Lately, I’ve had the opportunity to sit down one-on-one with Michael Dunlop, founder of Income Diary, and ask him about how he makes six figures a year online.
Obviously it’s important to have an audience online and so in our first session we discussed the traffic strategies that Michael uses to attract 100,000s of visitors to his blogs. While I encourage you to read all ten traffic tips, the overwhelming message was this: simply write amazing content.
For our second interview, Michael wanted to talk about the bigger picture: how do you turn a single successful website into an online empire that you can sell for a fortune?
What You’ll Learn:
- Why invest back into your websites
- The key to ‘flow’ in the growth of your online network
- How Michael’s brother helped him discover the power of partnerships
- How to prepare your online empire to be sold
Note: if you would like some more background on how Michael Dunlop got to where he is today before we begin, take a look at “The True Story of My Overnight Success”.
Starting Your Online Empire
“When I think, I think huge. But then I think, ‘Where do I start?’”
Every empire starts with a single building and every big online business starts with a single website.
Michael explains, “When you’ve got your core thing going really well, then you can start to look at different industries. Your next sites are only going to be successful based on the success of the first one.”
Invest back into the Business
As a child, Michael Dunlop observed how much his self-employed father had to pay in income taxes (about 50%). He also couldn’t help but notice that when his dad sold his company, the capital gains tax was much, much lower (about 10%).
That’s why Michael invests $10,000’s back into his companies. He has to pay less in taxes now and his websites, products, and customers reap the immediate benefit of his investment.
If you’re wondering how you could invest in your online business, Michael suggests, “New website design, article writers, software development, graphics, and buying other peoples websites.”
Long-Term Domain Names
“I would never build a website based on my name because then I could never sell it – and that’s where the money is.”
Using your own name as a domain name may be a good idea if the site’s for personal use, but it’s the worst thing you can do if you want to build an online empire. Since the site’s brand revolves around you it will be difficult to bring other people on board or sell the site down the road.
“The next big mistake people make is settling for ‘.co’ or ‘.uk’ domain. Everyone wants the ‘.com’.”
A ‘.com’ domain is familiar, versatile, and international. According to Michael, having a ‘.com’ “makes a big difference when you’re selling your business.”
Image courtesy of Jjjohn
Growing into an Online Business
“I prefer to compete against myself rather than someone else.”
Michael had some tough breaks early on in his online career. First his site was hacked, then he got banned from Adsense.
Through it all, he learned a pretty simple lesson: “You can’t keep all of you eggs in one basket.”
Today, Michael owns several successful websites across several niches.
Expand into Related Niches
Michael’s first website was devoted to graphic design. From there, he created sites that in the niches of web design, then online business, and now photography and more.
There’s flow at work here. The graphic design community Michael fostered originally was naturally also interested in web design. The web design community was naturally interested in making money from websites (online business). The photography community has ties to both design and business.
Michael gave me another example of how it could work for someone else:
“If you’re going to start talking about your health, maybe talk about a small niche about it, and after you’ve done well with that, you start another niche blog on a different health topic. You then develop a big blog and you send the traffic from those two little blogs, to the big blog where you’re talking about health more generally.”
When planning your online empire, think about how you could branch out from your first niche to more areas that are valuable to that community. That way, you’ll guarantee a built-in audience when you launch.
Expand Beyond Websites
An online empire can and should be more than just websites.
Michael teamed up with a software developer to make PopUp Domination, which enables website owners to customize popup boxes and increase their conversion rate. PopUp Domination has gone on to be a huge success for Michael, generating over a million dollars in revenue.
The right product can be sold across all of your websites – and it goes beyond even that. If all of Michael’s websites were to disappear tomorrow, PopUp Domination would still be being sold on the websites of others all around the world.
“I wanted a brand like Virgin. I thought it would be nice to have my business all looking nice and tidy when I eventually sell it as an asset.”
Michael’s first series of websites (the ones that were hacked) all had the word ‘Shout’ in them. Today, he’s got a series of products with the word ‘domination’: SiteProfit Domination, Blog Creation Domination, Traffic Domination, and Web Domination.
Michael told me that, “by having a well-branded network, the perceived value of the business is greater because it all comes together as one.”
The Power of Partnerships
Initially, Michael was the driving force behind all of his websites.
Today, Michael is much more focused cultivating partnerships and providing consultation while someone else takes a more active role:
“I love to build things, create things and get involved in the beginning, but I soon lose my interest. That’s a personal flaw of mine, but I know it’s true.
“So last year, I saw my brother showing a huge interest in photography and he wanted to start a blog. I’m pretty clued up on blogging, so I said, ‘Hey, why don’t we go into this together?’
“Expert Photography has been hugely successful. Only 18 months after launch, we’re getting about 130,000 visitors a month.”
“Bam. I have another asset.”
Expert Photography isn’t Michael’s only big partnerships success.
PopUp Domination is also a partnership, this time with software developers. Michael says that it was as simple as having the idea and then saying, “Go build it for me. I’ll give you half of the business if you put in all the programming hours and run the business for me.”
In exchange for his partners doing the groundwork, Michael offers his expertise and his vast online network – and so far it has been paying off for all involved:
“Neither Expert Photoography or PopUp Domination requires a huge amount of work from either party. Yet they are so successful. These are two industries that I’d never been into before (software creation and photography industry) and now I have these two great assets to fall back on in those industries.”
More Growth through Partnerships:
Michael’s been so impressed with his experience with partnerships that he sees more on the horizon:
“So I’ve been thinking, why don’t I try to do this with a couple more projects? I could do is spend a couple hours a week potentially with five businesses and give them all the ideas that I have in my head that seem to be doing really well with the first two partnerships. That’s where I’m looking now, to really partner with the right people to build out what’s in my brain.”
The size of Michael’s blogging network is already pretty staggering. In 2011, a website broker advised him that his online business is collectively worth over $1,000,000. But as Michael continues to forge valuable assets through partnerships, he truly is building an empire.
And after he’s done that, the only thing left is to cash-in.
The End Game: Selling Your Online Empire
“The money comes at the end.”
For Michael, the plan has always been to sell his websites. I have to admit, there’s something pretty appealing to detaching completely and having a big paycheck to show for it.
Here’s Michael’s advice on how to sell an Internet asset.
Separate Your Self
“Rule number one: the site cannot rely on you.”
Michael built Income Diary in to what it is today by writing in-depth articles for it week after week.
But he realized that nobody would ever be interested in buying Income Diary if its success was completely reliant on him. Michael wasn’t for sale – just the business.
So he took a step back. Michael explains:
“Obviously on day one, you’re going to have to write your own articles. But once you’re successful and you’ve got 100,000’s of people visiting your site. That’s when you’ve got to consider slowly taking your name away from the site.”
Michael did this by making his image less prominent in the site’s design and by hiring knowledgeable writers to contribute regular content (ahem). By now, more Income Diary articles have been written by other people than by Michael – and the site is in a much better position to sell because of it.
“Somebody buying a business wants to know that it’s hands-off.”
Michael hasn’t totally automated Income Diary, but he’s close (he calls it an “almost passive income”). For more insight on the matter, read Michael’s 2011 article How to Autopilot Your Blog.
According to Michael, buyers like the idea of “something that just sits there and makes them money for years. Automated support. No emails.”
Who wouldn’t like that?
“If I lose everything at the end of the day, at least I did it and gave it a good shot. At least at one point in my life I was doing something that most people only dream of.”
“So give it a go, get out there, and if you mess up… who cares?”