1. steal potential revenue from publishers.
2. steal potential sales from advertisers
3. ultimately put both small publishers and small advertisers out of business, leaving the person ad-blocking with less quality content choices.

Traditional publishers are already in danger, unless they adapt. Now, there are a lot of good bloggers I’ve come across who are on the verge of quitting. That means we all get cheated out of good content in the long run.

Consider this: a guy I knew, who worked for a large book publisher, told me back in the mid 1990s that many of the best books ever written will never get published because there’s no financial benefit for publishers. He spent his own hard-earned money to publish one book per year – a book his employer turned down but allowed him to publish.

Do we want good online content to go unpublished as well? Why should you get free content without expectation of giving something back in return, if just your eyeballs for, say, a banner ad?

So think twice before you ad block, lest we be left with blog spam and ancient scraped content.

In the meantime, bloggers should consider the advice of Brian Clark (Copyblogger), in his new free report, Teaching Sells (MP3 and PDF forms). I’ve listened to the MP3 three times today, while I blog. It’s worth every minute – especially if you’re fearful that readers will ultimately all block out the ads on your site, and that your freelance income will continue to ebb and flow. You can have a career online but it shouldn’t wholly reliant on a few cents per ad click.

Whether you’ve decided to pursue blogging as a full-time career or as a supplement to other online revenue, the fact is that when you work for yourself, gross monthly income will fluctuate for most people. The trick to dealing with this is to not try to live on the expectation of top monthly income coming in every month.

Strategy

The first step in dealing with the ebb and flow of gross income is to approximate average monthly income based on your previous year in business. If you can’t do that, try for six months.

Besides fluctuations, you also need to factor in taxes and emergency funds. Some people like to keep 3-6 months of operating costs on hand at all times. Except, of course, when there’s an actual emergency.

So if running your blogging business, paying bills, and setting aside a suitable amount of tax money costs you, say, $1500 per month, and income fluctuates between $1200 and $2200 per month, then you obviously do not want to live off $2200 each month.

Sounds obvious, doesn’t it? But the temptation is there, if you’re just starting out as a freelance blogger. You feel invincible, even that the money supply is infinite. Trust me, I’ve been there, having been a contractor/ freelancer for much of the past 20 years, and actually being out of work almost as often as working. My mistakes were doozies. If you have dreams of blogging full-time and want to quit your job soon, you need to drill this fundamental idea into your head.

Ideal Situation

Ideally, if you can manage it, live off of the lowest monthly income you’ve earned and put all extra revenue into a safe, relatively liquid interest-bearing investment such as an online savings account. In the above example, that means you’re living off $1200 per month, every month – not $2200, and preferably less than the average of all months. So in the months that you gross $2200, you have $1000 to put into savings. While there’s nothing wrong with putting all of that into one savings account, if you feel you may be tempted, set up a separate bank account for taxes. When it comes time to pay income, property and other taxes, you’ll have earned some interest. And you’ll have emergency funds as well.

This is of course an overly simplified treatment of how to deal with fluctuating income that comes from being a freelancer or entrepreneur, but if you get the gist of it and come up with a method that works for you, you’ll be fine. Provided you stick to the plan. Consistently living and operating on the least amount possible is a core principle of bootstrapping a business.

Over at Bootstrapper, I have the first of several online business case studies: Bootstrapping an online information business. In that post, I detail how you can set up a video how-to site with little capital – but more from a business perspective, not so much a technical perspective. However, I do list numerous tools you’ll probably need – many of which are free, and others you can purchase when revenue starts to come in. There’s also a reference to Evan Margolin, a dance teacher in San Francisco whose SalsaBootCamp video site membership went up from $9 to $37/month and still pulls in $20,000/m for him. Not bad. Now, if you’re looking for a comfortable living, you need to find something you can present in how-to video and/or article format and then find the right buyers. And you can do it without spending a lot upfront, slowly increasing your toolset as funds allow.

The Potential

In the case of Margolin, he has just over 500 subscribers. Let’s look at some other examples. A number of marketing studies sites offer membership that ranges from $37 and up per month. One, I think, is about $500/yr. Imagine, if you could find just 100 members, that’s $50,000 per year. Several SEO sites offer premium content memberships, one of which is about $39/month. A couple of SEO sites offer access to either private forums or to tools/ scripts at $100/m. Just 50 members generates $5,000/month. However, some of these sites have 100-300 members.

Now, maybe those are out of your skill range, so let’s look at more examples. I’ve come across a few sites that for $97/mth offer access to hundreds of limited-edition, original articles that you can use in any fashion you want. Each release allows only, say, 200 members. If they’re actually selling out membership to the point where they’re offering new phases, then they’re making at least $97 x 200 = $19,400/m. If they’re then selling another round of 200 memberships, well, do the math.

