Establishing a Passive Income Business

In previous articles, we have outlined income producing strategies in broad terms, either by selling goods and services locally (Earning Extra Money – Physical Goods & Services), or by exploring the various money making vehicles on the ‘net (Earning Extra Money – How to Earn Money on the Internet)but now it’s time to zero in further, and begin talking in specifics. This article will focus in on the specific actions and activities you need to be pursuing if your selected goal is to create and establish a viable passive income business.

At the risk of sounding like a broken record, please note that “passive income” DOES NOT MEAN “no work required.” As I’ve said before, you get out of this business what you put into it, so if you’re interested in instantaneous, vast riches with no effort, then go chase after one of those “Pied Piper” IM “gurus,” buy every new product they recommend for a year, and after you’ve wasted a few thousand dollars, come back here and we’ll show you how to do it properly, and if you’re not sure this is for you, head back to the home page (Extra Income Online) and review.

Okay, first things first, let’s define what a “passive income business” actually is, so there are no misconceptions:

This sort of stay at home business is predicated on the notion that the greater bulk of the work is done on the front end. That means lots of long days creating content, doing signups and setups, publishing stuff and creating backlinks, and during the initial work phase, you can expect to see very little in the way of revenues. For this reason, most people give up before they ever get this kind of business off the ground, and that’s a pity, because if they’d just stuck with it, the profits would start rolling in, and the neat thing about this type of business model is that once you do the work…once you’ve laid all the necessary groundwork (and make no mistake, there’s a lot to be done!), the websites, and the profits they generate are pretty much on auto-pilot from there on.

I’ll caution you though. It takes a special kind of person to slog through all the prework and setup stuff necessary to succeed, and unless you can go 1-2 solid months with nothing to show for your Herculean efforts (and then, when the results do start appearing, they’re often fairly modest in the beginning), this is not for you. I should also add that you CAN do this and earn money part time, but of course, it will take correspondingly longer to get to whatever your desired income goals might be.

Don’t worry though. If you can survive the early days, this type of business is absolutely fantastic, and the work you do on the front end resonates down the chain and through the entire body of your work. There’s a compounding effect here, and what starts off as a modest income stream can be grown steadily to any income level you can dream, so as a home money making business opportunity goes, it’s pretty close to perfect. All it takes is…you guessed it. Persistent, focused action.

WHAT action though? If you’re new to the game, that’s the very first question that springs to your mind, and the answers to that question are the very thing that lots of gurus charge good money to answer. Unfortunately, most of them do a relatively poor job explaining it, but of course, you don’t find that out until after you’ve spent your money.

Wouldn’t it be nice if someone who had already made all the newbie mistakes just came clean and mapped out a clear, simple strategy for how to learn what needs to be learned?

That’s exactly what I thought too, and one of the major reasons I made this blog. :)

I will lay out the specific blueprint for you right here. What to do, and how to do it. Bear in mind though, that this is only the tip of the proverbial iceberg. Internet Marketing and SEO are both simpler, and more complex than they first appear. You can learn the basics of SEO and backlinking techniques in five minutes (by reading below), but to truly master them will take months of real world practice, and preferably, some type of mentorship to speed things along and smooth out the bumps in the road you’ll invariably encounter, and that’s what I propose. I’ll lay out the basics for you in the paragraphs below. You can take this information and try to go it alone, and in this way, you will absolutely minimize your out of pocket expenses.

Of course, I’ll also tell you how you can spend just a bit of coin and radically shorten your learning curve. Up to you which you opt to take. Fair enough?

Passive Income Businesses generally revolve around two types of sites/pages. Adsense and/or Affiliate products. In my opinion, sites/pages that focus on both in tandem represent the best of all possible worlds.

The chief advantage to such sites is their passivity (hence the name). Once established, it’s basically a “hands off” business. You don’t have to worry about stocking a product, or customer interactions. All of these are handled by…well, you may not even know, exactly, and that’s quite alright, because it’s not your concern! You are merely the advertising vehicle, and for that, you get a commission per click or sale. That’s the sum total of your role, and that’s actually quite an attractive place to be! A secondary advantage is that it doesn’t require a PhD to do, and in fact, could be a viable business for your kids, if you didn’t see anything to your liking over in the article on Ways for Kids to Earn Money.

