How To: Building A Million Dollar Website Business
Today I wanted to let you know… I’m a millionaire! Well… sort of.
I’m a millionaire just like Mark Zuckerberg is a billionaire. You see Mark founded Facebook and Facebook is worth billions so technically he’s like a billionaire?!
You see, I own IncomeDiary and a whole bunch of other websites and based on what a broker told me, I’m worth a fair chuck of change.
Websites typically sell for 12 – 18 times monthly revenue. However this isn’t the rule. If your website is an authority website, has a great brand, has real “potential”, is making a significant amount of money (lets say… at least tens of thousands of dollars a month), then well it can be pretty much any amount you money someone is willing to pay for it. In a down economy (or so the broker called it), you should expect 2 – 4 years revenue. But again, let me stress, this isn’t the rule. Some sell for a lot more.
Back to my point, based on that hooharr of a paragraph, yes my business would in fact sell for at least $1,000,000 (I’d hope significantly more), which would make me a millionaire? Right?
It’s a weird world but I wouldn’t ever consider saying that out-loud in a public places around actually people. As far as I’m concerned, you don’t have a million dollars till it’s in your bank. Having said that, I do own a website network worth a lot of money, so let me give you a few ideas on how you can do it yourself.
First however I would just like to make perhaps the most important point in setting up any business:
What is your exit plan? Who is going to buy your business and how much for?
I can’t tell you how often I ask a website owner what their Exit Plan is and they cannot give me a straight answer. Yet so many website owners just make this assumption that somehow it will just all work out fine? To put it another way, lets say today that I want to do a North American road trip from New York City to Los Angeles – do you think I would ever get to Los Angeles if I did not decide in advance that was my destination? My Exit Plan? Of course I wouldn’t make it – and nor will you either with your business if you don’t have an exit plan!
How To Build a Web Business Worth a Million Dollars
Building a massive online business is quite simple. Actually, when I go over it in my head, it seems almost idiot proof, that surely nobody could get it wrong. Of course I don’t believe that to actually be the case but I do believe online entrepreneurs who have made a few bucks online can follow in my footprints and do the exact same thing. The idea is simple, build a great website portfolio with lot’s of great websites. Here’s how:
Here’s my 6 top tips for creating a big, bad-ass, money making online business.
Outsource Everything (Not like those newbes tell you though)
Whoever is going to buy your business, they want to know that they can be relatively hands off and that you have a great team that runs everything. (If the website relies on you alone it will be difficult to sell)
So just hire lot’s of people in India to do everything right? Wrong!
Nothing against Indian Programmers or article writers – (Or indeed any non-native English Speaking teams) there are some fine ones around but my experience has been that I get a better result for some skills – hiring locally. Sure it costs me a lot more but if it gets me a better job done and adds more value to my business, that is what counts.
You will have heard me say before – “You can’t outsource Passion” – and it is true, but you will get closer to it I find with individuals who understand you and your objectives and my experience has been that I stand a better chance of that by hiring locally.
I pay my web team £45 a hour (approx $70 per hour). In the past year I have spent well over £40,000 ($64,000) on my blog network alone with them, getting them to improve sites and build new ones. Every time they do a redesign, I make more money because I learn from the past one.
I pay my brother a decent wage for his age and education. He does a lot of articles for different sites I own and that means I can spend that time I use to spend on writing, on doing other things like managing my team. If I paid $6 for a article on some forum, I would see a article written by someone most likely who’s first language is not English and doesn’t have any interest in what they are writing about. This is obvious to the reader and Google and doesn’t benefit my business in anyway. Bottom line, pay more, get someone better, it’s so worth it!
OK, I will admit there are some excellent overseas outsource teams – I have friends who swear by teams they employ in the Ukraine and also Romania and of course India – but all of them admit they had to go through a lot of teams before they found a team they could rely on. And yes, you can get let down by local teams also – it is just that my personal experience that you can manage local teams easier and while cost will almost certainly be higher the chances of getting what you want, done as you wish and to the standard you require first time is much higher!
Diversify Your Traffic Sources
One thing people buying your site will be looking at is Google Traffic. If I’m getting 1000 visitors a day from Google and that’s 60% of my traffic and then Google decides that they are going to change their algorithm and rank sites differently, then I’m screwed! Thousands of top sites have over night lost over half their traffic from Google because of something just like this. To a potential buyer, this would worry them because you are so reliant on the big G.
Here’s what you do: You drive traffic in more than 1 way. Here’s a quick check list of things you must be doing:
- Social Media
- Social Networking (network with people online so they become your friend and then make them link to you Mwahahahahah).
- Content Directory’s
- Make Your Website Sticky (so people keep coming back).
Invest, Invest, Invest!
Hand on heart, I would not be anywhere near as successful if I didn’t invest so much into my business. If your making money, forget spending it on a nice car (at least not right now) and invest it into your business. Spending $5,000 on getting some software developed could see a $50,000 return in a month. The same for so many other things. I’ve begun investing quite a lot of money into article writers, not cheap ones, but ones that know a lot about the subject that they are writing about! Content means I can get more traffic which means I’m going to make more money. Here’s a few suggestions on what you could invest in:
- New website design
- Article Writers
- Software Development
- Graphics
- Buy Other Peoples Websites
- Invest in Educational Products To Further Your Learning
- Buy Traffic
- Get a Better Computer
The list is endless. I’ve done all this and it makes your business bigger and better. Here’s the simplistic way to show you why you should invest:
Build a website, make $100 a month and do nothing new month after month and keep making $100 a month.
Month 12, your making $100
Or….
Build a website, make $100, invest the $100 into a premium theme, next month you make $120. Keep investing and investing.
Month 12 your making $340
Now imagine the increases when your making $10,000 a month and investing half of it.
Work Hard (At least at the beginning)
Entrepreneurship is about living a few years of your life like most won’t so that you can live the rest of your life like most can’t.
This means, work now, make lots of money and spending years to come in a lovely house watching your neighbor go to work every day while you live your idea of “the dream”.
I’ve always been lazy, it’s so hard to work when you don’t have to. When I lived at my parents, I was young, didn’t have to pay much rent and my lifestyle didn’t require me to earn a lot of money. I moved out, had to make more money, worked hard, got my business up to the level where it could maintain my lifestyle and then got lazy again. This is something I’ve done time after time as I have increased my spending and lifestyle. The importance here is, make sure you have the right team so you aren’t reliant on the success of your business.
Build a Network Of Websites
When you start your online business it’s vital you don’t do the following: Build lot’s of different websites.
It is not best to have 10 small websites, it’s best to have 1 massive one. Once you have achieved that, then you move on and build more sites related to that first website. This is exactly what I have done. A great example of this is TutsPlus network. They started with a blog about Freelancing, then Photoshop Tutorials, then Coding Tutorials and it just kept growing, creating new sites offering what their readers wanted to know more about. In 5 short years they are making millions because they expanded and invested.
Have The End In Mind & Work Towards It
I find this to be really vital to my success. If I didn’t have a clear understanding of where I wanted my business to go, what I wanted it to stand for and what It’s going to look like, then I wouldn’t be as successful as I am. I know that replying to negative emails won’t get me closer to my goal. There are so many things you are probably focusing on that are irrelevant to your end goal and the success of your website. Cut them out and you find you will have a lot more time to focus on the things that are import.
Just make sure you keep working towards an Exit that makes you very wealthy!
I would really love to hear about your exit plans in the comments below? Better still if you have already made a successful exit? Share the experience – and of course if you have any questions or suggestions for even more improved business clarity share that as well.