So if you are a skilled writer that can cover a number of topics well, with proper research, and you work fast, you could presumably set up a similar service. You could partner up with other writers, to cover a range of topics. But maybe you want to keep the effort down to keep the quality up, limit the number of memberships and charge $49/month. If your articles are good and cover the topical demands out there, then you can probably find buyers.

However, this still doesn’t address the average person who wants to earn a living online. That brings us back to the how-to. If you can explain how to do something, either in text or video format – preferably the latter, with a bit of text – you can probably find buyers. And if there is enough interest and you can keep producing text and/or video content, you might even gain a few subscribers. If you only want to produce one-time content, then you might consider a single e-book or video set.

Revenue Streams

Or you could mix up your revenue streams:

1. Blog for yourself – earn advertising and affiliate revenue.
2. Blog for others – earn either a flat per post rate or a percentage of their monthly revenues.
3. Write reviews – earn a flat fee per review.
4. Build and flip sites (websites or weblogs).
5. Buy an income-earning site.
6. Buy/ register, hold, and flip domains.
7. Offer free teaser reports as an enticement to visitors to purchase an ebook.
8. Offer free teaser videos for your how-to series.
9. Offer access to tools, reports or reusable content on a monthly subscriber basis.
10. Offer services on a project or monthly retainer basis.

The beauty of working online, besides the obvious, is that you can use tools like PayPal or Google Checkout to handle the payment processing. The integration is relatively easy and allows you to focus on the content or services.

Got a skill or service that can be offered online but not sure how to do that? Feel free to drop me a comment here or use the contact form. With your permission, I’ll try to do a no-cost case study on these pages. If not, then my reponse time increases. I may not always have answers, but I will respond to you as promptly as time permits.

A while back, I persuaded him to take up an interest in blogging about health. Except that I  haven’t had time to develop his blog for him, and he hasn’t had time to learn about promotion, etc. I’ve started and scrapped his blog a few times now. And maybe it’s my own poor health, but i seem to have an aversion to working on his blog. (Yes, I have loads of guilt about this.)

The net result, after almost two years of him waiting for me is that he went to a local seminar a few days ago, run by some snakeoil hucksters. They must have taken down his phone number, because the next day, my father emailed me and said they gave him “an offer he couldn’t refuse.” Instead of asking for US$4200, they offered him their online business package for $3500. He bought it.

Except that their online business package consists of some articles and a dozen or so screencast videos. No website, no content nothing. No assistance. Just how to build your site (use “meta tags”!!!), how to find drop shippers, and how to get traffic to your site. They left out the most important aspect: how hard it can be to have a successful commerce site.

Needless to say, I was peeved when I heard this (I’m on the verge of being a website/ domain broker for various people, and he knew this but didn’t consult me because he thought I was busy). Actually, I was more peeved at myself for not helping my father with his blog and blame myself for his spending that money. Half of the information in that info pack is probably wrong (meta tags? – give me a break), and all of it is free online, somewhere. Okay, if you don’t have the time to spend (took me two years) to learn everything, you may think it’s worth it. My father even told me in late 2005 to create my own info pack to sell to newbies. I considered it, but not for a $4,200 price tag.

Thing that really bugs me, though, is that my father is a busy man, despite being retired. He may think he saved $700 by spending $3500. But I could have taken that $3500 and bought my father income earning websites, or a few nice domain names on speculation, and he would have made money far sooner than he ever will with that bullcrap package of info.

Here’s an example. Let’s say you have $3600. You could buy a website income with a site earning $300/m that is selling at a 12-month multiple. Hold it for 6 months and you’ve earned $1800. Sell it for $4000, and you’ve earned an extra $400, for a total of $2200. That’s a pretty good return, provided that that income comes with very little effort on your part. If it takes time away from other income-earning activities, then you have to rethink your strategy. Maybe you’re better off being a domain mogul, which requires trend smarts and great analytical and speculative skills, but takes far less effort than trying to make a living with a new website.

So to those of you planning to make a full or partial income online, please don’t spend ~$4K on an info pack. Drop me a comment, tell me what you would really like to do, what topics you really know a lot about or enjoy enough to learn. Then I’ll give you some suggestions on what you might try. And it won’t cost you anything.

Given the amount of work I put into each, the starting bid prices are pretty cheap. Throw in my free advice and I’ll be bold enough to say you’ll get a bargain. Even though a couple dropped in the last Google PR rollout, a minimal of effort will raise the PR back up, and more effort could produce a nice blog income. One domain in particular has incredible potential for an affiliate product site. So go have a look. You might be surprised at what you find. And feel free to drop any questions on this post’s comments section, or over at the Performancing listing.

I’ve added 3 more circles, for a total of 8. The diagram is below, and shows the wide array of revenue combinations available for bloggers. No one person is likely utilizing all of the options, at least not on a single blog – that I’m aware of, anyway. The diagram is pretty simple, but you are welcome to reuse it if you like (please copy instead of hotlinking). Click on the first to enlarge. The original diagram from 901am is after the new version – which you can republish as well.

