Last week I posted about a business forum that I quite liked (not as a user, but as an investor)

It needs some work, but it’s fine. Only issue was that he bought the site like 9 months ago for WAY too much ($11k+) and is now trying to sell it again for even more, a starting bid of $12k and a reserve of $35k! I said in my post that I only valued the site right now at around $5k.

And I still stand by that, and I think other people agree, cause the general consensus was that $12k was too much, forget the $35k! So yeah, the auction ended with no winners, the guy either needs to keep it and monetize it like I said in my post, or he needs to come to grips with the reality that he overpaid, bigtime, and if he’s keen to get rid of the site it’ll be at a loss to him.

But yeah, overall I like it and I’d defiantly by it for $5k, maybe a little more. Oh, I think he got sold on the ‘domain is premium’ bit, he thinks’ it’s worth heaps, and it may be worth something, but it’s a .net to start with, so… yeah it’ll maybe weight the price a little higher, but still not near his $35k BIN…

I might open a dialoge with him and see if we can’t negotiate a fair price.

Digital point forums seem to have had a major issue today, don’t know about you but when I try to access it, all I get is ‘Database error’…

Good luck to them!, but on top of that sitepoint is down for maintenance!…

So my usual morning of having a coffee and checking out what’s for sale around town is dead in the water…

I might have to actually do some work… dammit.

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.

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 3^rd 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.

There’s a forum for sale over at SitePoint, it’s actually a good forum, the url is: http://www.businessforum.net/

It’s making $0, it’s pulling over 500 uniques a day, 250,000 page views a month.

But his starting bid is $12k, and his BIN is $35k.

The reality here is that it’s over priced; it only has 7,000 members, 5,000 threads and 24,000 posts. It’s a bit, but not a lot for a 2 year old forum, so it’s been kicking along and slowly growing, but it’s not shit hot and taking off or anything. He’s put a lot of work into it, but it needs a lot more to get it really going, regardless, it is a nice foundation to start from, so it’s defiantly worthy of purchasing… but not at $12k-$35k

I think the main problem here is that he bought the site 7 months ago for $11,600… back then it has 4,000 members, 14,000 posts.

He overpaid 7 months ago for it. And he’s trying to sell it for more now, because in his eyes from the price he bought it for it’s now worth more.

The reality is that he overpaid, back then it was worth $3-4K, and now its worth about $5-6k tops.

There’s no revenue, there’s only 500 uniques a day and only 7,000 members. To really get this forum kicking and making any kind of money, it needs 20 hours a week put into it and more marketing cash invested into it, in 2-3 months you could if you’re lucky kick it up to 1,000 uniques a day, but even then from ads alone you would be hoping to bring in $500 to $700 a month. You won’t do it from adsense, you would be doing most of that revenue from private ad sales.

So after expenses, and all your time, you’re not making much. To keep it going you would be easily spending $200 a month on marketing, let’s say you profit $500 a month (after that 3 months of heavy marketing and time spent), and then you’re looking at a site worth $5k (10x revenue) probably more because there’s revenue and growth and a long history.

Still, not worth $12k minimum, if I was him, I’d spend $1k+ on promotions a month and start putting ads on the forum, sell ads for 3 months, get some revenue in and then sell, at least then you’re showing the potential buyer of the site that the investment is going to be worth it.

On top of my server moves, I’ve also gone through the motions of upgrading legacy apps, as well as this blogs wordress and phpbb3 forum.

I don’t know what version of WP I was running before, but this new version is pretty cool, better design and interface, nice and clean, and I’ve upgraded phpbb from 3RC3 to the latest version, 3.0

This re-iterates what I was talking about in my last post, the more apps and sites you have floating around the more sites and systems you have to mange, update and maintain on a monthly basis.

All of my sites are run on some kind of underlying application, be it 3rd party or custom written, and all of them require upgrades and maintenance to keep them running efficiently, and to make sure they aren’t venerable to attacks or hacks.

Spending this time is fine, as long as there’s a benefit, if you have all these sites out there that don’t have any traffic and you’re spending time upgrading them then you’re only taking time away that’s better spent serving other sites – you could be spending an extra hour a day promoting your more profitable sites while your screwing around with un-required maintenance.

Really look at all the sites your running and have a good think about what’s up there of value to you, and what’s just a waste of time and resources, kill them and maximize the time you spend to make your main sites more profitable.