“I’m not really interested in making money.”Steven Spielberg
Cincinnati-born Spielberg is a pioneer of the New Hollywood Era, has been creating gorgeous and box office-breaking films since Jaws in 1975, and has a personal net worth of more than $3 billion.
Yeah, clearly he’s not interested in making money!
I don’t know about you, but I am certainly interested in making money. Making money is what enables me to provide for my family and enjoy life. Making money online is what provides me with freedoms like being able to work from home, or anywhere else for that matter.
The trouble with an online business is that your revenue projections are nothing like a traditional 9-to-5 job.
When I worked for Litehouse Pools & Spas, I had a base salary plus sales commission, which meant that I knew what my paycheck would be every other week, and those paychecks started coming with the next pay period after I started work.
When I started my own online business, on the other hand, it didn’t work like that at all.
Let’s Get Real
Now, the purpose of this article isn’t to scare you or push you away from starting your own online business — far from it. However, we are not going to lie and paint some glorious picture that promises you’ll get rich quick. That’s not who we are, and that’s not what we believe.
Owning your own online business can be everything you dream of…
- Spend your time doing something you love.
- Take control over your life and future.
- Create freedoms for yourself and your family.
- Invest in yourself and reap financial rewards.
But it also takes tremendous amounts of time, energy and self-discipline.
Or, as we like to put it, BAM!
BAM is the necessary set of ingredients that no tool or platform or coach can provide. You have to bring to the table:
- Brain: you know a lot about a niche (no need to be “brainy”).
- Attitude: positive, optimistic, you know that ups follow downs and vice-versa.
- Motivation: high level of determination, able to focus and “get it done.”
It’s your attitude and motivation that will drive the amount of time and energy you pour into your business.
It’s not easy, and it’s not quick. Trust us, we know. We’ve been doing this for over 20 years!
If you’re ready to learn more, and begin to set some realistic expectations for how soon you can begin to make money with an online business, keep reading.
Different Ways to Make Money Online
The ways that you can make money online fall into several general categories:
- Active — Selling Services
- Active — Selling Products
- Passive — Affiliate Commissions
- Passive — Advertising Earnings
As you might imagine, each method has its strengths and weaknesses, earning potential and investment demands.
Selling Services, for instance, can be quite lucrative, particularly if you have highly sought-after skills and experience. But it doesn’t scale — you only have so many hours in the day to sell.
Selling Products, on the other hand, can scale well, but requires more time to develop as a viable offer.
Affiliate Commissions and Advertising Earnings might see initial revenue faster, but require high traffic levels to make the same kind of money as more active techniques.
While there are variations and combinations of these methods, we’ll focus on these main categories so that you have a solid understanding and set of expectations for your new online business.
Why not start by printing out our free Online Business Monetization Worksheet. As we work through these tactics, use it to record your ideas and map out how you’re going to create a truly profitable business.
Go ahead — print out that worksheet — print multiple copies if needed — and then proceed.
Active — Selling Services
“To make money online, you need one of two things (both are even better!): tons of traffic (to make a decent income from ads, for instance) or trust (to do just about anything else: sell product or a service, or do affiliate marketing).
Either one takes time to build, no matter how you look at it.
When I first started TrafficGenerationCafe.com, I gave it my all in terms of building both traffic and trust.
So much so that this is what Dino Dogan, the founder of Triberr.com, said about my blog in those early days:
Even with a robust audience quickly building around Traffic Generation Café, it STILL took me about 6 months to start seeing income from affiliate sales and about the same amount of time to start selling a service — blog audits at the time.”
~ Ana Hoffman, TrafficGenerationCafe.com
The beauty of a monetization model that includes selling services is that it’s something you can potentially sell from Day One. If you already possess a skill and experience that others will pay for, this is a great place to start.
While you’re working on building traffic, ramping up passive revenue streams and developing products, you can keep the money flowing in by selling your time and expertise.
The key to being successful at selling a service — or selling anything — is to identify the pain that your service solves, and communicate that.
For instance, if you were writing copy for a social media management service, you might say:
Has it been weeks since you last tweeted?
“To make money online, you need one of two things: tons of traffic or trust” – Ana Hoffman
Does it seem like it takes forever just to come up with something to say, only to get no engagement at all?
Don’t you wish your business could benefit from Twitter like everyone else?
It’s not about the number of tweets or posts per day — that kind of detail can come later. It’s about the pain your ideal client is experiencing, in this case, wasted time with no results.
As you begin to think about what your online business is going to look like, who are your ideal clients, and what pains are they experiencing?
You will see on the worksheet that there’s an area for you to begin thinking about and documenting what your target customer looks like. In other words, the kind of individual or business that you would love to see as a customer, and have a reasonable expectation that you can attract them.
Pick a name for this persona and begin to fill in some details. If you want to target more than one type of customer, that’s OK, just print out as many copies of the worksheet as you need.
Some of the fields you might not have a handle on, while others may not be relevant. Skip those and focus on whichever make sense for you.
The most important descriptors are the these:
- Strengths — what is this person really good at?
- Weaknesses — what does he or she struggle with?
- Fears / Pains — what’s driving him or her to seek help?
And then, what’s your desired goal or result?