The point is that without a mortgage to worry about, you are earning real income. Now, when you sell the house, you’re likely going to sell for at least what you bought it for. So you get back your original investment plus some rental income. I don’t want to get too deep into a real estate discussion, but if you see where I’m getting at, let’s continue.

Stock market investors do it too. Property is a big commitment. Stocks are not. If you put that same $100,000 into a stable blue chip stock or mutual funds that pays regular dividends, you’ve bought an income. If you lose a bit on the value when you sell your holding, it’s a tax write off. If you gain, add that to the dividend earnings. You come out ahead, and get back most or all of your investment.

So how does this analogy apply to blogs and websites? Well, building up a new blog is a lot of work, and maybe you don’t want to be a domainer. So why not buy an established blog [Performancing]. There are lots of zombie blogs of good value. The owner hasn’t posted in a while, but the site seems to enjoy some traffic, has a reasonable PR (Google PageRank), backlinks, is indexed regularly by the engines (including Technorati), and most especially, enjoys a monthly income from ad revenue.

As with real estate properties that you buy up, fix and resell for a higher value, the ideal candidate sites (websites and weblogs) are those that have been improperly monetized. You may find it easier to increase the monthly revenue of an existing blog than to get your new blog earning any money at all. Consider these points:

1. Buy a site earning steady revenue over at least the last three months if not longer. Typical cost of a site is 12-18 months of revenue, plus premiums for the PR, if it’s high, and/or the domain name or any software.

2. Keep the site for X months and build up its ad revenue using any or all of the following:
1. More adsense earnings.
2. More affiliate revenue.
3. Text links or banner ads.
4. Amazon
5. Chitika
3. After X months, when the monthly revenue is up, even if you sell the site for what you paid, you’ve made a bit of monthly income. Domain registration and hosting costs are fairly negligible these days.

Don’t forget to keep existing regular readers in mind. Don’t over-monetize, and roll changes out slowly. Each site and niche will have its own ideal advertising methods. That’s something I’ll try to talk about in the future; I don’t think I know enough yet.

[For thoughts on choosing a site, see my Performancing article 5 tips for buying websites, also linked above.]

Example:

• Buy a site for $6,000 (12-18 months earnings) that has earned $500/m for at least 3-4 mnths (i.e., income is steady so far).

• Keep for six months, earning at least $500/m, that’s $3,000+ in income.
• Sell for $6,000 (if you didn’t increase rev), gaining $3,000.
• Sell for $12,000 (if you doubled rev), gaining $6K + $3K plus whatever extra ad revenue above $500/m that you earn.
• Subtract the cost of maintaining it. If you write your own posts, there’s only hosting and domain costs, and maybe be escrow fees during the purchase.
• If the site had momentum from, say, one post per day, you could probably get away with three per week, or hire someone to help write.

Now, that’s not to say you have to spend $6,000 to be successful at buying a blog income. However, if you’re just starting out, don’t buy a site with no income else you’re back in the same boat, and in danger of having too many sites.

If you buy a site earning just $25/m, to start, do you think you can boost that to $50/m and sell it for a profit? You’ll have to decide whether you want to hold a site or whether you’re buying to flip. Holding means paying maintenance fees. But either way, this method of earning a living with a website may be much less effort than starting/ continuing your own blog.

In a way, it’s sort of like trading stocks or investing in real estate. Not everyone can make money from it because it does require some speculation and research, but if you’re tired of blogging or want some way to supplement your online income without a great deal of time, give domaining some consideration.

For me, domaining is interesting because I have a love of language, semantics, word origins, etc. I’ve been doing my own keyword research for the last few years and building a “web corpus” – a list of unique words found online, which might be as large as a half million words or more.

Domaining uses more than one strategy to make money, including parking (CPC ad click traffic), redirecting domain traffic to an existing monetized website, flipping more expensive domains, or buying hundreds or thousands of domains in bulk and turning them over for a small profit per domain.

For example, if you own a thousand domains and each one is parked and earning, say, $0.10/day on average, that’s $100/day or about $3000/mth. That’s not bad if you automate the renewals and park free, considering how little domains cost per year these days. If you use a bulk domain reseller account to purchase, you might pay about $7/domain (all new). So your costs are $7,000/yr but you’re grossing $36,000 per year.

Obviously, under this strategy, you don’t want to buy all the domains at once, as that’s an incredible commitment financially. I plan to spend the next 2-4 years bootstrapping my domaining revenue into an ever-growing portfolio. I’ll report back on my findings and any techniques I learn. If you are interested in domaining, Aviva Directory has an article that describes some domaining techniques for newbies, what tools to use, and how to go about financing your domain investments.