Outlook for SL businesses in 2008

Do you run a business in SL? What's the outlook for 2008, will it be a good year, are you girding your loins and getting ready to get your creative juices flowing to make something new? What are going to be the opportunities and pitfalls for SL businesses in 2008 and what do you plan to do about them? .... or maybe you are just planning to have fun?

SL is strictly about recreation for me. A category that running a business is not in.

I have a business, and I think the pitfalls will be *if* LL decide to scrap the tab searches, Places and Classifieds, and just keep the new All search. That will favour a few businesses but will be very bad for businesses in general.

The land rental business is the strongest it's been since I got into it. So I plan to continue to be a crabby landlord.

I'm planning on having some fun by learning to make new items. I'd like to offer more of a variety of items, while still keeping prices low. We've picked up more land and the expansion of the store has begun.

The downturn in the US economy I think will be a challenge - with the VAT thing turning a lot of Europeans off already, if the US economy goes any further downhill, I think we'll see a much greater decline in people spending money in SL.

Not sure yet what the new search will bring - I'll just try to figure it out as I go along and be flexible. So far it hasn't seemed to hurt me.

I just read Raymond's response - if business at the store tanks, I suppose we could always rent out the extra land - it's protected waterfront, so that should help.

create a new business early 2008 when the first product is out and cross my fingers it`s what my target audience buy and use as to the feedbacks that i got for it

I'm an authorized reseller of the UK Couture, KA Designs, Wrong and Reaction clothing lines, plus I'm working on developing my own line of shoes. So my focus will be on the shoes...for the rest of it, I'm at the mercy of the designers

It's been tough. I've only been really open at my current location since October, and getting the word out there during the implementation of the new search has been difficult at best. I'm in a great location, but because I have so much land, it's fairly pricey (not because of the price of the land, but because I'm a prim hog), so if things don't pick up soon...I may have to think about shutting down

I'm thinking about buying an island. Would this be a good move?

I said "diversify" only because I'm going to be adding new lines to my current business; for me, "diversify" applies only to the one business, not to multiple businesses (aka, land, sales, etc)

I'd have to echo Johan's question, having noticed many people doing the same thing in the past year or so.

I know that some people purchase islands simply to make their business look like it's doing well (when in truth perhaps they are not making profit margins at all). In other cases, the traffic warrants it.

At what point should a business owner purchase a sim in order to help their business do better in Second Life?

I also plan to diversify. I started by creating and making furniture and items that I personally like even though there's already a lot of competition out there for similar items. Business has been good, but I've gotten a lot of feedback from what people have said they are having a hard time finding. While I originally said I'm not in it for the money, I'm finding the business aspect to be a lot more fun than I expected. To me there is a gaming aspect to running the business that I am enjoying very much.

I didn't vote diversify, though, because I consider it part of the same business.

I dont currently have a business, but the dream of building one in 2008. Lets hope for a good year!

I've run a pretty good business in 2007.

But as i'm in a market which is either highly competitive (prefabs), and/or requires a lot of customer service (complex scripted items), I haven't been able to be as creative or productive (or socially active) as I have been in the years before.

So, as a personal choice, I'll concentrate less on business and more on creating new and exciting items next year. Whether these will sell as well, is of lesser importance to me.

On buying an island:

My experience with buying an island as a business outlet have been quite positive. But it wasn't the main reason I bought one. My main reason was to be able to create a unique environment, and to never having to worry about prim limits or space limits while creating.

From a business perspective, only buy an island when your profits are already significantly higher than island tier costs. Don't expect an island to automatically boost sales.

Also make sure you have a need for the prims/space. If you sell prefabs (like me) an island can be a good choice, as it allows you to demo a lot of models full size.
If you run a clothes store, with a limited amount of items, you don't need an island. I suggest only buy an island with a group of like minded business entrepreneurs in that case, and share the advantages of unified marketing, sales and events platform etc.
An island in this case allows you to reduce rental costs, have a clear and integrated overall look, and allows easier control/management.

Purchasing a sim is only a help if you *absolutely* have to get one.

I can see the move for texture stores, land barons (obviously) or any neighbour-impacting situations, but the ideal business is run out of one free prim - at least theoretically.

No good reason to spend 5000 bucks in a year? Then don't get a sim... simple as that. Not many businesses need 15,000 prims to function well.

* * * * *

Outlook for 2008 - well, my call on it is prolly: 'stable'.

Which may sound bad. But when you consider we are coming off a hype-inspired, gambling-dazzled economy into an actual use-inspired, true-interest in virtual worlds economy, that's a good thing.

Slow and steady wins the race, educates users, and flushes out all the speculative hype.

I'd rather be almost any stable company during nowadays, rather than AOL-TimeWarner in the late '90's no matter how good it sounded then.

