My good blogging friend, Kevin, mounts a good case for – naturally – taking on blogging as a side business.
Because I don’t monetize my blog at all, nor do I expend any effort on promoting it or driving traffic to it, I can’t really comment.
But, I can say that for my audience it’s probably not the right type of business for you.
Well, let’s backtrack a little; as I once said: “you can’t save your way to wealth“!
So, the only reason for starting a side business is so that you can build up an investing war-chest to use elsewhere.
[AJC: another perfectly valid reason might be so that you can grow it to one day replace your day job. Another reason might be to gain experience in business. All valid reasons, but not directly in the context of getting you to $7m7y]
If you do that, then you’re essentially beefing up your Pay It Twice strategy, so I have little more to add here.
But, if you do want to reach $7m7y (or some other large number / soon date), then I do have the perfect side-business for you:
If you are a programmer, go find a friend with some online marketing experience (here’s where a blogger can come in real handy!) … if you’re a fellow blogger, go find a great programmer who also likes to burn the midnight oil.
Then go and build your own startup!
If you come up with a cool idea aimed at small businesses or the self-employed, then you can build up a neat revenue stream and end up with something quite salable.
Just like the guy/s at Freckle (an online time accounting tool) who took their site from $1k/mth revenue to $20k/mth in just two years.
Firstly: SaaS (Software as a service, which just means tools that run online without needing to download software) companies typically operate on high gross margins (70% – 90%) and ‘in the cloud’ (which means that they don’t need to run or maintain their own hardware or operating systems) using ‘open source’ software (which usually means they’re free).
This means the owners make good income, with few (if any) fixed overheads, be it full-time or part-time.
Secondly: Unlike blogs, eBay businesses and many other types of online/offline ‘side businesses’, these types of internet businesses can scale; that means the sky’s the limit as to how much income they can generate.
Thirdly: They can be financed (by angel investors and, later, venture capitalists) for expansion.
Lastly: They can be sold … for a lot!
Just ask the guys who are financing Airbnb (started by just three regular guys) or Groupon what they think those businesses are worth 😉
[AJC: actually, these are not examples of SaaS businesses, but they also generate revenue, so there’s nothing wrong with going down that path, either, but you really need to be lucky to find the right ‘slam dunk’ niche]
Now, you may not be as successful as any of these guys …
… but, I submit to you, that you are just as likely to be successful in a true / salable online business as you are in any other kind of part-time business (including blogging) and that it takes just as much work.
So, why wouldn’t you try the one that has a chance of getting you to your – shall we say, audacious – financial goal?
I think you are discounting what could be made from blogging…
@ Evan – I don’t think I am. To me, if it can’t become Huffington Post – and, it’s yet to be seen where the likes of TechCrunch and Endgadget will end up – then it’s probably not a business that will take you to $7 million in 7 years (or other suitably large number / soon date).
BUT, I would LOVE to be corrected as this is clearly an area that I am not expert in. Any takers?
LOL HUFFINGTON POST? That is like saying your $7mil business isn’t worth “your time” because it didn’t turn into a $50,000,000 business.
Personally, my blog provides me with an income stream that pays my debt (no CC debt), and allows me to invest in a few other things. My blog has also provided me with the contacts to grow an even bigger business that provides a few thousand bucks a month to do what I want with.
All while providing ZERO stress, Almost zero overhead, and from the comfort of my couch while The Wife is watching terrible television lol
I am not one of those crazy get rich bloggers, I just think it could be one small income stream for a lot of people.
Even if it only provides $50 per month, the very nature of personal finance blogging should push people to read others, and take control of their personal finance world…
@ Evan – Hey, I don’t disagree with the side income potential of blogging! But, why would you waste your time on something that provides a mere side income, when you could just as easily be building an asset that provides similar income and that you can also sell? 🙂
Actually, blogs could be scaled. If you get sufficient amount of traffic and earn say $20/post, if you could find somebody to write these posts for $10-$15 you are making a profit.
In addition, blogs can be sold at 2 times annual revenues. So by blogging, you are creating an asset.
@ Blogging Bank – Thanks! Let’s see: $20 x 200 x 2 = $8k …. generating JUST enough to start a REAL business 😉
Hey, $20/article is just a start. If you can increase that income per article and generate residual revenue from articles after being posted, you could make more $. If you can increase that income to say $100/day, ( over time), you can make a nice income on the side.
I know a person that started doing just that, bought a few blogs and now his company is making $10K/month in revenues. ( I think his costs are 3K/month).
The truth is that most bloggers would blog even if they earned no revenues from it. Most bloggers used to participate in forums on the internet for years before discussing the subject that their blog is about. They would likely keep writing even if they earned no money from it.
@ Blogging Banks – Whoooaaaaa … didn’t I just hear you say “I know a person that started doing just that, bought a few blogs …”?!? 😉
Sounds to me like that person is in the BUSINESS of owning blogs. Kind’a like the difference between these two guys:
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