Top Ten Tips for Starting a Second Life Business

I seem to have developed a rather successful Second Life business, and I am often asked how I did it. There's no magic to it, you just have to do the basics of any start up business and follow common sense. Here's ten tips that might get you started on the way to your first million Linden $!

1. Pick the right type of business. There are limitless possibilities for Second Life businesses, but you should pick something that fits the following: You must be reasonably familiar with the area or topic; You must be sufficiently skilled to do the necessary work, which might include leadership, social, artistic or technical skills; There shouldn't be too much existing competition, especially large and mature competition; Most critically you must have sufficient time to do the work. Don't pick a labor-intensive business model when you have only a few hours per week available to do it
2. Know your customers. To whom are you selling? Is it everyone? Is it a particular Second Life species or group, such as Furries, Japanese, Builders or Club Owners? You must know exactly who they are because all of your subsequent actions - advertising, branding, product types and even product names - must be engineered towards their peculiarities and characteristics
3. Know what your customers need. If you talk to and observe avatars, your close attention will reveal the kinds of things they want. If you understand your customers very well, you may even be able to develop products they need even if they haven't specifically asked for it. Identify a problem they have and solve it! Answer their question, "If only I had...." This is why you should select a customer niche; you cannot listen to everyone to solve all problems
4. Forecast your finances. All too often I find someone setting up an entire sim with a business even before they have a single customer. What are your monthly expenses? Consider not only tier/rent, but also advertising fees. How much revenue will you make? Divide your known monthly expenses by the average price of your products and you'll know how many products you must sell each month to break even. Estimate how many visitors you need to generate that number of sales – and not every visitor will buy something. What's that? You need more customers than you can reasonably attract? In that case increase your prices or reduce your expenses. Business success is often just simple arithmetic
5. Grow slowly. Match your expenses to your revenue over time. In other words, start small and expand when you feel you have enough revenue to pay for increased expenses. That way it's not likely you will lose money. If your revenue doesn't grow, why would you expand? Worse, if you started out too big, you get the same result as if you expanded too rapidly, just a lot sooner
6. Make it easy to buy. You've got visitors in your store, but can they actually purchase your items? Are they visible, findable, understandable? What information do you provide customers from which they decide whether to purchase? Just a product name? A picture? A demonstration? Can they try out your product? Or is it just a colored box? Would you buy if you were a customer?
7. Experiment! Second Life makes it easy to try different approaches. Mix up your products, advertising and store structure from time to time. Not a lot, but do try different things. Then, do more of the things that do work and don't do the things that do not work! Over time your operation cannot do anything but improve
8. Promote your business. No one will buy from you if they cannot find your store. You MUST advertise. Where you advertise depends on the nature of your business, but you must find the right places to promote your products. Don't be afraid to try different and multiple approaches (See "Experiment")
9. Provide great customer service. No one likes an abusive store clerk, so don't be one! Give people refunds if they genuinely have problems. Help them use your products. Ask them if it worked. Give out some freebies now and then, especially to faithful customers. Follow up with them later to ensure they are still satisfied. While this may seem like work for nothing, it is simply the best way to promote your business: word of mouth rules in Second Life
10. Ignore your competition. Avatars can TP to anywhere instantly. Therefore, there is little geographic advantage that you see in RL. Your only hope is to produce new and unique products. How can you do this? By ignoring your competition. If you see what others are doing, you will tend to copy/duplicate/emulate what they are doing. They will be unique and you will not. Have faith in yourself and always do your best

Running a Second Life business is very similar to running a RL business, so many business principles still apply. You can get a lot of excellent ideas simply by reading some business books.

Above all, remember that your business should be addressing the needs of the immersionists. Don't know what that is? Read this!