Here’s what you need to do in order to create a viable passive income business:

Step 1: Niche Research – See…a lot of people go astray right from the start. They figure what they’ll do is write some content about something they’re interested in, and then find a way to market it. This is, in fact, the most intuitive way to approach the business, and is exactly the wrong thing to do!!! I don’t have any numbers on it, but I’d imagine that this is the #1 reason most people fail at internet marketing. They’re doing it backwards. What niche research accomplishes is that it finds you a little corner of the ‘net that has profit potential. If there’s no profit potential in it, then there’s no point in writing about it, right? I mean, if your goal is to make money at it. Certainly, if you’re passionate about a hobby you have and you want to make a website, then by all means, don’t worry if it’s profitable or not! But that’s not why you’re here. That’s not why you’re reading this page, or for that matter, why you came looking for this information. You’re interested in making money on the internet, and in order to do that, the first thing you have to do is rid yourself of your “backwards thinking.” Don’t just write about what you’re interested in. Do the research. IF it is profitable, THEN start working on content, based around keywords that real humans are actually searching for! Now, in order for a niche to have profit potential, it needs two things: A decent CPC rate, and a decent number of monthly searches. Again, if you are new to this, then my statement raises more questions than it answers. WHAT is a CPC rate? HOW do you know if it’s good? HOW MANY searches is good? Where do you find this information out? And how, exactly, do you find a good niche?

All of these are completely fair and valid questions, and all of them will be answered below:

* Where to Find This Info:
The first, best (free) place to look for the information about niches is the Google Adwords Keyword Tool.

What you want to do is type in a broad idea for a keyword into the tool and let Google recommend others for you. Specifically, you are interested in search trends, global search volume (this is a monthly estimate), and CPC. You’re really only interested in “exact match” search terms, so whatever you type in, put the term in [this kind of bracket]. If you just type the word in, you’ll get a broad match, and if you use “quotation marks around the phrase” you’ll get phrase matching results, and this is too broad for our purposes. What we’re really after is an estimate on how many times each month are real human beings typing a given phrase into Google. That’s what’s important, and that’s what the tool above gives us a good estimate on.

* CPC:
CPC = “cost per click.” In simple terms, this is the rate that Google (or other ad networks) charge advertisers to post an ad so that it’s visible for a certain, specific keyword. Now obviously, if you build a website that targets a given keyword, you don’t “get” whatever amount the CPC is. A good rough estimate would be 20-25% of that number would go to you. So, if a given KW (keyword) has a CPC of $1.00, then your share of that would be in the range of $0.20 – $0.25. In other words, if you design a web page around the keyword “baby monitors,” and that KW has a CPC of $1.00 (I don’t know that this is accurate, I’m just making it up for this example), you can expect twenty to twenty-five cents per click. Obviously, the higher the CPC, the better for you, but bear in mind that a higher CPC also generally tends to mean greater competition, which in turn means greater difficulty in getting a page 1 ranking on Google, so there’s a bit of a tradeoff, and this should factor into your thinking. This kind of puzzle can be solved one of two ways. Either go it alone and experiment, or find yourself a mentor you trust and ask him/her. If you have six months to a year to experiment, you can certainly gain the experience on your own, and become quite adept at “reading” a niche, but you can cut the learning curve down dramatically by studying with someone, or even better, a group of people. I heartily recommend the group over at WordPress Goldmine, who took me under their collective wing. I learned more there in two weeks than I learned in all my time spent learning on my own, combined. I refer to them (the WPGM forums) as my own personal money making forums, and that’s not an exaggeration! They virtually created my current business by teaching me most of what I know today!

* Number of Searches Per Month:
Ask ten different IM people what range you should shoot for, and you’ll get ten different answers. Ideally, you want a phrase that’s getting at least 20-30 searches a day, bare minimum (so, figure an absolute floor of 500 searches per month), and of course, anything higher than this is gravy. Again, having a group to bounce ideas off of is extremely helpful, and for this reason, I offer another nod in the direction of my study group, WordPress Goldmine (note: I do not own WPGM. I am merely a grateful student who found a place with legitimate information and great people!)

* A decent site should start with no less than 5 keywords. If you find more that are related to your topic, great! Save them in a spreadsheet and you’ll have fodder to add to your site for later!

