siteas your start up auction items. Expensive electronic goods like wide screen TVsand high performance computers, and other popular luxury items. In other wordsanything that will astonish your visitors when they land on your site via theadvertisement campaign. Keep in mind that the demand might be higher than yoursupply and soon you might need to run as many as 20 live auctions per day tosustain the user's interest.     Thesecond method is slower in development and building up a client base so we'llcall the "a step by step approach"   This method is less demanding towards your advertisement expenses howeverit is more demanding in terms of paying closer attention to details, andlargely benefits from a more personal touch. Try to narrow down your targetgroup as best as you can. Find a way to address them personally on a popularforum or a portal they all visit, and offer prizes unique to the niche andpeople are pensioned about. There's no need to run 20 or even 10 live auctionsa day when using this approach at least not while your project is stillgrowing. The amount of auction events you should be able to run profitably issomewhere from 2 per day to 2-4 per week depending on your audience activity.Costumers like these brand new penny auction sites as they feel more connectedwith the owner not to mention that the competition is less aggressive andthere's more chances to win. It's important to provide outstanding customersupport and keep your clients as happy as possible. You should view everyclient as a potential source of good feedback and honest advertisement as wordof mouth will be your strongest tool when developing your business.    Now both strategies are valid and have atlarge have a common goal - build a client base to make the auction siteprofitable. So where can things go wrong? You have to remember that when running a internet business you don'thave a physical channel of communicating with your clients or conductingbusiness like a store or a kiosk or anything of the sort. You fully relay onthe tools that allow you to sustain an effective and functional presenceonline. If your site goes offline you immediately start to lose money.  Now when you're starting a penny auction sitethere are two big components that you have to decide on when planning yourproject. A server host and penny auction software. And if it's always possibleto change your hosting provider later on, switching the software platform ispractically impossible. So when you decide what software pack you'll use topower and shape your site you need to be absolutely sure it won't let you down.   Just remember that even a badly coded scriptcan run well on a powerful server with just a small amount of visitors but whenthe site begins to hit its first waves of increased traffic it can easily fallapart as result immediately bringing down your site along with your hopes onsuccess.   When we apply this to the twostrategies we described earlier we'll get the following.  "Aggressive development" Afterspending a large amount of money on advertisement and active marketing, as wellas expensive prizes if you made a bad choice of penny auction software tooperate your project you're site will immediately go down as you hit your firstbig wave of paying clients resulting in significant revenue losses and probablythe fast declaim of your venture. Less chances to see your ROI period    "A step by step approach" It getseven nastier in this case. Since you start of slow it's often harder to predicthow your site will behave under larger amounts of traffic might even happenthat you won't see any trouble before it happens. But when finally all of yourdedication and hard work begin to payoff in the form of converting traffic youstart hitting trouble. Timer lag, accounts going down or the site justcrashing. With trouble like that no amount of pre-existing word of mouth willbe able to save you. And even after you realized your mistake and went out ofyour way to get a new software platform to replace the old one there is noguarantee that you won't have to start from scratch.   By no means is this mean that you don'thave to start a penny auction site or that any project doomed to fail sooner orlater. The point is simply this - don't take preparation lightly. Take yourtime and plan ahead. Evaluate the details correctly. For instance are you surethat an $800 script is enough to sustain a website with a turnover of over 20000 a day? It's a complex product that you have to put your trust in, and thennothing will hold you back.