I’ve been doing some planning – well its better than doing some work right? Although you many of you, like me, will have sat through the annual corporate planning wank – “failing to plan is a plan to fail” – in the business of making passive income online planning is a often just another way to procrastinate for many people. After all planning the next big thing is much more fun that getting a few more backlinks!
Working in IT put me off planning for a quite a long time. I never had a plan to succeed when I starting trying to earn an online income – I didn’t have a plan at all. Which wasn’t a bad thing – lets put it this way if you are 16 and have just decided to go to medical school – should you have a plan of which speciality you want to end up in and what income you want to be making by the time you are 30? To be honest you shouldn’t – you have no idea what life is like, haven’t met your life partner yet or had kids or not, you don’t know any thing about medicine – you have no background knowledge to make a reasonable plan. Ten years later you may have the basic knowledge (preference for medical speciality, costs involved and lifestyle of that particular speciality, know how much money you need to earn, have a partner or not etc) to make some sort of reasonable plan. If you don’t understand how to make money blogging or how to make money “placing google ads” (both search terms this site has been found for in the last month – I suggest you forget the big picture and go read How to Make Money with HubPages
Last week though – while I was surfing rather than working – I came across a planning post which actually sounded like it might be useful – it was over at The Art of Unconformity- Unconventional Business Goals. To be honest Chris’s business model is nothing like mine – I don’t want a book contact nor do I want to be recognised public speaker and coach. Nor do I want to go to every country in the world – for the sake of crossing it off the list! Those are all his goals. What I like about him though is that he’s an excellent writer, and a lot more transparent about his business model than most. His planning model made a lot of sense to me. I took a couple of days and really thought about my goals for 2010. Now I am still a reluctant goal setter and I certainly am not doing it for any thing else in my life apart from my business (finding nice beaches with warm water – seems to happen anyway doesn’t need a written plan!). But for my business I came up with three key goals:
Passive Income Goals 2010
- Make a consistent profit of US$5000/month of which at least 60% ($3000) should be from residual income websites e.g. affiliates, eBay, Amazon and Adsense
- Develop website trading business to improve diversification of income sources
- Develop my own products to improve diversification of income sources
I am sure someone will point out that US$5,000 is not very much – what about planning for the future blah,blah. Well I already did that – my partner and I have property and and the (rare) winning stock picks so essentially all I am looking at doing is replacing an income not building a nest egg. I am not supporting any kids either – I’ve heard those are expansive! We own our own home. We don’t need flash cars or new clothes – though our dancing and travel habits don’t come cheap! Oh and the goal is in US$ because that is what you get paid in on the Internet – the exchange rate I can’t control – the fact that A$ has appreciated 30% against the US$ in the last year hurts – but there is nothing I can do about it. You goals have to be within your control – I’d love to plan to win the New Zealand Ballroom Champs next year too – unfortunately that’s not in my control either (too old, too fat, not enough talent etc).
For me the most useful part of the planning exercise was what is not on the list – I spent all day thinking about and researching the market for starting a local SEO business for New Zealand small businesses – in fact if you want to go for that niche knock yourself out – you will have to educate your clients but there is hardly any competition targeting the SME sized market and at the newspapers and Yellow Page advertising rates leaves plenty of room for a profitable service which will save your clients money. Why am I telling you this? Because I am not going to do it. The more I thought about what I value about earning income online:
- keep my own hours, control my own time;
- answerable to know one except the Google Gods;
- dress optional
Would have been severely impacted by working for clients! The more I looked at the streams of income I did have – and matched them against my income goals – made me realise that I was nearly there – in the last five months I’ve averaged $1300/month from passive income sources. In November my actual income (including freelancing and it probably won’t hit that level for a few more months) was over US$4500 – an all time record for me and pretty much what I would make in a professional job in New Zealand. I didn’t need the distraction of starting another business, certainly not one that impacted on mycore values of being answerable to no one!
Its obvious writing it down now – but I have been thinking about the SEO thing off and on now for a year – now I have come to a decision about it and can move on.
So – I do actually think that if you are just starting off online you don’t need a detailed business plan. )Pan to spend little to no money on gurus and a lot of time on educating yourself. Find one approach which sounds liek it might work for you – and then take action, rinse and repeat.
If however you have been in this game for a year or more – I do think you might want to take a look at Chris’s approach to planning and try out his spreadsheet – you may be surprised at the results – I was!
And I like the idea of doing an annual plan for your passive income business in December not January – why?
- December is often an outlier income-wise for many people – looking at Dec to Nov figures rather than Jan-Dec figures will minimise the feel good/deep despair effect those Dec figures will have on you;
- December is often a disrupted month workwise (even if you aren’t moving countries!) – go with the flow and do a plan instead of trying to stick with the routine;
- SEO : in January everone else will be googling “passive income goals for 2010” – or so I hope!
Check out my attempt at improving my time management to actually realise my passive income goals for 2010