* If you think you’re done with the research at this stage, boy are you wrong! Now that you have some keywords, you need to assess them (and again, having study partners helps here!). How many other websites are already out there, competing on the very words you choose? How strong are they? There are all sorts of opinions and advice on the matter, and notably, there are a number of tools you can use to automate checking on this which greatly speed the process along. You can do it by hand, of course, and while free, this takes valuable time, so you must decide. Do you have more spare time, or money? If you’ve got lots of time, by all means, the learning experience will be good for you, so do it by hand! You may want to use the “by hand” approach for your first couple of sites to prove to yourself that I’m not yanking your chain anyway, but once you see that it works, you will most likely want to make the process more efficient by investing in tools to make your life easier, so I’ll describe both ways:

* The Free Method of Checking a KW:
For each keyword you’re thinking about using (not just the five or so you want to start with initially, but all the KW’s you have on your list), type into Google: allintitle:YOUR KEYWORD and allinurl:YOUR KEYWORD. Note how many websites each result returns, and study the sites on them. These guys are your likely competitors. They have done at least the basic on-page SEO work for the keyword you’re after. Study the sites on page one of Google for each keyword you have on your list, cos these are the people you’ll have to beat if you want a page one ranking. Lastly, of course, you’ll want to simply type in the keyword straight into Google (no quotes, brackets, or anything), as this will be what your potential viewers will be doing. You’re now looking at the playing field. The very expanse of search engine real estate you’re going to stake a partial claim to. You’ll no doubt see lots of “familiar faces” on this page (the guys from your “intitle” and “inurl” search, but possibly a few ringers as well—note that the outliers in this group will be the ones that will be relatively easier to dislodge). Next stop, to find out each player’s relative strengths.

To find out how “strong” they are, you’ll need a plugin that will show you the site’s page rank. Now, it is entirely possible that a PR0 (brand new site with no backlinks) can beat a PR5 site, but the odds are against it. Doesn’t mean it is impossible, but all else being equal, the site with the higher PR is going to get displayed first, if they are at all optimized for the keyword in question, so you’ll need to find out what PR your competitor sites are. Best way to find this out is to get a free membership at SEO Book and download their Firefox SEO plugins. When activated, they’ll display the page rank of each site that shows up on a google search. Again, you’ll need to do a search for each keyword you want to work with.

Now, if all that sounds tedious and dull, that’s because it is! And, there’s a better way to go about finding the information you’re after. You can simply purchase Micro Niche Finder and automate the entire process. MNF is set to default to exact match searches, and displays, and at the touch of a button will analyze the competition and give you a color coded and numeric response with a drill-down feature so you can dig more deeply into what factors most contribute to the strength of the competition’s rankings. Red = Strong, Yellow = Moderate, and Green = Minimal. Obviously, if you’re just starting out, you’ll want to gravitate to those keywords with minimal competition. Get some victories under your belt, and then you can consider tackling some of the more difficult keywords. Unlike many tools of this type, Micro Niche Finder is a straight up, one-time fee, rather than a monthly subscription, and that’s one of the many reasons I recommend it!

* Finally, sign up for ClickBank or Commission Junction and look to see what products are available to promote that relate to your niche. I ALWAYS recommend trying these out and reviewing them on your site. You don’t have to do this straight off (you can start with just Adsense), but you need to at least be thinking in terms of what you might eventually promote.

If you can’t find any particular product, then consider Amazon or Ebay affiliate partner networks as a good way to boost site revenues. Again, these need not be placed on-site immediately, but there’s little reason not to.

As for finding good niches: Browse through DMOZ, EZA (Ezine Articles), look thru magazines, watch TV, go outside, look at the products around your house, join Oprah’s mailing list…any or all of these are completely valid.

Step 2: The Mechanical Stuff – Buy a domain. Install and configure WordPress. This is probably the easiest part of the whole smash, and should take you less than an hour, total. If you don’t already have hosting someplace, I recommend Go Daddy. I use them, and their unlimited hosting plans are pretty cheap. Also important, I’ve never had even the slightest trouble with any of my sites, and their customer service department rocks! (When I was just starting out, I didn’t have a clue what to do or how to configure stuff…Brandon in customer service patiently walked me through everything I needed to know…WELL above and beyond the call of duty!). Anyway, I consider them the total package. Good stuff. When you choose a domain, use one of your better (if not the outright best) keywords from your list, and make sure that keyword is in the URL Whenever possible, buy a .com domain (even if you have to add a word or two to the URL to get a .com).

Installing WordPress. If you use Go Daddy for hosting, they’ve got an auto install right there on the site. Just use that. Should be set up and ready to go in less than 20 minutes, tho I have had it take an hour or so. I guess it depends on the demands currently being placed on their servers. Anyway, tell it to install, go get some pizza and something to drink, and wait.