Taking the time to think through these attributes will help you tremendously in your writing and marketing, as well as your long-term business plans!
It will also help you to identify the best service(s) to offer. What are your strengths, to match the solutions your target customer is desperate to find? It’s finding that point where needs or desires = a solution your particular skills can offer which will help your services really sell.
Active — Selling Products
“One of the biggest misconceptions for entrepreneurs is that money will magically start rolling in from day one. The reality is that it takes a lot of time, effort, and hard work to make a living off your business, let alone build a successful and thriving company.
I’ve founded/co-founded 5 businesses, and while each was different, there were similar themes. First is the 6 month window when the planning, preparation, word of mouth, and build out is happening. Second is the next 6 months when your sales process really takes shape. You’ve tested, tweaked, and continued to formulate next steps.
During this time, don’t expect high dollars to roll in, unless you launch with an established platform, following, client base, or well-known name.
That being said, your first year will be the hardest, but it’s not smooth sailing until year 3. That is, as long as you’ve laid the proper groundwork. I’m a firm believer in doing the tough stuff now that sets you up for success for years and years to come.”
~ Rebekah Radice, RebekahRadice.com
While, traditionally, products are thought of as tangible objects one might purchase from the corner store, the Internet has brought us a variety of digital products that online businesses are uniquely suited to deliver.
- Software as a Service (Saas)
- Membership Communities
While all of the above require at least some development time and effort (compared to near-none for “Services”), products scale better.
Why? Because if it’s just you, there are only so many hours in the day that you can book and sell to clients.
An eBook or printable, however, can be sold again and again once you have created it.
For instance, last year I put together a series of calendars and worksheets to help bloggers plan out their editorial calendars for the coming year. It took a weekend to create and then all I had to do was promote it to start selling them.
“…your first year will be the hardest, but it’s not smooth sailing until year 3” – Rebekah Radice
That planner also serves as an example of how digital products earn revenue in proportion to their development time.
It’s been nice to sell a couple hundred planners for a weekend’s worth of work, but that’s hardly a replacement income.
But the more digital products I have, the more sales revenue I can generate. And if I spent more time developing the product, like an extensive online course, the more I could charge each member.
On your worksheet, give some thought to how much you think you’re going to charge for your product(s), and how many you’ll need to sell to earn your desired income level. Also estimate how long you will need before your first product will be ready to sell — that’s going to represent an initial gap in income.
Solo Build It! members gain access to specialized training that facilitates the creation and selling of digital products!
Passive — Affiliate Commissions
“It took me about 6 months to make my first cent blogging.
I earned the cash through network marketing.
As for building a full-time income, it took me about 3 years of profiting through multiple online income streams like freelance writing, sponsored post revenue and affiliate marketing revenue.”
~ Ryan Biddulph, BloggingFromParadise.com
For some, thoughts of creating an online business come complete with sipping Mai Tai’s on the beach while affiliate sales roll in effortlessly. (And Ryan Biddulph of BloggingFromParadise.com does little to dissuade from that image!)
But the reality is that it can take years to get to that point. For two reasons.
First, selling other people’s products for a small commission is relatively easy, and therefore, you don’t usually receive a high commission. Most affiliate programs pay just 15-30% bounty on whatever is purchased.
So you will need to generate a significant volume of traffic to realize good earnings.
“As for building a full-time income, it took me about 3 years of profiting through multiple online income streams…” – Ryan Biddulph
Second, because you’re referring someone else’s products, sales tend to happen at a slower rate. Instead of buying from “me,” you’re buying from someone I happen to recommend.
That puts an additional layer or step between the buyer’s ability to Know, Like & Trust, which can result in fewer sales.
Therefore, with affiliate recommendations converting less and paying less, you need far more of them to compensate. Which, as we’ve already seen, requires high levels of traffic. And of course building traffic requires time.
Are there brands or vendors in your niche that offer affiliate programs? If so, note them on your worksheet.
Take careful note of each affiliate program’s payout policy, too. Most affiliate commissions are paid a month or two after the sale, which creates another initial gap in income.
How will you cover that gap?
Passive — Advertising Earnings
“It took 2 years. One year to build the audience. Another year to start monetizing and eventually replace my full-time income.”
~ Jeff Goins, GoinsWriter.com
The final method is to use advertising to generate revenue.
This is, perhaps, the easiest monetization method of all as it requires no direct information-giving or sales on your part. You don’t have to talk about or promote the ads in any way.
Simply place ads on your site and wait for readers to click on them.
If you use a service like Google AdSense, the ads will dynamically change based on your site content or the individual visitor’s past browsing experience. This level of customization tends to result in a higher conversion rate on ads.
You can also opt to work directly with advertisers in your niche who may want to pay to reach your audience directly.
“It took 2 years. One year to build the audience. Another year to start monetizing and eventually replace my full-time income.” – Jeff Goins
But note that ad-clicks pay even less than affiliate sales — sometimes just pennies per click — resulting in moderate income levels.
Which means, like affiliate sales, you’ll need high traffic volume to make it work.
Pulling It All Together — What’s Your Plan?
Write down all of the above ideas and estimate some timeframes. The goal is to help you put all of the pieces together into a cohesive plan.
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