From $0 to $4,000 per month in 14 months – without quitting your job
I was curiously running some numbers this morning and I’ve decided to share the results.
If you don’t know already, I’ve sold my web application development business and I’m now in investment mode.
My next simple plan is to start acquiring sites to build a different – diverse portfolio of investments and new revenue streams. My thought was to throw $10k at 4 sites to simply start making $4k a month – a livable income, but I have a livable income already and some, so instead I might acquire smaller sites and more of them to achieve the same effect, $4k per month revenue.
However, I’m going to do it in such a way that almost anyone who has a fulltime income can do – if they can find some disposable income every month to set aside to invest that is.
Why? Well finding sites that are in the $10k range isn’t easy, there’s not as many around as there are $1k sites, so it’s slow going and slim pickings. Other reason is that I’d like to acquire a wider range of sites and see if we can’t network a few together, do some link building campaigns and build the traffic and revenue on them. If we can we might sell (flip) a few of them along the way down the track to speed up some revenue growth.
Ok, so here it is - the plan from $0 a month to $4k a month in 14 months.
What you will need: An endless stream of money, some internet skills and a server.
When I say an endless stream of money, you need to at least be able to set aside $250 a week - $1k a month, that’s like $35 a day, every day.
If you can’t do that, then you’re going to take a whole bunch longer to get there, also, a starting bank of $5k – which isn’t all that much cash, borrow it, steal it, sell something to get it, I don’t care… ok well don’t steal it, but just get it.
|
Month |
Investment |
New Revenue |
Compounded |
Bank |
|
1 |
$ 5,000 |
$ 500 |
|
$ 500 |
|
2 |
$ 1,000 |
$ 100 |
$ 600 |
$ 1,100 |
|
3 |
$ 2,000 |
$ 200 |
$ 800 |
$ 800 |
|
4 |
$ 1,000 |
$ 100 |
$ 900 |
$ 1,700 |
|
5 |
$ 3,000 |
$ 300 |
$ 1,200 |
$ 1,200 |
|
6 |
$ 1,000 |
$ 100 |
$ 1,300 |
$ 2,500 |
|
7 |
$ 3,500 |
$ 350 |
$ 1,650 |
$ 1,650 |
|
8 |
$ 1,000 |
$ 100 |
$ 1,750 |
$ 3,400 |
|
9 |
$ 4,400 |
$ 440 |
$ 2,190 |
$ 2,100 |
|
10 |
$ 3,100 |
$ 310 |
$ 2,500 |
$ 2,500 |
|
11 |
$ 3,500 |
$ 350 |
$ 2,850 |
$ 2,800 |
|
12 |
$ 3,800 |
$ 380 |
$ 3,230 |
$ 3,230 |
|
13 |
$ 4,200 |
$ 420 |
$ 3,650 |
$ 3,650 |
|
14 |
$ 4,600 |
$ 460 |
$ 4,110 |
$ 4,000 |
So the idea is simple, take your $5k, spend the whole $5k on a site that’s making $500 a month – shouldn’t be too hard, most sites sell for 10x profit. Or buy 2 sites at $2,500 each, either way, spend your $5k to make $500 a month.
Next month, take your $1k you’ve saved, and acquire another site making around the $100 a month mark.
The next month, do the same again, take your $1k and buy a site making $100, BUT, you should have in the bank $1100 from the last 2 months of revenue from your existing investments.
Take that cash and buy another site, so on your 3rd month you’re spending $2k on sites, not the monthly $1k.
Next month, same again, buy a site with your $1k. By this month you should be making $900 a month from your investments, and the end of this month you should have had $800 from last month, so next month you will have $1,700 in the bank to spend.
So next month pony up some more dough and drop your $1k + your investment revenue, with some luck you should have some growth by now in the sites if you’re working on them (which you should be), so this month – month 5, drop $3k on new sites.
This will leave you now making $1,200 a month in revenue. I think you get the picture now.
So in a little over a year, you should be sitting on $4k a month. With some luck, if you are working on the sites during the time you should be able to build more revenue by increasing the traffic, try and acquire sites that complement each other so your overall traffic can grow.
By the end of all this you might have over 15 sites easy, but, along the way there’s always the option to sell some of them or consolidate them down to less, just as long as the revenue isn’t effected.
A good strategy might be to pick 2-3 niches, pick up a forum for each that has users and traffic already, and work on picking up sites that would be relevant to those forums so you can leverage the sites to drive more traffic to the forums – thus building more members and more returning visitors, and in turn hopefully more revenue along the way.
May 30th, 2008 at 9:07 pm
Hello,
I’ve started a plan like this before but my issue is fraud. Many sites make 1/2 (or less) of what the seller states and the majority don’t make any money at all.
What’s your process for buying sites? I’ve had terrible experiences with several FSBO sites. Thanks!
JT
May 31st, 2008 at 9:23 am
Yeah, you really need to do a LOT of research, and calculate the revenue based on what you think you could get it to make based on traffic, rather then what they say it makes.
I really dont like buying sites that have low traffic and make their revenue from sales, not ads. If they only make sales then the sales figure could be fake, and if it is, there’s not enough traffic to make the product work.
Better off buying sites with good traffic, because traffic is something you can measure using external tools without relying on the person selling to provide legitimate screenshots of. Check all the backlinks, google the name of the site and its actual domain to see what people are saying about the site, check the alexa and compete data.
Also check out what price the clicks are worth for the style of adwords ads that would be on the site, estimate a low click through rate and based on your own traffic research you should be able to work out a safe estimate on revenue.
End of the day - traffic is king, if the site has traffic and has a history of strong traffic on things like alexa, then you can’t go too wrong, there’s lots of ways to monetise traffic, its the sites with low traffic and niche products that will get you - like ebooks etc.
oh and in saying that, even tho free hosts, proxies, warez forums etc may have traffic, it’s poor traffic, and its an unstable site to own - your host could shut you down at any time. pick a nice site that’s legit and has future potential.
June 1st, 2008 at 4:13 am
Thanks for the response, Todd.
The only problem with Adsense based sites is that you’re putting all your investment into a single income source which, trust me, can go poof in a moment’s notice.
I have a friend who sells 3 different eBooks and nets about $4,000 per month. Of course, he built the products and the sites himself. eBook sites scare me but I think they’re more stable if you can find the right ones.
I do measure traffic and that’s where I usually catch a seller in the scam. That and they want to be paid via a wire transfer or Western Union only.
Do you search sitepoint mostly? Or do you use other “website for sale by owner” sites?
June 2nd, 2008 at 9:17 am
Agreed, all your eggs in 1 basket is an issue, its good to use 2-3 different revenue methods with a site if possible, but, with multiple sites earning revenue from different methods, your loweing your overall risk.
if you had 1 big site with 1 big adwords account then yeah, your in a shitty position. if you had 10 sites, half on adwords half on adbrite., you at least know that adbrite or adwords can make revenue for you, and if one drops you you can switch the rest to the other system until you find some different ad programs that will work.
Yeah, ebooks are tough to get going, unless its a very good book and you have a great site / community promoting the book (like freelanceswitch.com and their ebook) your going to have to spend a lot of time and effort to make sales.
Don’t get me wrong, i think they can sell, I just don’t trust the people selling ebook sites that are 2 days old and want an ‘ugent sale’.
Measueing their traffic is a deffinate must, also check their backlinks and i really like checking their site on archive.org - see the history of the site, the ‘domain’ could be 2 years old and some other site was there before the new site they are selling… and yeah escrow is a must.
And yeah, i browse sitepoint, dnf, digital point, warrior and a few others, sitepoint and digital point are the main 2 though.