Investing 2 million USD in starting a lead generation business – please advice

Hi everyone. First of all I want to thank you all for you great contributions to this forum. I myself am a long time lurker, but this is my debut as a poster. From reading this forum I’ve found that there are some really informed people here so I wanted to get your feedback on these startup plans that I am working on.

I have 2 million USD that I want to invest in establishing a successful online lead generation business. I have yet to decide on which segment I will be focusing on and that is, among other things, what I what your feedback on.

My plan is this:

I will decide on a premium segment (currently I am considering education, credit cards or insurance) and buy a “underdeveloped” 5-6 page rank site. By underdeveloped I mean that the site is not optimal as regards to quality of content and SEO. I will then invest a considerable amount in remodeling the site to provide a true value to visitors. After that I plan on starting an intensive promotion campaign, doing link exchange, directory submissions (DMOZ), payed backlinks, forum posts and payed blog reviews to increase the sites rankings in Google. Also, I will try to advertise the site using PPC. My hope is to be able to buy my way into the top rankings in the serps by buying a good domain and then giving it some more love then the previous owner did.

I would love to get your feedback on what you think of my plans. I am especially uncertain of these things:

- Will a PR6 mean that it will be easy to SEO the site even if it doesn’t get much traffic currently (the reason is the poor keyword relevance of the content)?

- What segment do you advice that I focus my attention to? I’m open to any suggestions at this point but how can I find out what conversions to expect?

- How can I get numbers to calculate the value of the domains I buy? How much is a visitor worth? What kind of domain would you say is worth 20.000 USD?

- Do you think it’s possible to establish a successful business with 2 millions or do I need more capital to break into the first page in a premium segment?

I would be very thankful for any feedback as this is a very big investment and I feel that I might be going into deep water.

 

I think you are crazy to spent $2 million on something like this. If you do things intelligently, you shouldn't need more than $5000 (especially if you will not be doing a huge amount of PPC advertising) at first. You can then reinvest revenue into further development, but starting with $2 million in capital is ridiculous...

 

Don't, I mean DON'T do it.

Invest a maximum of $50,000 (Because that's MUCH)

SEO, Content, Links, etc..

 

Based on what you have said I don't see how your costs will be anywhere near 2 million bucks. Maybe $1,000 if you really push it and go wild. My advice is save your money.

 

If you have that much .... get a pro consultant instead of asking here(free forum)

 

Thank you for you comments.

Investing 50.000 would not be interesting to me because I want to build something big. I have heard from good sources that domr poker sites makes up to 20 million USD per year. Now poker might be a highly lucrative segment but I belive that a lot of money can be made in other segment like insurance, mortgage loans, creditcards etc. To be able to make this kind of money one has to get to the top 5 in Google and have a very good content. That's what I'm looking to do.

If you think that its possible to wind up on the top 5 position in Google for the keywords mortgage loan or creditcards for only 50.000, please explain how you would go about it.

 

3) generally a site is worth 1-2 years worth of it's potential net earnings.

4) absolutely you can, many do it with less than $10 a month. With that amount of investment you can outsource thousands of hours of quality work for your site (competition is fierce in e-commerce usually, you can get some high quality content made w/o huge investments) & you would still have plenty leftover. But even with 2 mil websites follow the 6 month rule, where a site really doesn't have an opportunity for high SEO potential until its been up for at least 6 months, this rule's even longer for forums.

The other questions I'm not knowledgeable about sorry.

This might be an option but I bet the information you can find on here can be just as informative.

I'm a bit of a newb so take my advice with a grain of salt Hey if you ever need some help, advice or anything let me know. I'm certain I could help you reach positive net earnings from that kind of investment on the internet.

 

Well thats a bit more than most people have to start with but Id give you the same advice: put your money away an spend 6 months learning the business. Othewise you are giong to be taken to the cleaners. Apparently poker does make a lot money - but you know that poker sites are illegal in the US? I would think there is serious money in porn too. And you have heard of diversification haven't you : I wouldnt stick with one site or even one niche

 

Ya If you are thinking of dropping 2 million on something and you are asking for the advise of people on DP who really barley know your situation your nuts. But on a great track to loosing 2 million.

