Big U-turn ahead! I started this blog in April 2008, actually it was probably a couple of months later and backdated the first few posts. I’d started working full-time online in the previous October. I didn’t have a clue. I was full-time because I didn’t have a job, not because I was making any money! I was going to be a success by Xmas. Maybe this Xmas?
At the time I called this blog “Passive Income” – because that’s what I wanted, and because I thought “passive income” would be a good term to rank for in the search rankings (it wasn’t – but I got to page 1 before a specific Google penalty knocked me off).
Niche Websites – Rise and Fall
My best ever Adsense month was January 2011 – I made $1383 dollars. I made the same again in a range of affiliates which ranged from Amazon to The Keyword Academy. In April 2012 the Penguin update by Google which penalized sites which had built links with insufficiently varied anchor text. The next month my Adsense was down to $700.
In August 2013 I made about NZ$46 (say US$38) from Adsense. The penalised sites haven’t recovered, and I haven’t bothered building any others. I could, and contrary to what Google would have you believe, you can still get them to rank. But they are vulnerable. And I don’t like having my business being controlled by Google – they employ more PhD’s than me – they will win.
eBooks Rise and Rise
eBooks on the other hand are the same, but different. I repeated history and started with writing my passion – travel. I make a hundred or two from my books – but the market is small and the competition tough.
If Amazon changes their policies around indie authors, I’ll feel the pain. But not so much. You see the secret to eBooks – for me anyway – came with the success of my quick guide on how to format Kindle books. I wrote the book in frustration – not as a strategy.
On the back of it I launched BookFormatter.com. I started making regular money freelancing – my doing for people what I explained how to do in the book! Never, ever think that giving away technical “secrets” is a bad thing, many people, having acquired the knowledge will happily outsource to a person they trust to do a good job – you know like the author of the book!
I’ve been in this game – mostly full-time – since 2007. In that time everything has changed. Hubpages and been and gone, Niche websites have been and gone (for me). I’ve been a writer and a book formatter, A website designer and an email marketing consultant. When I started social media didn’t really matter. The controversies and flame wars happened on blogs not facebook! Search traffic were the committed buyers – now more and more people buy through social media recommendations.
Working for Passive Online Income
Until this year most of my effort has been basically on building passive income. Ultimately I’ve failed at that. Google changed the rules, my attempts at manipulating the search results failed, and I didn’t have the heart to re-build. I couldn’t see it working for a many more years anyways. Google is becoming less and less important to informing how people make buying decisions.
Working Online – How Did I Do It?
I got paid on shared-revenue sites: Hubpages to BubbleWS
you get paid for your skills by others needing your skills i.e. freelancing
you get paid for recommending other people’s products (affiliate sales)
you don’t control your income because you don’t control the terms of service of the sites that pay you
takes little skill to get started
the rewards can be quick
you can learn a lot and make a lot of connections
it’s perfect if all you want to do is work online and not deal with hard-core “selling” (raises hand)
when it works you really do make money in your sleep – I came back from a 2-month overseas trip with more money in my bank than when I left!
it’s not long-term recurring income regardless of what the third-party promises
your income is controlled by terms of service you don’t control
as an affiliate you ride the wave up and down of the service or company you’re promoting
for mainstream products e.g. Amazon, eBay – affiliate marketing is basically dead because of the way Google now prefers it’s own brands in the search results
unless you’re very, very clever you are building someone else’s brand and not yours
writing for revenue share on sites like HubPages, Squidoo, BubbleWS etc
publishing books on Amazon and other sites
developing websites which are designed for ranking in Google and getting visitors from search traffic only
making money from Adsense and affiliate sales from websites which rank in the search results
freelancing via third-party sites such as odesk and eLance
Developing An Online Business
How Does It Work
you offer something that people want, that you can deliver and that people will pay for
you develop website, social media etc – with the purpose of getting people on an email list
you may use third-party sites like Amazon to get your message/name/brand out there – but the ultimate purpose is to push people to sign-up for your email list
you develop a website and an email list that you control. Traffic comes from a variety of sources which include social media and Google
control – you control your product and you have access to your customers, if Amazon suddenly decides to offer only a 40% royalty you can decide to move your customers elsewhere
you can leverage customers and offer more expensive services and products to a smaller group – you can ultimately make more money with less effort, and it is sustainable
developing an online, or mainly online business, costs very little money
you have to develop some basic ability to explain why your offering may be useful to someone (“marketing”)
The last few months I’ve done a fair bit of freelancing – it pays the bills – but it’s also done something much more important than that – as a direct result
Freelancing made it obvious to me that there was a gap in the market, and realise that I could help fill that gap.
I’m currently buzzing with a new business venture a business partner and I will launch before the end of the year. We know there’s market demand. We believe we can fill the gap. We have the skills to make it happen and have identified a launch platform. Plus it will pretty much use all the skills I’ve learned in the last 6 years – plus a few new ones 🙂
You might want to sign up for the newsletter – in the box that will appear below in a second… There may be a special deal in the offing for subscribers… Can’t say much else – after all I’m trying to build excitement and buzz. Oh and we are still making it up!
I’ve gotta say – if I can find the skills to start a business – than anyone can! Seriously.
Happy Thanksgiving to the Americans – may your turkey and shopping go well. And the family thing if you approach it the traditional way!
Back in January I talking about business planning – and at the time I expected to do several follow up plans which would detail business plans for several of my bigger websites. But it never happened. Why not? Frankly – I was stuck! I couldn’t figure out a business plan for my favourite niche – my main travel blog. So I did, nothing.
Well I did think – quite a bit, and thought of and discarded dozens of plans. Now, several months later, I do indeed have a plan. If you just CLICK HERE I will tell you how to make $997,999 in the next 7 days while planning your next vacation. Nah sorry – but I’ll tell you what I’m trying to do – who knows it may even work out!
Travel Blogging Is Tough
My first website (it wasn’t a blog) – was in travel – it never made a cent. I still have the domain, now it makes a few cents with Adsense. My first blog is long gone (I have the content somewhere on the hard drive). It was the classic: this is what I’m doing type trip diary. Then I discovered you could get paid to write posts about specific companies – then I lost all my page rank and also all the well paying posts. Lesson learnt – don’t blog for cash!
Then I discovered Internet Marketing – found out just how highly competitive most keywords were, and how little interest I had in writing about “Disney hotels with kids club” or “luxury Alasakan cruises” and dropped the whole idea of making money from travel.
For a while.
But I do really, really like travelling. And I’m good at it – I’ve done a lot of it. I am the go-to travel agent for friends. Unless of course they want to know about Disney hotels or Alasakan cruises!
Every year or so I’d look at it again. I learned a whole lot about SEO – it was a tough niche – don’t think that Expedia or Tripadvisor show up in the search listings by accident!
I figured out that long-tails in travel could add up to decent traffic. But still I did very little about it – why? Because traffic won’t pay the bills – traffic is a requirement for a successful website – but you need to figure out a way to monetise that traffic. And I hadn’t.
Travel Blogging – Where’s The Traffic From?
Today I answered a thread over at The Keyword Academy forum – someone had around 7000 visitors and month and not a single Adsense click. I asked simply: where was his traffic from? It was social. He’s worked hard to get this traffic (spread over 3 niches and only in a few months) – but basically the instant he stopped tweeting, facebooking, g plus oning, and pinning – the traffic disappears. And although he may eventually make money from the traffic – it won’t be for a long time, and it won’t be from Adsense.
I’ve seen travel bloggers hesitate to travel – because they thought the destination in question didn’t have good Internet connectivity… Anyone see why that is deeply wrong?