Configure WordPress to your liking. There are all sorts of directions you can go here, and this is another one of those areas where you’re better off to study with a private mentor or a group to get a good plan of action. Again, feel free to experiment with what works best on your own, but you may find that you’d just rather have a group to bounce ideas off of or learn what that group’s best practices are.

Step 3: Content Creation – This is either dreadful or great fun, depending on how much you enjoy researching and writing. You want to start with one post per keyword (one of the things you’ll learn as part of a study group, and eventually on your own, is how to start feathering multiple keywords into the mix, but when you’re just starting out, keep it simple!), and each post should be on the order of a thousand words. If you’re feeling wordy (like I am with most of these posts), then knock yourself out.

From your content pages, you’re going to re-write bits of these pages to form the basis of articles. If your content post covers five salient points, then you can probably get at least five articles from that, with each article covering one of the five points.

Content and some articles at the ready, and you’re ready for the next step…the dreaded “M” Word!

Step 4: Marketing – This is not a “one and done” kind of step, but rather, a bit of an ongoing process. The very first thing you want to do is take your existing stable of articles and post them to EZA (Ezine Articles). This will get you lots of exposure and initial traffic while you’re waiting to be indexed (and EZA gets new content all the time, which means Google crawls it all the time, which means that publishing an article here will get you indexed fairly quickly…see?! No need to pay that “guru” fifty bucks to “submit your site to hundreds of search engines!”

As soon as you’re indexed, activate Adsense and place one ad block (336×280) in the upper left hand corner of your site. Word wrap or not, at your discretion. This is statistically the best place to put ads…another one of those “trust me, just do it” things. Once you start making money, play around with this, but if you want to make at least a little jingle quickly, just listen to me, ‘k? ;)

While you’re waiting for your articles to be approved, you can take them and begin “spinning them.” That is to say, tweaking them to create unique variants of them for submission to other places.

The idea here is that you don’t want to spit out thousands of carbon copies of your articles and have these all over the web. No, at present, Google doesn’t levy a penalty on you for doing this, but IMO, it is only a matter of time before they do, and you’ll protect yourself from an eventual slap if you plan for it now, so spin out some variants.

There are all sorts of ways of doing this. Andy Black has a free tool here, that will get you started, but for the money, you’re going to be hard pressed to beat the software combination of Magic Article Rewriter and Submitter. Not only will this allow you to create variants on your articles, but it’ll also give you access to more than seven hundred article directories AND allow you to schedule the publication of your articles so they don’t all hit at once (which could make Google angry with you and your new site). As of this writing, the software duo was only eighty bucks, and a steal at that price.

Yes, you can find some free article submission software out there, and yes, it works, but it doesn’t have NEARLY the firepower that this one has (the best free software I’ve found is Article Submission Helper, which submits to ~175 directories vs. more than 700 with MAS). There are programs that can generate more backlinks for you, but these all cost a monthly fee, and until you’re already making good money, I would not recommend them.

You CAN add Free Traffic System to your backlink building mix, however, as they have a free option. It’s more limited than their pay option, but still generates those much needed backlinks (and Magic Article Rewriter will auto format your stuff in FTS format!).

And that, in a nutshell, is how you play the game. One of the best home computer jobs you could ask for!

Summary – “Big Secrets Revealed”

• Print this page and use it as your site building blueprint

Software Referenced on this Page (Free Stuff Listed First!)
All items listed here should pretty much be considered must-haves at some point, in your Money-Making Internet Business Tool Kit

Adwords Keyword Tool

SEO Book Plugin Collection (for Firefox)

Andy Black’s Easy Article Rewriter

Article Submission Helper

Free Traffic System (has both a free and pay option…start with the free!)

Software Options that Cost Money and What They Do

WordPress GoldMine (not software, but a study guide and dedicated forum, run by Mark Thompson…come study with us!)

Micro Niche Finder (helps identify niches, keywords, and the strength of competition within any given niche).

Go Daddy (Web Hosting)

Magic Article Rewriter/Magic Article Submitter Combo Pack (spins then submits articles to more than 700 directories – comes with a scheduler!)

Full Disclosure: I use regularly, and am an affiliate for Go Daddy, WordPress GoldMine, Micro Niche Finder, and Magic Article Submitter/Magic Article Rewriter

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