 

Agreeing with the sentiment here; I would know a great many things to make 2 million $ in a lot more, but this certainly isn't one of them. I mean ; with a fraction of that you can do great things, with a large part of it you can do really big things, but this looks like you just want to get rid of it...

 

Hi Domainsguy,
This is a good thinking, you get a good "product" you should invest (time, money and resources).

My advice is, when start a big project (and yeah, 2 million should be very big project), you should have some one for SEO methods including all from all.

There are a lot of projects you could build with 2 million and even with half of that, if you are serious leave me a PM I might have some thing for you.

 

With that kind of money you could hire the best in SEO, content creation and server managment, but you'll also be risking wasting it all. As has been said, I could imagine building a site like the one you envision for a fraction of the cost.

 

Money is a relative stuff. $2 million might be too big for a simple blog or ebook site or web hosting but very less if the OP wants to create a search engine to compete google.
Your Aim shouldn't be too invest $2 million, but an idea of something that provides value to people, which you believe would be the next big thing on the internet, or atleast something that can bring double your investment and keep growing as time goes.
First thing is that you create a plan, next think of the people you need to make it work, say Web developers, Seo analyst, ppc experts etc and then after consulting them take a cost estimation of the project and then invest.

Hope that helped, if you need any help this forum is a great source for finding tons of stuff, or you can pm me.

Tip: Go for freelancers, rather than big companies it will save you a lot of bucks.

 

how about you spend $5000 on the project and give the remaining 1,995,000 to us at dp!

 

That's a bad gamble man.... Over the years we never spent more than $200,000 to launch a site, and that included R&D, Launch and run a site for one or two years, and 4 employees running the company. That said... One of our first sites was lead gen biz, and it did not take us anything close to that.. Back then we probably did 1k to start one, but now of days 50k to maybe 100k should cover the bet with a good launch.

At 100k down, with 30% return over a two year profit point, you would need to grow by something like $7,000 each month for 24 months.

On the other hand if you wanted to buy an undervalued biz your going to have to find one that has the ROI percent that you need to make it worth it, and frankly there are not that many sitting around that are worth that probably.

Why not just invest in 20+ online businesses? Then your rate of success is better and you dont have to run them. Just don't invest in crackheads that cant get the attorney to review and edit the NDA, LOI, Contract, etc.

 

Do you mean your 2 million is venture capital ?
That is a large amount of money.
Come to my country.
Guranteen 30% to 100% profit growth each year.

 

Welcome to the forum as a registered newbie instead of a lurker

If you truly have this amount of money available to invest in the web then I would advise you to use it carefully. Buying an established web site and throwing a ton of money at it is not a sound business plan and will get you nowhere except poorer.

Your promotion campaign would need serious work.... link exchanges don't work, paid links will get you banned if you don't know what your doing, forum posts are overated and paid blog reviews don't work. Directory submissions are incredibly slow and their current value at the present time is hard to gauge.

If you want to buy your way to the top of the SERPS for your chosen segment you will need to come up with a better more sustainable plan. Getting to the top is the first task... but staying there....

I wouldn't base any purchase on the PR of a web site as it is really of little value other than if you want to sell links which will ultimately loose you the PR anyway. High PR in my opinion doesn't guarantee top rankings, I have seen many low PR sites taking top spots for difficult search terms.

I'm not going to tell you what segment to enter into as it comes down to a number of factors, all I would say is research heavily before making a decision.

Watch the market, look at past auctions to determine value of domain names. If you are buying an existing web site I would only base the purchase on a multiple of it's current revenue and factor in the potential growth to determine if it is worth a higher investment to BIN a site.

Premium segments can be tough to break into, but if you build up the right team around you I think it could be done for a quarter of that.

I agree you are going into very deep water. If you are serious about your investment and actually have the funds to do it then I would think very carefully before comitting yourself to anything.

 

lol my guess is 50k MAXIMUM!

 

Its very possible.

 

Anyone who has that much money should be fairly smart. The fact that you would even ask for advice on something like that here means you are stupid. Therefore I think you're lying about the whole thing. Stop wasting everyone's time.