Which brings me right back to the most reliable form of traffic I know – Google. Yeah I know their are plenty of people saying diversify, diversify – but at the end of the date whether I publish this post in the next hour or in 3 months time – will make very little difference to this blog’s traffic. Most of it comes from Google, and most of it comes to posts that are years old.
But bloody hell the competition is flipping fear in travel. I’d looked and looked for “green keywords” in travel. Never found any. I was scared off.
I kept buying toys and playing. I particularly enjoyed playing with Ton’s Keyword Researcher tool. I threw a few terms in around Thailand travel. It came back with some nice long tail phrases. I tossed some of those phrases into Fraser’s Keyword Strategy tool – to give me the search volumes (could have done the same thing with Keyword Academy‘s Niche Refinerary but would have taken longer). Right so – Google is telling me that the terms that Google GAVE me have no searchers. And the terms made sense, and were similar to questions I’d seen asked in travel forums. I built a couple of pages. I interlinked them. I added some backlinks.
Up until a week ago I hadn’t posted on the site since October. I hadn’t built a link since before Christmas. I had 1000 uniques in the last month, 85% from Google, and 20% of the visitors were for search terms which had no search traffic according to Google!
And that 20% of terms that had no search volume? Most of them were variations of the terms from Keyword Researcher! (I’ve been fairly on the fence about Keyword Strategy – but I do REALLY like the way it gives you rankings for all the obscure one off search phrases you get).
Travel Blogging: How To Monetise
This has been my stumbling block – forever – with travel blogging. How the heck do you monetize it? The standard ways to monetize blogs seemed to involved either:
promoting the blogger’s brand in order to launch that career of public speaking or writing: see The Art of Non-Conformity or NomadicMatt. Problem: I loath public speaking and I don’t live in the US or Europe so my chances of getting on the conference circuit are zero. If you want to write books these days I see no point in doing anything except self-publishing.
Getting freebies for press trips, promoting certain hotels or travel companies in return for goods and services: see yTravel or GoBackpacking. Problem: I’m not single, and have zero interest in travelling my own country. Travel freebies never include the airfares – so suddenly I’m paying to travel solo somewhere I may or may not have wanted to go to – and this is the killer -in a GROUP. Yuk no thanks. I’m sure there was a point in my life when the thought of free trips and 5-star hotel stays would have been very exciting. But no longer.
Which left me with
Adsense – most of the topics I am interested in don’t give great CPC’s
Affiliate programs via hotel and airline booking sites. Again awful commissions. On the other hand if this post is right – there is money to be made in hotel affiliates with the right traffic.
Selling my own products. I wrote a book. I have 3 or 4 others – 1/2 finished. Then I got confused – should the content go in a book or on my websites? Both?
Selling ads. There are of course ads and paid links. Paid links are awful, terrible, a blight on the landscape of the Internet, and very popular in the travel niche. Ads are just that – ads. The difference? Add the no-follow tag to a link and its an ad. This monetization method still seems to work for many in the niche.
And then suddenly I realised – I was overthinking it.
I need traffic and I need the social stuff – because advertisers use both to determine what a site is worth to them. There are enough monetization options to worry about the fine details later. Those options are not trivial amounts of money either – for example see Kirsty’s earning reports – almost all of her income is from direct advertisors and all her sites are travel sites. And she spends most of her time volunteering in places that don’t have great Internet.
I’ve redone the site. I’ve now got a “travel blog” separate from my distinctly keyword focussed content. I will silo the keyword focussed content even further (also making it more attractive to future advertisers). Thanks to the magic of Catalyst I didn’t even need to get another theme, just changed the skin and did some different layouts.
Oddly the whole BMR debacle has really energized me. As they say in New Caledonia plus ca change, plus c’est le meme chose. I think I just narrowed my focus down from about 30 sites to two – but apart from that – its all business as usual LOL!
What about you? Are you changing your business significantly after the recent Google changes?
Short version, why should you read over 3000 words of my ramblings? Because most people don’t have a business plan to make money online, and I think more of you need one!
A Whole Bloody Business Plan? Why Not Just Some Goals?
This started off as my 2012 goals post – and ended up as an Internet Marketing plan – how the frig did that happen? I read some other people’s goals posts – and don’t get me wrong. I’m not knocking posts like this, or this, this one, or indeed the one that made me buy a book. I read them all, and they all seemed reasonable goals and plans.
But I wanted a bigger picture, I wanted a vision, some frigging idea where I was going with this whole business thing, and 2012 in particular. Or, to be allegorical, (’cause I am playing with language at the moment), I needed to know the layout of the forest, before I focussed on individual trees!
And then Google has failed me. I figured that now I was finally ready to write a business plan for my Internet Marketing business, Ms Google would provide me with a handy dandy template, or at least a format to copy!
Nope – I found a couple of sites willing to sell me a a template, for a bargain price, limited-time offer! But not a similar business plan to be found on the Interwebs! Well guess its time to fill the niche! Naturally I should have realised this months ago so that I could be #1 for “internet marketing business plan”, ah well, maybe next year? Maybe its just that Internet Marketers don’t want to admit to their business plans? Well I’m sure the A-Listers dont – but Z-List bloggers signed up for transparency – so here we go!
Anyway what I did start with was a fairly ordinary free business plan – and adapted it, yeah its written by New Zealanders, but none of this is stuff is very country specific.
Does Everyone Need a Business Plan?
Well as I write this I am entering my 5th year in this business. This is my first business plan. Should I have had one early, probably, let’s face it, I’m hardly a star on the earnings front! Should I have done one at the start – nope, you can’t write a business plan until you know your business. I still think it takes at least a year before you have any chance in hell of writing a business plan!
Because unless you can actually write down your business model and strategy – you can’t write a plan. As I look back through my archives, I see so much stuff that I tried and failed at, and some of it my fault some of it just failed business models that are now the relics of history. (Note to self – go through and put some caveats on those old posts in case someone actually reads them!). In the long-ago past I actually used to have to write business plans for company units, every now and then, as part of my job, it was a nightmare, but at least I know how to do it. My lack of business plan to date has nothing to do with being unfamilar with them, it was because I didn’t have the necesary information.
Now I think I do.
I’ve modelled this plan on a “normal” business plan, as linked to in the link above. If you want to apply this to your own business I suggest you download it and read the notes, you could buy a zillion worlds of business books on how to write a plan – but this template is the essence of the format, used world-over and beloved of MBA schools!
Business Model for Internet Marketing – Overview
For the brief history – see here. The purpose of my business? Well to make me money while I sleep of course? Could there be any other?
Hmm my products and services … Well I’ve written one book in the travel niche and have plans for more. This in essence is the difficulty of writing this type of plan when you are in the business of affiliate marketing and ranking sites that make money from Adsense. WTF are your products and services!
Are websites products? I think they might as well be for the purposes of discussion, after all they make me money even though I don’t see them as my product per se, i.e. I don’t build websites to sell on a regular basis, instead they product me on-going income by way of affiliate and other advertising.
Yup lets take websites as products – in which case I have, 53 domains registered. Of those 5 are purely personal so can be ignored. Of the other 48 I have websites in some shape or form on all of them. Some of them are supposed to make me money and do, some are supposed to make money and don’t, others are “support” sites which aren’t supposed to make me money directly.
Current position of the business – well summary can be found here. Where is my business in the business lifecycle, I’d say its at the start of its growth phase. The industry of Internet Marketing I’d say is an emerging industry which is developing at a frighteningly fast rate.
I really do see the whole on-line digital marketing/publishing world evolving at a speed which its hard to comprehend even to those of us who live in the midst of it. The rate of change is currently only accelerating, quite probably at a exponential rate, regardless of what measurement you are using.
Overall the whole landscape of SEO, affiliate marketing and digital products are all changing at light speed. Really I’ve always liked technology for its speed of change, but the whole online environment is amazing quick moving.
