Patrick Coughlin is experiencing firsthand the same challenges many online entrepreneurs face: It’s hard to build a successful online business.
Coughlin has owned a successful brick-and-mortar jewelry store in St. Clair, Mich., for 15 years. That business had grown to fill a 3,000-square-foot showroom in an idyllic community of about 6,000 people north of Detroit. Due to the increased demand for manufacturing and custom designs, American Diamond Importers is now developing plans for its next store, a 6,000-square-foot, state-of-the-art facility. In short, Coughlin is no rookie when it comes to operating a successful business.
That doesn’t mean he hasn’t encountered hurdles with the establishment of his new online operation. In 2006, Coughlin won an eBay contest to launch a ProStore. By mid-August, his online store was open for business.
Practical eCommerce has followed Coughlin’s progress for the past seven months to chronicle the triumphs and struggles that accompany the launch of an ecommerce site. To Coughlin’s credit, he’s made good on his promise to be candid and transparent throughout the process — even when the going has been tough. I have a lot of respect for what American Diamond Importers has done.
First, to launch or expand a business takes guts. As great leaders do, Coughlin established an ambitious goal of generating $1 million from the online venture in the first 12 months. When we first published Coughlin’s intentions, some people probably laughed. Some probably thought it was wildly unreasonable. As it turns out, Americandiamondimporters.com will not hit that goal this year. However, I admire business owners willing to make a risky leap to grab the proverbial brass ring.
Second, Coughlin could have been content to operate his successful brick-and-mortar business and never expand. Many business owners find a comfort zone or become complacent; growth no longer interests them. Coughlin’s efforts affirm there are grand possibilities in the online marketplace. He was willing to forgo comfort for a chance to accomplish the extraordinary.
Third, he knew it would take a team to build an online operation, and he wasn’t afraid to invest the money required. His brick-and-mortar operation employed 12 people — a sizable operation by any standard. With the launch of his online business, Coughlin added six staff members just to attend to the new venture. That’s a hefty amount of payroll costs to absorb on top of the $100,000 he allotted to promote the online endeavor. Some people may think that level of initial staffing was a heavy dose of tomfoolery, but Coughlin must be given credit for a whole-hearted commitment to a new venture.
Fourth, he’s been candid about his learning curve. Though he’s run a successful business for years, he’s had to face new challenges unique to the online world. He’s faced issues with credit-card fraud, site design, conversion, pay-per-click keywords and deciphering analytic data — just like every new online merchant. And as is the case for most merchants, his education has come through trial by fire. I suspect every online business owner who survived the first year will admit he/she wasn’t fully prepared for the roughest spots.
Fifth, Coughlin has traveled this road — filled with highs and lows — with a reporter asking a host of questions. “How much money are you generating?” “How much do your keywords cost you?” “How much money did you lose to credit card fraud?” “What’s your conversion rate?” and “What were you thinking?”
Year one been an education for Coughlin; his willingness to have a transparent experience has transformed his travails into an education for other up-and-coming online entrepreneurs.
Finally, Coughlin’s done it with a smile. Even when we discussed the most frustrating topics, I knew he was still enjoying himself. His staff told me the same thing: Nothing gets him down. He’s been unafraid to admit mistakes, and he’s never lost focus. Perhaps those are the quintessential traits of a successful small business owner — one who can be a pragmatist and an idealist, a skeptic and an optimist, a dissenter and an evangelist.