The Production Triangle

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The production triangle is an important aspect to consider when building a website. It is even more critical when building an internet based business.

The laws of the triangle are seemingly immutable. Like breathing, eating and paying taxes, this is not a law that can be broken.

It works with any production and especially does it apply to building or creating a website. Understanding the triangle can help you to see if building a web based business will be a good fit or not.

The Production Triangle

The law of the Production Triangle is that you can only have two sides of the triangle. The third will always be the opposite value.

So if you want a fast production, it is going to be expensive to make it good or if you go on the cheap, it will be poor and possibly very poor.

If you want a great production, it will be cheap and slow to make or expensive and fast to make.

If you want to keep it cheap, then you can make it fast and it will be poor or you can make it slow to make it good and really slow to make it great.

On the web, slow can mean a couple of years to get to the point where your doing well enough to make an interesting amount of income.

So, if you want a fast high quality product, it will not be cheap. On the other hand, if your a on a tight budget and want high quality, it will not be fast.

The Production Triangle and How to Build a Website

Numerous articles on the web indicate that the minimum time frame for most websites to have enough age to become recognized is about 6 months. Most smaller online businesses find that it takes an average of between one and two years to build up a business sufficient to provide notable income.

Recognizing this fact can help in your web success. If you have $50,000 dollars to have a website built and managed, then you will have a good chance of getting and staying at the top if the same principles of the Five C's are followed.

If you do not have $50,000, then the only option to save a lot of money is to make your site on the cheap. Cheap here does not mean being a skinflint.

It still requires investing in the tools and knowledge base to be able to do it yourself with a little help from experts.

What are your thoughts about money? Do you avoid spending it at all cost? Are you cheap or frugal?

Cheap or Frugal: Which are You?

Some think that they can spend nothing and make everything. They are cheap. That is OK but it is also limiting. This kind of cheap is not the same as on the Production Triangle.

There is a tipping point where the time spent is or is not worth the return on investment. In other words, cheap does not pay.

Additionally the the learning curve can be shortened by education that will require an investment of money (cost of the classes) and time (learning and studying). If one is not ready to invest in these, it can take considerably longer and cost considerably more in the long run.

To be frugal in investing requires becoming an educated consumer.

As an example, after much research, I took an advance class that cost over $2000. (note: you are not ready for such a class if your just getting started. Nobody getting started should pay for advance classes early on until they know what they are getting into and know the basics.) This class paid for its self in just one month and has kept working since.

On the internet, the constant changes make success a moving target. So, at some point, there will be additional expenses, depending on how far you want to grow. Some of these will be for subscriptions for services. Some will be for classes or books. If your just getting started and if your taking the Assist2web class based on the "Building A Successful Business Using the Internet," then you will not need to buy anything else for at least a year if ever. It will depend on where you want to go and what you want to do.

A Case Study and the Production Triangle

What would you do in the following case study? I approached one of my clients and offered to make their website for them for free. All I asked was that I could have 30% of the income I brought to the business for one year. In effect, I would bring $10, 000 a month more into their business and for doing this I would keep three thousand dollars of the 10K that I personally brought in.

Does this seem like a lot. It did to them. They thought that it was way way way too much profit for me. They thought it would be too much to loose. How do you feel? If made such an offer, what would you think?

Actually, on the web, this is a very low commission for a joint venture. Remember, they would pay nothing, there was no risk and if I made no money, I earned no money. This would have been free money.

Additionally the estimated (by an independent source) life time value of each customer is about $300 per year for five years. So one new customer would on the average bring in about $300 per year times about 5 years or $1500.

Suppose I brought in only 100 customers. They would have made about 30,000 in the first year. Now multiply that by five years, the average life of the customer. All I wanted was $10,000. Actually I could have brought them about 300 customers. So I would make 30,000 and they would make 27K of the 90 believed could be brought into their business.

They declined. At this writing (December 2009), I am negotiating with someone else for the same fee. If you would not want to part with 30% thinking you could do it yourself, then go ahead. Remember, the web is a moving target. When you learn how to do it, it will have changed.

In the production triangle, they could have a good amount of customers fast but it would be expensive. However, they chose to be cheap so it will be slow to build a good amount of customers.

I was going to build an expensive fast website to make a good amount of customers. This means paying others to do some of the work to get it done.

On the web, joint ventures often are around the 50% mark. This means for every dollar I bring you, you will give me half or 50 cents. Does that seem like a lot. Does it seem unfair. If so, then the web is not for you.

If, on the other hand you see that you would end up with 50 cents more than you would have if you did not enter the venture, then the web is for you. The difference is that on the web, and once you have a few years experience under your belt, the rewards can be in the thousands of dollars and even tens of thousands for some, and this for just one product launch.

So, if you are cheap as in do not like to part with any money even to make money, this is not for you. There is nothing wrong with being so. But building a website will probably not work for you. If on the other hand you are looking for the best value and willing to do some of the work yourself, learn what you do not know and become an educated consumer, then the Do It Yourself route could be the way to for you to attain web success.

One more thing about being cheap when it comes to the Production Triangle.

Some think and even believe the get rich quick and build a website in a night banter that fills the web. Few businesses ever are overnight successes. The guy who made 800K on Ebay and is now selling the book took 12 years to get there. Also, his copy does not say how much he paid to make the 800K but assuming liberally it was half, then he only made 40K a year.

Likewise the guy who I bought the $2000 course from was the first to make over a million in 3 days. He will be the first to tell you that after he paid his affiliates, after he paid $30K in returns (yes, some will want their money back) and over 60K to his secretaries and assistants, he only made about $360K. This in its own seems great. However, it took several years to learn how and even then, several months to build up to that product launch.

So if you want web success, considering the immutable laws of the production triangle, you will have to recognize that it could take an average of two years to make a self sustaining income from your internet based business. Some faster. Some longer. None over night.

If this has not scared you off and if you see where you fit on the production triangle, then you are almost ready for the Assist2web class or the Do It Yourself Website Building process.

To your success on the web, best wishes.

Assist2web.com: The Build a Website / Production Triangle Resource