Ooh a competitive analysis – who are my competitors and how can I capitalise on their weaknesses? My competitive advantage is simple, I’m small, I answer to no one, no bank to please, no investors. If I want to try something new in response to changing markets I can, and do.
Who is my main competitor? Well this is where I’m starting to think that I’m going to need to do a business plan for each of my main websites (or groups of websites), for example this site has a quite a different competition environment than say my travel sites.
In fact I think I will do that for a least three of my sites over the following week or so. So I’ll keep this post at a high level.
To be honest I don’t see my main competitors as the people who own the sites that out-rank my own in the search results. Rather I see my main competitor as Google and the major brands (Amazon, eBay, TripAdvisor, Expedia, LonelyPlanet) who Google tends to favour in those results.
My advantage is that I can go more niche and more specific than the competitors. Travel is a classic for this – try searching for a specific destination which you know has hotels. Pick somewhere obscure, but that definitely has businesses with an on-line presence. What will you get? Results for the nearby state, province, town – but not the specific destination you entered. That’s Google preferring their brand partners. But its not in the searchers best interest, eventually it will have to change. Eventually in Internet Marketing is within the year.
My other advantage is that I’m unique, people have called me lots of things, but bland is not one of them. On my count I’ve made more friends than enemies for being outspoken and saying it as I see it. You’ll never get h0nesty from a tourism website or from 99% of internet marketing websites. I can do honesty – must be an advantage!
How am I going to increase my capability? I’m not, there’s nothing much wrong with my capability, its my application of the same which needs work! So really I need to either, severely limit or eliminate, the time I spend on Facebook and possibly some forums too. The trouble is of course, that forums and social media do get me visitors and subscribers, I’m just not sure that its worth the effort 1/2 the time.
How am I going to increase my capacity. Well I am going to build up my outsourcers as I grow my income. There seems to be plenty of people who can write competently, I’m happy to employ them, as I can afford it, to build my business.
I see no issues with growing my business, the problem is merely the CEO who has to stop bouncing from one new, bright idea, to another and to actually flipping focus!
The suggested time frames with the original template business plan is “next year” and “next 1-3 years”. I think we need to focus in a bit of a shorter time-frame to take into account the speed of change in this industry.
1-3 Month Goals
Goal 1: Fast Cash via Wizzley
Well specifically I need to find NZ$3500 by April and the same again in May for taxes.
I’ve proven that Wizzley will rank long tail articles on page 1 of Google within 24 hours so I’m using a combination of content I’ve removed from Hubpages plus Tony’s Keyword Researcher to reuse most of that content and try to make some quick cash on Amazon, to compensate for the loss of Hubpage Amazon earnings from January and to pay my taxes. I’m not pretending its a long-term strategy – but I need the cash now, and the pages can provide backlinks long term.
I have 2 ID’s on Wizzley and I need to get both to over 100 articles to maximise my revenue share. I’m hoping that once I have the momentum going, that I can outsource most of my “anonymous” account’s writing.
I’ll need to average about 7 articles/day to get 200 published by the end of January. That’s lots, but not impossible.
Goal 2: Diversify from Google – Branding and List Building
After years of being anti-list building, I’ve changed my mind. I’m building lists for a single strategic reason. To remove some of my dependence on Google (see SWOT analysis below). The two main areas that I see that I can build lists is this blog, and my travel niche. These are two topics that I have genuine knowledge of and write almost all (all for this site) my own content for.
It also means I have to play the “branding game” – hence the Z-List Blogger manifesto!
I don’t even know what is considered “good figures” for a mailing list. I’ve seen plenty of bullshit figures in the A-List circles (let me know if you want me to tell you how to fake the numbers!). From a standing start (i.e. zero) on the 7 November, I now have 118 subscribers here, and 72 over 2 travel blogs. I probably need to give the travel subscribers a reason to subscribe ie a discount on a book or a freebie, and maybe the same here? I’m not sure. But I am (slowly) evolving the way that I split content between my blog and the subscriber list.
I’ll work out some specifics in my specific business plans for my main sites here, suffice to say, I think 1000 is a nice round number!
Goal 3: Diversify from Google – Publish More Books
I need to finish the books I’ve started and get them out there making some money!
3-12 Month Goals
Goal 4: Use the Wizzley Results to Diversify
Using the results from my Wizzley adventure, any winning keyword groups I will use to develop new niches. Early results suggest that Wizzley is rubbish for Adsense click thru rates, so these will probably be product niches.
Goal 5: Promote my Published Books
This one is vague at the moment – lets get the books out there first!
Despite Google’s best efforts at mis-information to the contary, I don’t see a whole lot changing as far as promoting websites in the near future. Its all about content and backlinks, content is a bit more important that it once was, but I still see absolute crap rank at the top of the search results, why, backlinks and site authority.
I know how to build both – but I’ll leave the details to specific posts I think at this stage.
The main risk I see in the next few years, for me and other affiliate marketers is Google, pure and simple. But the market is changing so rapidly, its hard to know whether search will even be the more dominant method that consumers use to find information in the next few years.
Do no evil. Really, because, lets face it, Google abandoned that particularly philosophy a long time ago. Yeah I’d acutally like to be ethical in this business. Particularly in Internet Marketing, because, lets face it, there is not too much competition! Hence the transparency – how many other Internet Marketing blogs actually tells you the number of subscribers?
SWOT and CSFs
SWOT analyses are cool – not heard of them? Read up, there is precious little useful in all the management courses I’ve done over the years, but learning to do a SWOT is handy, not just in business, I do when I’m buying a house too.
Strengths of me/my business:
diversification of income sources: I make money from many niches and from many advertisers.
I have standardised my sites on WordPress and Catalyst – and they are therefore much easier to manage, update and control than previously.
I live in a country that doesn’t have, and is unlikely to have, sales tax. This means the chance of my Amazon affiliate account being banned is low.
I have an eBay account, got in early, not sure what to do with it these days though, as I can no longer use it through HubPages. I do, however, know they are rare.
I’ve been in this game long enough to have some confidence in my own ability to pick keywords and rank pages in the search engines.
Weakness of me/my business;
I’m getting better at selling, but its still against my natural inclinations, I’m particularly uncomfortable about selling to readers and people I know online. I can’t stomach the sort of prices many people seem to be able to put on their products and their time.
short attention span. I’ve always had a tendency to value learning, over doing, so I am suspectible to the “shiny new object” syndrome so common in our industry.
my location. Because I live in a market of only 4 million people there are few local opportunities for selling services to local businesses. Basically pretty much anything will rank here with minimal effort, and the business community doesn’t “get” SEO, because, frankly, they don’t need to.
Opportunities for my business in the current external environment;
the rise of e-readers is driving demand for cheap fiction e-books, and an as yet unknown market, for non-fiction e-books. Self-publishing has never been easier, and the sector is very rapidly evolving. There are opportunities for those of us who can write.
Threats against my business in the current environment
Google is progressively blocking detailed stats from Google Analytics accounts. The only question is when it all become unavailable or unaffordable for most of us.
dependence on Google for much of traffic and the unpredictable changes to the Google’s search engine algorithmns;
dependence of Google for much of my income (Adsense);
dependence on a formerly good revenue site, gone bad (HubPages) for some of my income
Critical Success Factors have got a bit over-run with the newer fad of KPI’s, but I like them – because they are about as basic a question as you can ask your business: “what are the key things that need to go well for this business to be a success”.
CSF1: Chose the right keywords, the terms that people are searching for who have their credit card out and ready to run. I am so over keywords that either have no traffic or no profitable traffic.
CSF2: Produce good books and price them low enough to offer excellent value for money. The pricing of books has absolutely nothing to do with how long it took you to write it!
