The following post is a guest contribution from MMD of My Money Design. My Money Design is a blog that is devoted to exploring different ways to generate income in an effort to achieve financial freedom.
There are lots of ways to make money on the Internet. You can sell advertising, you can write for other people, you can sell products, or – you can do nothing! That last one is why I’m obsessed lately with the development of my niche websites.
I like where they’re going because I know that when I look into the future, they are a scalable business model that I can use over and over again to increase my potential income.
What Do You Mean By a Scalable Business Model?
When I first started blogging I was a lot like a lot of you. I used to read the income reports on other websites and get really excited by seeing all the thousands of dollars they were generating! “I can do that”, I thought. And so I tried …
I made a little cash. It was fun and encouraging. But with each dollar I made, I asked myself:
• Was this just luck, or will it happen again?
• How consistently can I continue to make money at this rate?
When I looked six months or five years into the future, I didn’t really feel good about what I knew was the truth. That truth was this:
• You can only sell so much advertising space.
• Based on the metrics of your one website, the price you can command will only be so high.
• If you write for other people, there are only so many hours in a day that you can work.
• There are only so many hours in a day that you can spend doing the necessary steps to build a community blog – writing, posting, linking, engaging, etc.
And then that’s about when I started to discover niche websites.
Trying Something Different
The first time I read about niche websites, I was intrigued. The goal of these sites was what I was hoping to do with my blog but failing to achieve:
• Maximum return for minimum effort.
Now don’t get me wrong. I love writing content and engaging my audience. But I was clearly seeing the limitations of my efforts and ability to achieve success. I needed to try something different and find out what would really work for me.
So was my solution to build another blog and double my potential for income? No way! How could I possibly double my work load and do it all over again for 2 blogs or even 3 blogs?
That’s when I really started to study up on what it takes to build a niche website.
Using Niche Websites to Seek Passive Income
Although it took a little while and a lot of trial and error, I was beginning to see the fruits of my labor pay off. The more I worked at it, traffic increased and revenue went up. And the best part:
• I was working on it less.
In the beginning of this post when I said you “do nothing”, that was a little tongue and cheek. My first niche site IRA vs 401k Central was a TON of hard work in the beginning – writing my own posts, building the site, and testing out what worked in terms of link building. Some things I did right, but I made a lot of mistakes.
And to some degree, I feel I still have a LONG ways to go and a lot of work to put in before I’m a true success or some kind of expert.
But this is where niche sites became so attractive. As I was working along with this project, I began to find ways to make this process of creating niche websites into a scalable business model.
If I built a second niche website, could I repeat the same steps and add yet another money maker to my portfolio? Absolutely! And what’s better – instead of repeating those steps myself, I could outsource those tasks to a VA.
So now this business is scalable. I could own one or five sites, and my involvement would still be the same. When you know what works and what doesn’t, you can pay others to work on those things that aren’t absolutely the most important to your online business. Now you can use the labor of others to multiple your chances of success.
The Importance of Being Scalable
It has been said that 50% of all new businesses fail within the first year and then by the end of the fifth year as many as 95% of them are gone. Despite all the best intentions, best efforts, and hard, hard work, failure still happens. Why? Because they fail to grow.
When a business just exists, it’s dying. When it’s not growing, it’s dying. Growth, even if done slowly, revitalizes motivation and reaffirms positivity. It also ensures positive cash flow and validation for your business model.
As bloggers, this is where I feel a lot of us go wrong. We may have some short-term success with freelance writing or selling a few ads. But to some degree we are limited by the number of hours in a day. We are limited by traffic. We are limited by who chooses to reach out to us and what they are prepared to pay.
Though some of the bigger sites have found luck in these areas, I feel as though a better and less risky approach is to diversify our efforts. We need to make sure that what we work on are scalable business practices that we can use to grow our income by 2X, 10X, or even 100X what we are making now.
Readers – Is your online income money making strategy scalable on a larger scope? What kind of limitations do you see yourself up against as you try to grow your income potential?