I certainly don't need the prims (my store is like 300 prims, including landscaping) but I am concerned about lag. I want to give my customers the best shopping experience possible.

I'm probably going to narrow my focus, business wise. My business has been pretty much whatever caught my eye. If I wanted something, I learned how to make it, then put it up for sale. With the exception of men's uniforms, there isn't a product on my shelves I haven't used on a moderately regular basis (at least until the Next Big Project).

But at just over a "year old", there are some products that make a fair amount of Real Life income. Nothing that would allow me to quit my day job, but enough to justify spending a bit more time perfecting and shilling them. So, for me, I will be moving from being jack of all trades and master of none to concentrating on a few products (probably the horses and carriages).

Then again, perhaps I am simply talking bravely--I might not have the willpower NOT to develop new interests.

I'm "hoping" to incorporate and bring on subcontractors under my umbrella of contracts i receive. The end of the year was krazee projects and i had usually taken them on single handed.

I was forced to gather friends and pay them a portion of my profit to make sure the Job was done correctly.

I've not been able to master sculpties yet and have someone quite reliable for that. Am looking for a Texturer who "gets me" and a scripter who's not running their own buisness.(or if they are they can place me on the front burner from time to time.)

I've had a few offer of builders to join with me but I would have to know someones work pretty intimately and trust them and their talent to contribute to my vision.

On the other hand..reinvesting profit into a good sculpty program and spending this winter "learning" rather than working might be the better alternative.

Ultimately i want to be more self sufficient as a designer in SL

~Lana Tomba

There is the other side of purchasing a sim, and that is those business people who are successful enough to buy a sim for their business, use a small portion of it for the actual business, and the rest is dedicated to content provided for the casual user to enjoy.

To have full control of the environment a private sim is the best way to go, and could become crucial depending on how the new search feature pans out.

But the main thing (for most people) will be the numbers - i.e. can you afford it? If your store makes $300 US a month and you pay $20 US a month in tier fees, then that is $280 US profit per month - if you buy a sim ($1675 up front cost plus $295 per month), and you do not make any more income, then it will take you thirty years to recover the cost of the sim.

15,000 prims, a minimum of USD$295 a month (unless you get a grandfathered sim), a purchase price of USD$1675 (unless you get a second hand one) and LL dithering over tier pricing, a sim of your own doesn't look an attractive proposition to me.

Even if you're turning over a healthy profit that covers those costs, it's a big investment. If the platform were more trustworthy some like minded business owners could get together and share the costs of a whole sim, alas the trust issue is a big barrier to this.

I have three businesses now. Fox and Ground Construction co. - which makes sims and other builds for hire; My texture sales, at Textures-R-Us (TRU); and my other stuff at Ceera's Creations, where I sell clothing, furniture, and avatar eyes.

I am quite certain that both Fox and Ground and my efforts at TRU will expand over the next year. Both are booming, with more work offers than I have time to do. I'll probably add staff at Fox and Ground this year, or team up with some other experienced builders to expand the volume of work my company can do.

Not so sure about Ceera's Creations. I have one store of my own and two mall locations, and together they barely break even. Most of that is because I am not producing enough new inventory for those stores nor am I doing more than nominal advertising for them. This year I will ether put in more effort on those stores, and make them seriously profitable, or set aside my sentimentality over my 'first business efforts' and focus on the other two businesses that are thriving.

With 67 votes cast, it appears that 90 per cent of Forum readers have an ongoing interest in SL businesses, the majority already own one and intend to develop it.

I only make this point so that any readers might take note that the Forums clearly do represent the voice of the SL business community, and therefore do have an interest in how things like search develop, and how performance in SL is improved, as it affects their businesses.

Everybody has an interest in SL business, even those who only socialise here or those who don't fear the reaper at the mention of the word "socialism".

I fully agree with Damanios on buying an island. Unless you can really utilize the space and prims, it is a waste. I've seen a bunch of SL businesses buy islands and stick their store in the center while doing next to nothing with the rest of it. Waste of money.

I will also note that you can indeed develop the rest of the island into an attraction, just keep in mind the sheer amount of time it takes to build out an entire sim.

I would recommend that Johan look for 1/4 of an island sim to rent from someone stable and highly reputable. Especially look for one that isn't bordered by other sims on the sides - those will be the lowest lag. This gives you all the benefits of having an island without the hardware upfront cost and the pressure of having to make that $295 tier every month.

Now, if the SL business is making enough to cover $295 tier on it's own but doesn't really need the space or prims, you could also divide it up into 4 quarters and rent out to other businesses.....

Thanks for the advise guys, this really clarifies things in my mind. I'm still not sure if I will get an island, but this has been helpful. I think Kenbro's post quoted here really connects with me; this is pretty much what I'm already doing with my current land holdings, only it'd be even better with an island.