Market research is the basis of this business. I do it two ways. Initially I take a guess at the relevant keywords, then, once I start ranking a site, I look at what I am actually ranking for, and persue those terms as well. Its not rocket science, I doubt that its changed for years, it works.
One of the delights of Amazon – is that they have plenty of actual data that they are happy to share with you (check for most popular items and then apply your imagination).
Google will tell you what people are searching for – by giving you auto-complete suggestions as your type in a query. I also have the feedback from readers and subscribers for the Internet Marketing and Travel.
My emphasis is on the US, and will continue to be. America may be having a recession, but even in recession you guys buy far more online than any other country.
Initially, one of the huge appeals of this business was that I could be a one-woman band. The human race is full of idiots and most of the worst ones had been people I’d worked with and for over the years. I was really looking forward to working with no one. It didn’t work out like that. Instead I ended up finding out just how important your friends are online. I’m lucky to have had some of the good and great over the years – many of whom no-longer post regularly.
But the Internet abhors a vacuum and I am lucky to know Mark from SEOCobra (exciting developments there in the next few weeks) and Dave from ZenDuck.me, not to mention Tracey from Tracey-Edwards.com and SY from Hospitalera.com.
E-Commerce and Technology
“Explain how you’re using e-commerce and technology in your business”. Yeah I think we can safely say technology is my business!
Tactical Promotion Plan
Interesting question – in general I’m wondering if I should try some of the tricks of Social Media to use things like Twitter and FaceBook to get more followers. The trouble is, that my experience is, that ranking for the right search terms, is not only easier in terms of time spent, it also gives me far more engaged readers!
I do want to investigate videos and podcasts as methods of promotion as well.
Nope no intention of spending anything much on marketing, certainly not going anywhere near PPC! I do pay for editing of my books and cover design – does that count?
Credibility and Risk Reduction
Who do I increase my creditability and reduce my customer’s risk? Basically I think I’ve always maintained my credibility, particularly on this blog, by not having guest posts. I’ve seen so many blogs over the years die a living death by becoming dependent on guest posters.
Selling through Amazon and other “legit” online shops (iTunes, Barnes & Noble etc), is a very easy way to differenate an ebook.
Team & Management Structure
Skills, experience, training, retention
Yeah well I think the boss needs to go some 5-star resorts, somewhere warm and learn about planning and better time management. Anyone up for sponsoring that one?
Seriously. I have one full-time outsourced writer who writes my BMR articles. I’ve had him for over a year now and he’s reliable and consistent. Last year, he had exactly one article rejected. I’m keeping him on. I do however want to expand my outsourcing in 2012 as my cash flow allows.
Well thank goodness I don’t need a lawyer! My accountant I’m training up to understand my business. A consultant – please God no! A guru and advice? Actually I was just going to delete this section – but I one of the biggest risks in this business is the isolation and the voices in your head! Where do I go for advice?
I’m pretty happy with the contacts and advice I have, I don’t see any significant change in 2012.
my trusty spreadsheet manages my cashflow and income/expenditure in several currency and actual versus cash (because affiliate programs take so long to send cash). It works, I’m not changing it.
I’m currently developing a better system to track my actual output – words or articles and projects they relate to.
Financial Budgets and Forecasts
I don’t do detailed budgets or forcasts, I may add this in this year though as I ramp up. It would be useful to have when I decide to increase my outsourcing budget.
My cashflow forecast is that I need:
7/4/12 – $3599
7/5/12 – $3419
for taxes. We have it, we aren’t going to getting into dispute with the tax man, but I am determined to have that money out of my own business’s cash flow! On top of covering my 1/2 of the household’s expenses (which I have done for 2 years now).
Summary: Internet Marketing Business Plan
Wow that was a bit of a mission! But a useful exercise – I think I still need to drill down and focus on individual sites for their business plan’s – I’m a still a bit vague on just how many sites I’m focussing on this year. But its been an energizing exercise for me, I hope it inspires you too – let me know in the comments!
Yeah Christmas or whatever you choose to celebrate or not in this happy/stressful/profitable time of the year! I think its fair to say that 2011 has been a bit of an up and down year in terms of Internet Marketing, maybe I’m just bloody lucky, but really all the bad stuff that’s happened to me has been thanks to the TOS changes with HubPages plus nervous clients.
Google has been, interesting, but the most interesting thing, and totally bloody irritating part, are their continuing moves to restrict access to their goldmine of data known as the Google keywords tool.
For a long time using the tool direct doesn’t give you real long tail keywords – you only get to about 3 or 4 words: a real long term is longer than that. Its very, very focussed, its not in Google’s best interest to reveal those because a) PPC advertisers would save a fortune only bidding on very specific terms and b) evil affiliate marketers would make way too much money.
Google’s changes to their API TOS has meant than some previously good tools have gone away – and I am sure I’m not the only one who has found I miss my long-tail search tools 🙁
But nature abhorrs a vacuum – well Internet Marketers do anyways – so when a tool is lost, and the whinging is loud- something else pops up to fill its place!
However because its Christmas – here are three two (third one coming in a day or so – the developer is just sorting out his landing page, and this is getting too long anyways) rather cool ways to work around Grumpy Google:
Tony’s Keyword Researcher Review
Easily get all the long-tails that Google provides through “auto-suggest” – really quick way to build out a site or an article.
This cool little tool is based on Google suggest – you know the annoying pop-up that you get when you start typing a query into Google. Its not the only tool that does this – (scrapebox.com is the common one) – but I like this tool a lot more: very, very easy to use, just watch the videos at Keyword Researcher and get on with it! I’ve been doing this for a while and Tony has some different wrinkles I’d not thought of…
Google doesn’t say how many searchers need to be looking for a phrase before it pops up into auto-suggest, but we can all assume its probably more than a few.
Now this tool won’t give you the competition figures, but it will give you a pretty long list of suggestions – and you can continue your investigations from there.
easy and intuitive to use – doesn’t try to be overly fancy;
free download and trial (does everything the paid version does but only on the first 1/2 of the alphabet)
one-time cost and cheap!
Watch Out For:
the tool is installed on your PC and its scrapping Google results – you’ll get banned (plus anyone else using the same IP) – its not big deal – the tool will point this out to you – wait 15 minutes – try again.
this won’t give you competition or difficulty for your keyword phrase – doesn’t pretend to. To get these you will need to put the terms through another tool: Google Adwords, Keyword Strategy, or Neale’s No Results Report (review coming this week) – would all work!
Want some variation on your core keyword – for sub-headings? Want to build out a site? Looking for a few easy pages to rank on Wizzley?
That evil, self-serving affiliate link again: Keyword Researcher – even if you don’t buy – check out the vids they are worth listening to!
Tool number two for today (hell a girl’s gotta get her commissions up you know!) is
Amazon Gold Mine Review
Provides new lists each week of Amazon products based on their price/popularity/discount/top ratings and lots of reviews. In other words – the products you want to the affiliate for! Also provides a “bargain basement bin” for very cheap products – which I don’t use – but might even save you the fee if you are in the US!
Lets be upfront – I’m not the world’s most successful Amazon affiliate, I’ve only recently started focussing on it, but I’ve sold enough random products over the years to be constantly amazed at what does actually sell on there (thank you whoever you are who decided to buy $300 worth of textbook and maths teaching guides, and the guy who bought not one, but two $500+ woodworking tools!) And no I am in neither of those niches! That’s the power of amazon- get the customer to click through on your 99c e-book and suddenly they will remember they need to do thousands of dollars of Xmas shopping – all on your commission!
the last six week’s reports are available in the membership area – you don’t have to rush to download them. In fact maybe its all the reports since you became a member? Anyways I’m pretty sure on subscription you get the last 3!
sorted by department – so its easy to find your niche.
