This guest post is by the Web Marketing Ninja.
In my work, I get to speak with a lot of people who’ve done really well from the web. Some have done seven- and eight-digits “well,” others who have more modest, but still impressive, five- and six-digit success stories.
And one of the common challenges I encounter with the five- and six-digit bloggers is that they really struggle to take that next step. How do they go from $100,000 a month to $1 million?
This issue seems to be coming up more and more often, so I thought I’d share the feedback I typically give in this situation in case you’re in similar circumstances.
Taking stock
The web and its low barriers to entry for certain business models can be both a blessing and curse.
The blessing is that you can start a business—a good one—with the notes you already have in your wallet. There are not many industries that can lay claim to that.
Millions of these online businesses start every year and quite a few of them succeed, delivering senior-management or executive-level incomes to people working from home on something they love.
Although it might be hard to see that there’s a downside to earning $100,000, $200,000, or $300,000 a year, when you grow to that level, you’ll generate a thirst for more. Trust me! And that’s usually when people come to me.
These conversations often start with the comment, “I’ve done really well, but growth is flattening off. I’ve got lots of ideas, but don’t know how to take them forward.”
Then I’ll see a model that looks something like this:
- monthly revenue = $50k
- admin costs = $1k
- website costs = $2k
- business costs = $2k
In general business terms, this is an operation running on mind-blowing profit margins. Spending $5k to deliver $50k?! Wow.
I’ll then hear statements like this from the blog owner:
- “I want to create an app.”
- “I want to build a private community just like…”
- “My website’s slow and I want to fix it and update the design.”
- “I think there’s an opportunity for me to offer XYZ service.”
- “My traffic’s high, but flat, and I’m getting the same responses to my launches and campaigns.”
- “I know I’m leaving money on the table by not doing ABC.”
Being a straight-down-the-line sort of person, my response to these comments isn’t always what the business owner wants to hear. For example, I used this analogy just today…
If this is you…
You need to get off the bike you’re on now—the one you built yourself from spare parts. It’s served you well, but it’s worn and won’t go any faster than you’ve got it going today. It’s already performing above its class.
What you need to do is to go and order yourself a new race bike that’s expertly designed to take things up a level. Unfortunately, you need to buy it before you can go fast.
In a nutshell, it’s time to invest back in your business if you want to enable it to continue its growth, and go beyond the limits of one person.
This is always a pretty bitter pill to swallow, and I can understand why. You built your blog and your business on blood, sweat, and tears. It has put food on the table and money in the bank, and now I’m telling you that you need to give some of that up to go any further!
Of course, it’s not the only choice. You can live very comfortably on $45,000 a month, and you’re taking a risk spending your money on something new—after all, you might not get it back. But you need to understand that it’s very unlikely you’ll be able to continue to grow a blogging business at this level without spending any money on it.
Typically, the response from my client is one of four:
- They decide they’ll just continue to pocket the profits from their current blog for as long as they can.
- They’ll make the decision to invest their own money into their business.
- They’ll find a partner to share equity with—someone whose skills complement theirs, and who can grow their current capability.
- They’ll seek funding from investors to support growth.
There’s nothing wrong with any of those outcomes, as long as you make the decision based on your own desires.
Looking to grow
Let’s assume you’re in one of the last three categories, and look at how you might implement some of the growth tactics I mentioned above.
If you want to create an app…
Apps can be quite simple and cost-effective to produce, or their creation costs can run into the millions. While there are still a few nuggets out there, a lot of the low-hanging, simple-but-valuable apps have been gobbled up in the goldrush.
Also, simple doesn’t necessarily mean cheap. You’ve probably heard about the $750 million Facebook paid for Instagram, but let’s not forget the $50 million in funding the app’s creators received to build and manage it in the first place.
Now this isn’t meant to deter you. Just realise that unless you can build your own app, and you want to do something unique, you’re up for a minimum of $10K to produce a quality app in most instances.
If your website’s slow and you want to fix it and update the design…
Chances are you’re running WordPress, and you might have tweaked a template or got a theme designed for you. You’ve probably installed plugin after plugin, with a bunch you’ve totally forgotten about. Maybe you’re on shared hosting that’s not scalable.
The result is that your website is slowing down and can’t deal with your traffic.
In this instance, you’ve got two problems to solve. Your website is inefficient and you need more sophisticated hosting. To get it done right—by people who are experienced with high-traffic sites—you’re looking at spending $5-$10k, at a minimum.
That’s only going to solve your immediate problem, and that’ll be back again before you know it, unless you bring in developers and other experts to give your blog constant attention.
If you know you’re leaving money on the table by not doing ABC…
This one’s pretty open ended. “ABC” might be something simple, such as setting yourself up as a merchant so you can take credit card payments directly, rather than using PayPal. It might be breaking the limits of your basic checkout system, the creation of an ebook or other product—the list could go on an on
Simply by making that comment, though, you’re admitting that your To-do list is longer than you can handle, and that in itself is costing you money. It might be time to get some help.
Just a blogger? Or a business?
Are you “just a blogger?” Or are you “in businesses?” It’s an important question to answer.
The prospect of spending money on your business, when you have the means to do so, is often a telling moment. What you do will reflect just how serious you are about building a business, rather than “just” being a blogger.
Businesses hold the keys to greater financial gain, but unfortunately, along with that potential comes more pressure and risk—and that’s not for everyone.
But if you’re finding yourself in a similar scenario to those I’ve mentioned here, you need to come to terms with the fact that your dream run of growth will someday reach its peak, if you stick with your current capabilities.
It’s going to cost you to change that, but that cost could turn you into one of those eight-, nine-. or ten-digit superstars. We can all dream of never-ending growth with minimal investment. But in most cases, the real world doesn’t work like that.
How’s your blog’s growth going? Do you think it’s time to invest to build it further? I’d love to hear your plans below.
Stay tuned for more posts by the Web Marketing Ninja—author of The Blogger’s Guide to Online Marketing, and a professional online marketer for a major web brand. Follow the Web Marketing Ninja on Twitter.