Watch Out For
to be up front – you can do this yourself – at least the basic query – by using some clever stuff in Google – for me – I can’t be arsed the easy format and the tagging of which products are “NEW” on the list each week – is worth it for me!
its a monthly subscription – not a huge amount of money – but yeah its money- a pain. Take a note of the sub date and remember to cancel in Paypal if you are not using it – or you have enough results for now.
there’s an up-sell of some AMAZING affiliate system on the front page – I know nothing about it and don’t recommend it – all I know about Amazon I’ve learned from Dave from ZenDuck
The criteria for product selection means that its easy for anyone to write a review – so I’m using the list to develop ideas for Wizzley for a new niche. Basically I can try a product related niche out – see if it ranks easily in Wizzley and build out a site later if it works out (and use Wizzley for the backlinks).
Yeah and here’s that evil self-serving link again: Amazing Gold Mine – or take the criteria they use and develop your own queries!
THE BIT AT THE BOTTOM YOU SHOULD READ!
I’ve found a cool wrinkle on the hubpages fiasco – but I don’t want to shoot my foot here – I will be saying something to subscribers later this week – so sign up OK – that’s the honking bit form just below here – that one -the big one you can’t miss!
For fucks sake – I am over this whole -“Google hates me”, “I must please Google”, “is this OK with Google” shite going down in certain circles.
Google is a company.
Google is a search engine that using a superbly complex algorithm.
Google doesn’t give a shite about you – because you are not Google’s customer.
I think a lot of people need to get over this unhealthy relationship with Google. Because as it is now Google appears to be winning the war – which war? The propaganda war.
You know spreading mis-information and fear – the oldest propaganda trick in the book. And its working. Take for example the bullshite about buying and selling links. Google hates it. Of course Google hates it – links are what their search engine algorithms are still (mainly) based on. The reality is though, its pretty darn difficult for Google to know when a link is – well just a link – and when a link is a paid endorsement.
So often times you can get away with lots of paid links. But even more importantly:
If you are not ranking in the search rankings anyway why the hell wouldn’t you sell links – it could be a nice little earner!
Selling links is gaming the system, well that’s true. Selling links will get you thrown out of Google’s index, it will get you sent to the pergatory of the 999th page, your site will be deindexed and your sins will never leave you! Selling links is immoral!
Google doesn’t want you to sell links, or buy links. However that’s just a preference they have, because it helps their business model if you don’t. Selling links is bad for Google’s business model: selling your kid sister is immoral – see the difference?
I call bullshit on the rest of it. Lets start with the immoral bit first. This would frankly perplexes me. Google’s algorithm depends in part of counting the links to the page the more likely Google is to rank that page near page 1 (gross simplification there). So people who want their site on page 1, will acquire links to get them to page 1.
None of those links are paid for though – so they are OK. But if I take money for a link on my site – then its immoral and wicked and polluting the electrons of the Internet ??? Pleeeese. It sounds like a business proposition to me.
Selling Links in 2011
The link selling industry is alive and well. Most of us who have active blogs, particularly a site which is anywhere on the first couple of the pages of the search engine results will be familar with the email:
“Dear webmaster I love your site – I would love to provide some free content to it – the content is very well written and highly relevant to your readers. In return we will want just one tiny, little link.”
That’s the first offer – they want their link for free. You could try saying yes – and then no-following the link 🙂 Always amusing that one! Better yet – negotiate a decent rate – and then make sure the post doesn’t annoy your readers.
Decide on a Business Model
You either want to sell links or you want to rank in the search engines – I suggest you don’t want to do both on the same blog. You also want to pick your niche. For example, there is no point selling links in the Internet Marketing niche. Anyway there are plenty of affiliate programs which readers are interested in, and which pay me commission.
Other niches are different. Take, for example travel. The affiliate programs in travel don’t seem to convert well – who goes to a blog to book a flight or a hotel – most travellers know how to spell expedia or hotelclub – and they go there direct. Travel on the other hand is an enormous global industry. An industry which is going more and more on-line. Having your travel site on page 1 of a search listing is very, very worthwhile.
Paid Links and Sponsorship and Advertising – Same, Same – Not Different
Apparently advertising is OK but paid links aren’t – well that’s what some in the travel community seem to think. I call bullshite on this one -plus a pile of mis-information in the post and the comments which caused me to write this.
Not one of the sites I reviewed for this post no-followed any of their paid links: sidebar, footer, links under “Advertising” headers, widgets, or in-content links – either declared or not. As far as Google is concerned – if they want to come the heavy – they are all paid links unless you no-follow them.
In practice – if they are actually links to affiliate programs – then Google will probably not care. If they are links to landing or home pages of the advertiser – for which you are not getting a commission for – Google’s reviewers are going to assume you are being paid.
After all why the heck would anyone want to go to any of these advertisers – when they are on a travel blog? Yeah I outed the guys buying the links – not the bloggers being paid – rather see the pimps in jail not the pros if you see what I mean?
So if you are going to do paid links –
Do Paid Links Smart
Here’s how. You need to put all the paid links posts in new category – I suggest that you don’t call it “Paid Links” – maybe “Guest Posts” or “Miscellaneous” might be less obvious.
Make sure that category doesn’t appear on your front page, and remove it from your RSS feed. So now you have money in the bank and you haven’t annoyed your readers – that’s a start.
I would seriously consider re-writing any “Advertising/Press” page you might have to include that you always “no follow” paid links, whether you do or not. Yeah take the moral high-ground if you want – but really Google is in the habit of shooting first and asking questions later. You can always negotiate the deal with the advertiser in private.
If you are caught up in a manual review – then you need to appear to be doing the right thing.
Also putting links in older posts – is far less likely to be annoying to readers, particularly if they aren’t posts which show up in your “greatest hits” list.
Don’t even think about doing paid links on a blog which also uses Adsense – “Don’t make Google Look Stupid” is the appropriate mantra here.
Google Hates Paid Links But Seems To Be Ignoring All But the Most Blatent Sellers Currently
I’ve been watching the most blatant sellers of links in the travel niche for a few months, including a page rank update last month. The worst I’ve seen is a drop from 4 to 2 for someone who has a paid link at the bottom of almost every post. I’ve seen no reports of deindexing.
Google really doesn’t seem to care about the travel blogger’s selling links – at the moment. Whether the little furore I linked to above, will make a difference, its hard to know, but bets would be on not, but this is game not without risks, make your judgement.
The reality is – why you can get away with selling links, you are getting cash in hand, real cash, real return. If it all goes to custard and you get penalised – the worst thing that will probably happen is that you will lose your Page Rank. Page rank and search engine rankings are not related. PR is certainly not related to social media – your community won’t notice. Yes it may affect your future earnings – but at least you still have the cash.
My cynical take is that the people buying the links are also big Adwords advertisers – they are Google’s customers and Google doesn’t want to piss them off.
If you do get done for selling links – here’s what to do:
delete the offending posts or add the “no follow” attribute to the links; and
I cocked up a client’s site today -well not their site -the new website is just fine and they are happy, but I stuffed up their email. I hadn’t realized that I needed to add a MX entry to redirect the mail sub-domain to ensure that mail still went through their current provider. It took me a few hours to figure this out between several calls to find out who the email provider was and then get the right tech details from them, and a live chat session with Hostgator to make sure I didn’t fuck it up further.
I was working under pressure, people’s email was heading out into the interstitial void instead of their inboxes. I didn’t know WHAT an MX record was at the start, I just knew I must have caused the problem. I chased the people I needed to find the right technical info, I learned a lot about how email works on the Internet, I implemented the solution.
I focused and worked and sorted it out.
I looked up after 3 hours, decided the dog needed a walk and I needed a coffee.
Then I wondered – why? Why can I focus that well on a technical problem, and yet I struggle so much with focusing to write the bloody books I need to write, develop the sites I need to develop. Get to the income goals I need to reach?
As I walked I thought about why I was good at technical support.
I learned how to do technical IT support before I even knew what the job involved. I arrived in London in 1986, with no money, the right to work, and desire to work in London and not the North Sea (thereby precluding working in my actual profession – geology).
So I became a typist, a legal typist to be exact, it paid better. I could touch type, I re-did my resume and I started working for a small agency based in the City specializing in secretaries for legal firms.
This was before Windows was invented (yup Word was not the first word processor. Google: DisplayWrite, WordStar, Word Perfect). I ended up being their troubleshooter – there were bazillions of WP packages and quite a number of operating systems (CP/M anyone?). No standard operating system, no plug and play printers. The “network” was large floppy disks, usually poorly labeled. There was no email, or google to find the answer. They’d usually lost the manuals. If the secretary was away and the partner needed a contract printed out for a client – they needed me. It was fun, I had no fear, and nothing to lose, I was well paid and I learned a ton in a short space of time. I don’t remember ever failing either.
A few years later, back in New Zealand, I set up a unix network from scratch. By myself, with a mixture of toll-calls to the supplier in another town, and the manuals. It was mission critical, and it worked well. I had no unix qualifications, no experience, in fact I didn’t know what a systems administration WAS, but someone had to do it – that turned out to be me. I worked stupid hours for months, I was well paid, I learned a ton. I don’t ever remember thinking I would fail, or what if we didn’t get it working right, or what would happen if something went wrong.
These days you’re not allowed administration access to similar servers unless you have a several qualifications, and lots of years experience. From what I’ve seen in more recent work places, they fuck it up more often than I did. But at least there’s always a paper trail and someone to blame. Must truly dreadful doing IT support these days for most corporates.
Which gets me back to – WTF does Lis’s ancient history have anything to do with making money online? It explains something – well to me anyways. It explains why, when faced with a white screen where a website should be, I fix it. When the emails get lost, I find them. I don’t panic, I don’t worry about whether or not it can be fixed, I just find out what I have to do, and I fix it.
So I have this other problem. My income has declined significantly this year. There are three main reasons:
the US$ collapsed (I’m paid in US$ but I don’t spend US$ at the supermarket)
I fired my long-term client who had got way too picky about their backlinks
The first two were out of my control, the third was simple ROI investment decision.
The net result was that last month, for the first time in a VERY long time, I spent more money than I earned.
So what did I do – did I deal with it by say, figuring out what the problem was, finding out the solution, and then working hard? You know just like when I had to do technical stuff which scares the crap out of lots of people?
Nope – I panicked. I couldn’t focus, I flitted from Facebook to Twitter to G+. I wasted over a month.
And the really, really stupid thing is – I don’t actually have to problem solve. I know how to fix my income problem, I need to build more websites, build more backlinks, write more books, sell more books, and ensure people go Christmas shopping while using my Amazon Christmas link!.
I just have to do the fucking work. How dumb – one wasted month. Time to start writing.
I’m no good at this pop-psyc stuff – but if you aren’t succeeding have you looked at the guy in the mirror lately – he may be the problem…
Had to engage in the conversation here – Leo – says there is no such thing as passive income he argues that we all should be developing businesses not just relying on SEO to climb to the top of the rankings.
Funny how my name has got associated with passive income – as friendspointed out to Leo (and not saying Leo isn’t a friend – merely wrong 🙂 ) I would be in for the argument.
Not Passive Income
OK so lets step back. In the dark times pre-passive income – I used to be a highly overpaid IT consultant – I was paid a nice hourly rate by companies who wanted to upgrade or replace software. I used to work on a salary – a “safe” job right. Yup, it was – I never got fired from a permanent job – but it was huge, huge millstone around my neck. You see turning up 40 hours a week – even if the hours were somewhat flexible – meant that I could only travel in the holidays- I only got 4 weeks annual leave so even with creative use of leave without pay, public holidays and anticipated leave – I could only get away for 6 weeks ever couple of years.
I could afford the travel – but I didn’t have the time – the rules around my presence at work were my definition of hell.
Business or Passive Income ?
I looked at options – buying a franchise is a popular one around here – but it sounded like buying a job to me (told what to do – lots of bosses (clients) and high overheads (franchise fees)) – no thanks. Plus, again – you have to be in the country to run the business.
Starting my own business – I never considered it to be frank – I not only couldn’t sell, I didn’t want to. I didn’t want to risk my capital and the failure rate for small business in New Zealand is pretty high (and usually that takes your house too).
I started to look at other options. When I started researching my options I came across the concept that you could invest now and get paid later. I could buy property and get paid rents, I could buy shares and get paid dividends (rarely in my country but the principal is still there).
Passive Income Take 1
This was promising – I did quite a bit of research. In the end we invested in property (my partner was already in shares) – and its worked for us and continue to do so.
Now some will argue property investment, particularly residential, free-standing, older wooden houses, in earthquake prone countries, is not passive. They will say houses need to be maintained, tenants need to be found, managed and got rid of.
Yup – and you can outsource the lot! Case in point – house we own in small town New Zealand.
Here’s the rough figures (all NZ$ – NZ$1 = US$0.75 at the moment – but relatively it doesn’t matter).
Purchase price 2003 – $77,000
Currrent estimated value 2011 $150,000
Unrealised capital gain 6.4% a year
Original tenant left a few weeks ago – yup same tenants for 8+ years – never missed a payment – $140 to $160/week for 8 years.
Gross rental income: $8320 or 10% cash yield
Gross yield 16.4%/year (yup that’s why we don’t focus on shares very much).
Now the property does have expenses, we use a property manager, pay Council rates and insurance, and of course we borrowed the purchase price so there is mortgage interest as well – but time wise its cost us about 2 days when bought the place (one day deciding to buy the place, one day due diligence, signing papers) and now – eight years later we spent 1/2 day, inspecting the property and arranging for someone to give it a good tidy up.
Is that totally passive income? No
Is it bloody close, the way we do it – yes. And even we maintained and managed the properties ourselves (and plenty of larger landlords do) – we would have a business giving a us a ful-time income for a very part-time amount of effort. But we don’t that because between the two of us we are crap at DIY and are too soft to deal with ratbag tenants!
Will this property be passive income for us for the next 10, 20, 30 years? Should be, likely to be, unless there is a major earthquake in the region – when it won’t be a total loss – but we will probably get paid out and have to walk away at that point. Is passive income guaranteed – nope.
So if property investment is so great – why didn’t I stick with it? Well we did – but we stopped buying – why? Risk, to make good money on property you need to gear up (borrow) – to do that you are layering risk on risk – we got to the level of borrowing against asssets that we were comfortable with – and stopped.
Property is an as passive or active income as you design it to be.
Passive Income #2
My second attempt at passive income you are familiar with, as documented right here. I rank websites at the top of the SERPS and make passive income from the advertising on them. Frankly I never started off to build a business online – a wanted a passive, long term income – and I have that now. Some of my income is from fairly new sites, some of my income are from sites and pages that I haven’t touched for three years. Last year I inadvertantly demonstrated that I could do little work for several months have not affect my income.
What’s long-term income though – will my websites still rank in 3 years, 5 years, 10 years? Maybe, maybe not – but every indication to date is that older sites rank and hold their rankings better than new sites. But one of the reason I have many websites is the same I reason I own 5 rental properties in smaller, cheaper places, rather than just 1 or 2 in the fairly expensive city I live in – diversification. If one of my houses is destroyed or untenanted – it hurts but its only part of my portfolio. If one of websites gets out of favour with Google or that particularly niche falls out of fashion – the others are still producing.
Now from what I am seeing – nothing much has changed on the last Google update – my sites are still ranking in the same place more or less, my Hubpages may be a little down – but that could be coincidence/seasonal too. February didn’t match my record January month – but I know my pattern is that once I hit a new income record it takes 3 to 4 months to match it again – in short I am seeing nothing out of the ordinary in my business.
Leo argues that I really should build a business online – a real business with real clients – but nothing has much changed for me – my freedom is still the most important thing for me – and having to be available to clients cuts into that freedom. Having a few clients is fine (and I do) – but ramping it up seems to be just trading freedom for income – a trade I’m not really prepared to make.
Leo argues that SEO will get more and more competitive over the coming years – it could well do – though I wouldn’t overestimate the ability of corporates to adapt – pretty bloody slow in my experience. He argues that I should establish a “real” business which has real followers and therefore not be dependent on search traffic. I know a little about this – because this blog gets “real” visitors not just search traffic. As far as I can tell though -the people who convert are the search traffic.
What I know is that with my silly little sites – I can make a little money – not a huge amount – sometimes $1/day – sometimes more. But even at $1/day lets look at the rate of return:
Initial purchase of site: (all prices US$)
$8 for the domain
$10-$15 for content on the site Ti
Backlink articles at say $1/each – maybe 30 -90 articles – say $90
Annual profit $243 … annual costs say maybe $20…
No mortgages, no property managers, no rates, no insurance, no risk of earthquakes…
Passive Income – Is It For You? Maybe Not If …
If You Want to Make a Difference
If you want to make a difference in the world – then blogging ain’t where its at – go become a health worker, or a volunteer in a country that needs the help. An engineer bringing clean drinking water to kids in Africa, a researcher finding a cure for cancer is making a difference, me – not so much.
If You Need Money Now
As I have advised many people – if you need money this month, or next month – or even in the next 6 to 12 months – this won’t work for you – it may, but for most beginners it won’t work. It didn’t work for me – I got a job – it paid, it was a crappy job but it delivered what I needed at the time – cash.
If You Have Huge Income Requirements
I remember when I wrote about making $1000/month with Adsense – that it seemed like a lot of money (I hit that milestone almost exactly 2 years later) – $1000/month is a lot of money to me – its not enough to live on – but I could live on it if I had to – its pretty much what the NZ government pays as a pension for the over-65’s and most of them seem to do just fine.
About US$5k /month would work just fine for me – but I see people making $10k plus in the TKA forums – frankly that’s nice – but its unlikely to ever be me – because I don’t really need the money I will probably never persue it! If you really need to make a 6-figure salary – again I’d say get a job – just make sure you have the right skills.
The Keyword Academy has this absolutely infantile, ridiculous scheme where you can apply for badges to match your (verified) income – I mean its like pre-primary school right? Except for some odd reason it does seem to matter to me – and today I made it – I made the next badge up – in the last month I earned $2500 in passive online income and I have nice pretty badge to prove it. Half of that was from Adsense and that figure represents a 50% increase over December’s Adsense figures. So how long does it take to make at total of $4000/month of online income? So in answer to the question “Can You Make $1000/month with Adsense” (written almost exactly 2 years ago) – is YES, I DO. And yes at the time, I really didn’t think it would be ME that did!
In fact I blame Mark Butler (from the Keyword Academy – yup you can get a personal consult for free within the Academy – its smart move by them – but unbelievable good value for members) – I had a consultation with him a few weeks ago – and I wrote on my white board – make $2500 by April 2011 (my anniversary date with Keyword Academy and my birthday). Oops looks like I will have to revise that LOL. Even my long-time goal of US$5500/month is starting to look reasonable – that would mean about US$4000/month in passive income. I can now see that happening this year – so long as I stop my obsessive stat’s checking and go back to work! Especially when I consider that my income has jumped while I’ve been on holidays – I thought I might resent working while I was travelling but instead
Why that figure – it would cover all our regular household expenses (so long as the US$ doesn’t completely collapse). That’s called freedom – for both my partner and I. Coincidentally it would also be about what I earned as a highly paid, bored, stressed out, IT professional – that would be sweet revenge!
So How Can You Make $2500 / month in Passive Income?
I don’t flipping know – I don’t know you – but I can tell you what has made a difference to me:
understanding I wanted a business not a job. Freelance writing is a job. Developing websites for other people is a job. Developing your own websites which produce more income even when you are on holiday – that’s a business.
outsourcing. Hiring a writer not only freed up my time – it made me become more organised because I had to tell him what to do – like duh!
having a range of sites in totally unrelated niches – sites I thought would be winners – no traffic. Sites I thought no one would EVER buy THAT online – they buy – go figure. I’m too stupid to figure this out in detail – my fool proof method of knowing if there is traffic for a keyword – get to page 1 and see if there is!
learning to believe my own stats – rather than what people are saying about the death of SEO, Google changes, Supersite, niche sites are dead, etc, etc. The best information on how to grow your business will always be found in understanding your own statistics – maybe I should write a post on that!
I don’t know how to say this without sounding like a paid placement – but I really do credit the forum over at TKA for being part of my success – I really don’t think I would have have hung on this long without the help support and I get there. I rarely ask for it – but just seeing people going thru the same stuff as I am is so incredibly useful and encouraging. Lets face it – few of us have anyone in the “real world” who understand why we play on the Interwebs all day – its nice to have some online friends who do.
Thanks for listening – now I have a lot more work to do…
There was a recent thread in the forum at TKA regarding managing your Internet Marketing income which I added my 2c to. I then got quite a number of PMs from people asking me follow up questions – given the thread wasn’t even mine – I guess my commonsense approach to record keeping and taxes are not so common. So here’s what I think is important – your mileage may vary.
My approach is quite simple – I’m not an accountant – though I did pass ACCY101 a million years ago. I have never found a “system” which manages multiple currencies the way I need to – so I developed my own. I use an OpenOffice spreadsheet – but any spreadsheet program which can sum figures and do the odd bit of multiplication will do just fine. The system has evolved over the years – but I’ve never had to start again. If I didn’t have some complex real estate investments I could do my own taxes off these figures – as it is I give them to my accountant.
Having a system to record your expenses and payments is what’s important – once you have that you can do your taxes – or give the figures to someone else to do. But either way you need to provide the basic figures.
Online Income and Record Keeping
Ignoring taxes to start off with – the first thing you need to have in place is a way to manage your online income. Long before I was making enough to worry about tax – I used to track my monthly income – it kept me sane and motivated. If you don’t know what you are earning how do you know how to improve it?
Tracking Income as You Earn it.
So my first spreadsheet was very simple: each column across the page is a month – and ever row was a source of income. As a I got more sources of income I simply added more rows in.
I split my income three ways:
truly passive – ie advertising and affiliate sales
not at all passive income – freelancing – one row per a client plus some more general one off stuff I do like hosting other people’s site and generic SEO consultancy.
one-off income – from selling domains or websites – which tend to really be windfall income while the other two groups are more ongoing.
Initially I thought that my three biggest earners would be Adsense, Amazon and eBay and that’s why they are highlighted – its never really worked out that way – I generally suck at eBay and Amazon – but I keep the highlighting …I don’t really know why 🙂
This spreadsheet is dead easy to maintain – near the start of the month I login to all my major affiliates and check what I earned for the previous month – note I won’t have been paid yet by most of them – but I look at the earnings.
Managing Passive Income in a Foreign Currency
American readers can probably skip this section. I don’t live in the US but most of my income is made in US$. I decided early on to manage all my income for planning purposes in US$ – I have my goals in US$ I worry about whether my income is going up or down in US$. Now this is different to whether my income is going up or down in my local currency – but I can’t control the exchange rate so I don’t worry about it to much – I focus on the US dollars. Note my paypal account is in US$ – its my cheap foreign currency account really.
To come back to the currency that matters to me – ie the currencies I pay taxes in and spend money in – I have an conversion line to my local currencies. I use a conversion published by my local tax department to keep thing consistent
Tracking Income as You are Paid It
The above spreadsheet worked for several years. Yes I didn’t track expenses (they were too low to mention, as was my income) and yes I recorded income when I earned it not when I was paid it (again something I couldn’t control). But then I started earning more passive income – and I needed to add a second sheet to my spreadsheet – to record income as I was paid it (this is what the accountants call an cash basis). Certainly in Australia and New Zealand if you are a small business or individual you can chose to pay taxes only on what you have been paid – not what you have earned – that’s what I do.
So I added a second sheet to my spreadsheet it looks like this:
Although most of my income is earned in US$, Adsense then pays me direct into my local bank account i.e. in NZ dollars – where I get a payment (or make a payment) in NZ$ I account for it as such. The US$ payments and expenses have to be converted to NZ$ for my tax records.
I also do work for local clients – who obviously pay me in NZ$. We have a local tax (GST, like VAT or other sales tax) which I need to apply for local clients but not for overseas income.
My local tax department allows you to chose my own conversion rate – so long as its believable and consistent – they also publish monthly figures for major currencies – I use their’s – fewer room for arguments. Whatever you do – be consistent – for your own sanity if nothing else.
Of course if you are earning enough to earn tax you really need to start tracking your expenses – after all why pay more tax than you have to?
All of my direct business expenses are paid via Paypal in US$ including domain registration, membership site subs, backlink services (Advertising), software etc etc.
However there is also the whole other bunch of expenses which are at “home”. These include both paying my contractors (when its from a local bank account), books I buy locally, electornics and furniture for my home office, a percentage of my ISP expenses, my house insurance, my Council rates, home maintenance, power, parking (for local clients) paper and printer supplies – it adds up – and it all comes off the profit BEFORE I pay tax.
I keep records – well I keep the receipts and throw them in an envelope a month – if I needed them I could prove these expenses. (I do expect to be audited one day by the tax department – my business is so “odd” in terms of amount of overseas income and low local expenses I am sure it will blow an automatic whistle at some point).
At the bottom of the page I do a couple of things – I project my annual profit – I take the last 4 months of my NZ$ profit/loss – divide it by 4 and multiple it by 12 – thus projecting an annnual income – its useful a) to shut up those who still think I just play online and b) it gives me an idea when I will have to start paying provisional tax.
The YTD NZ$ is just my total net profit for the tax year. Our tax year end is 31 March – so at the end of March I use the blue column to total all figures for the year and for the tax return.
Online Income and Tax Residency
Tax residency is not always the same as where you live. Often it is – but not always. For example if I – a New Zealand tax resident – decided to move to somewhere with very low taxes (e.g. most of the oil rich nations) – I may be resident in Saudi or Dubai – but I would still be a tax resident of New Zealand. That’s because New Zealand taxes me on my income – wherever in the world I might live. You can in fact be tax resident in two different countries at the same time – but that’s rare.
The above spreadsheet takes me about an hour a month to maitain. I download the figures from my affiliates, I download the month’s data from PayPal and allocate it to the various expenses/income categories that I use in the spreadsheets. I look up the figures on the household bills and use a separate sheet ot itemise them and work out the % that I am claiming.
Making an online passive income from Internet Marketing is the strangest thing. When I had a job as a geologist few people understood what I did – but no one doubted that I was well-paid for it, when I worked in IT even fewer people understood my job, but they took for granted that I made money. Now I do something really simple – I put up websites, based on topics people search for, I use SEO techniques to rank my sites and I make passive income.
And even now that I make enough passive income to go travelling for 2 months they don’t understand how I make money. That’s OK – I’m used to that. What kinda of amazes me is that – they don’t believe that I make money either! Now frankly I don’t give a shite whether they believe me or not- my partner believes me – he sees me pay the bills, my bank manager is happy, my accountant is advising me to make provision for tax – but the other people – they seem to think I’m delusional.
If you are starting out this game – here’s some advice. Don’t expect anyone to be supportive or believe in your dream. In may be nice to think those closest to you will be your greatest support – in fact from what I see on the Keyword Academy forums – that’s very, very rare. In fact anyone who has a financial interest in you making some money will probably be loudest in their calls for you to get, retain or focus on, your “real job”, Or an education to the one.
I haven’t seen that many people fail in this game – but 95% plus of people who start don’t make more than $10. They don’t fail though because they never put enough work in to have even have tried. I know – I wasted at least a year – not working – at the end of it – I’d acheived very little.
I’ve been around long enough to see who succeed and who fail in this game. This is utterly subjective and totally unscientific – but I am convinced that most people that succeed with making a passive income online – do share some common characteristics:
they are bloody minded;
they don’t give a damme what anyone else thinks of them;
they are out of other options – because of age, skills, location etc they couldn’t get a “real” job even if they wanted one;
If you are worried about what your family/friends/partner thinks of making money online – get a job – this game is not for you.
Now I have some very boring things like goals and objectives and plans to achieve the same. I have business .
I had actually had doubts about whether having my own passive income business would ruin travelling for me. I have a full-time writer and a number of my sites have suddenly decided to rank just before we left home so I decided to buy a 10″ emachine netbook and keep an eye on rankings and progress while on the road.
I was worried about the practicalities though. I know quite a number of people who do this successfully – for example Kirsty from Nerdy Nomad, Matt from NomadicMatt, and Dave from GoBackpacking – but they all have a common characteristic – they are all single and travelling solo.
I’m not single – I have a partner, who having just done 10 months of contracting was definitely in holiday mode. So how is it working out – do I resent that I get up early to login while he sleeps on, that I hide out in the aircon room while he scouts out the local town? In a word – no – its working quite well. Just as I’d read that people with kids are more efficient online when they can’t be online 24/7 – I think I’ve become more efficient too. We are travelling more flashpacking style than cheapo backpackers so my need for WIFI seems to match his strong preference for aircon.
The main difference though is that I’ve lost that dreadful “tick-tok” of the count down to go back to work – the feeling that you have just used all your vacation time for the next 2 year, 8 months and 25 days. More I am thinking along the lines of – we could afford to come here for each November and still have change from what we spend at home…
Some tricks for being connected to your business on the road:
Nebooks are the go – the smartphone has proven useless really – but the netbook is easy to connect and much easier to use. Although I think its now impossible to buy a netbook that isn’t auto-sensing for voltage – you will need a plug adapter. I found finding a single plug adapter rather than one for Europe, one for the UK, one for Asia etc quite hard (but your mileage may vary) – finally getting one in duty free on the way out. My little 10″ only has a battery life of 3 hours – ideally I’d want something with twice that and a non-glossy screen (really doesn’t work well anywhere you can see the sea – the glare makes the screen unusable).
Warn banks and paypal that you will logging in from strange IP addresses. In the process of booking this trip I had several calls from credit card providers checking out if I had really been booking flights online to and from countries I didn’t live in. That got me thinking and emailed paypal – saying I was going to be travelling and please don’t freeze my account. They said it may still freeze with their automatic systems – but the would file my email and unfreeze the account if required.
Remember you may loose the netbook – it may get stolen, more likely it may go swimming on a speed boat transfer or be bounced from the roof of a tuk-tuk. Losing the netbook would be inconvenient – loosing my work, my passwords, my photos is what would be the really tragedy. I am using SugarSync to backup my files and I am using the portable version of RoboForm on a USB stick for my passwords – so that if I do need to use another computer I have those as well. (They also have an online copy for customers which is a second line of defence).