Your Passive Niche Income Business Plan – Part 1

It’s time to get started!

(There’s a TON of numbers and math in this post. Sorry. But it’s important to understand the big picture so you have a framework to follow and an expectation to set. This stuff matters, so hang in there with me!)

Before you begin building passive niche websites all willy-nilly, you need to have a framework in place. In other words, you need to have a solid idea of what you’re going to do before you do it!

In a business where getting easily derailed is commonplace, the last thing you want is to only have some vague idea of how you’re going to make money that looks something like this:

Instead, let’s set up some reasonable metrics, and see how everything fits.

We’ll make a couple of assumptions out of necessity, but my experience has shown these assumptions to be realistic (for me at least, as always, your mileage may vary).

Assumptions:

• Each site will average $3/day in income
• Each site will average 100 unique visits per day
• Each site will contain 4-6 pages of useful content
• You have the time, money or resources to build around 5 of these sites each month
• You will submit each site to a “standard” backlinking process
• You will give each site at least 90 days after starting your backlinking campaign to determine success/failure

So we’re going to build 5 new sites per month, and we expect each site to earn $3/day, which means that collectively, each group of 5 sites should be earning $15/day within 4 months (30 days to build the sites and start the backlinking, 90 days to let the backlinks take solid effect).

Keep in mind that within the $15/day group of websites, the amount each one earns will vary widely. You can expect to see a pattern that looks something like this:

• 10% of your sites will earn $10/day or more
• 10% of your sites will earn between $3-10/day
• 30% of your sites will earn between $1-3/day
• 50% of your sites will earn less than $1/day

You can expect the site income to break down a little like this:

• Site 1: $10.00/day
• Site 2: $3.00/day
• Site 3: $1.50/day
• Site 4: $0.25/day
• Site 5: $0.25/day

What you have above is two sites that can largely be considered failures, one site that is “okay” (it will make close to $50/month), one site that just meets your goals, and one site that blows away your expectations.

Want a “real” example? Here’s a snapshot of my first 5 websites, and what they’ve earned so far this month (as of March 13, 2012):

This is so typical, you can almost set your watch to it.

In other words…20% of your sites will produce 80% of your income!

Remember that, it’s important to the “twist” I’ll reveal in a moment.

I’ve seen this happen time and time again. You might only see 20-40% of your sites meet your “baseline” income goals, but around 10% of your sites will be runaway hits that more than make up for the 60-80% that “fail”.

Okay, so far we’ve:

• determined our baseline income goal for each site ($3 per site per day)
• set a production schedule (5 sites per month)
• estimated a timeline to determine success or failure (90 days after backlinking begins)
• laid out the disproportionate ways we can expect these sites to earn income (10% mega-hits, 60-80% “fail”)

Now let’s put it all together, with an interesting “twist” at the end.

(Note: At this point, many, MANY internet marketers would start trying to dazzle you with claims of big money in a very short period of time. You will quickly see that isn’t the case here.

We’re building a long-term business with several checks and balances to help ensure that we are as protected as we can possibly be against things like SEO changes, de-indexed sites, loss of Adsense or Amazon accounts for various reasons, etc.

These things all take time to implement properly, and since our goal is to build slowly and steadily for the long haul, the income in years 1 and 2 may not look very impressive. But stay with me as we go along, and you’ll see that the income earned for the hours worked is simply amazing as time goes by.)

We’re going to build 5 sites a month for 10 months out of the year (you get one month off, and one month to prep for and focus on the “twist”). So after 10 months, you’ve built a little empire of 50 niche sites that are averaging about $150/day ($3/day x 50 sites), or about $4,500/month, or about $54,000/year.

Now, that’s a nice, solid income for 10 months worth of work, but it’s probably not the 6 figures in 90 days type of income that so many people are trying to sell you.

Here comes the “twist”

Remember what I said above about 80% of your sites producing 20% of your income? Using our now-completed 50 sites as an example, it’s highly likely that 10 of those sites will produce around 80% of your income, and another 10 sites will produce another 10% or so.

But what about those other 30 websites?

They’re hanging around, making a few bucks here and there. The better ones might even earn around $1/day. It’s safe to assume that collectively, they will make up around 10% of your total income.

To summarize:

• 10 sites make 80% of your income
• The next 10 sites make another 10% of your income
• The remaining 30 sites make the last 10% of your income

How to “cash out” on those 30 “failed” sites

You will package them in 3 groups of 10 sites each, splitting them up so that each group is collectively earning a similar amount of money, and you will sell each group of sites at Filppa.com.

Okay, a little more math…sorry!

Your 50 sites are earning $150/day. 90% of that income ($135/day) is coming from your top 20 sites. That means your remaining 30 sites are averaging about $15/day.

Your job is to break those 30 sites down into 10 site “packages”, each earning around $5/day, which equals $150/month.

You will sell each package of sites at Flippa.com. With a proper advertising/selling campaign on Flippa (I’ll show you how), you can expect to earn around 15 times the monthly income for each collection of sites.

Since each package of sites earns $150/month, you can expect to sell each one for around $2,250.

$2,250 x 3 = $6,750

What have you done?

• You’ve increased your first year income to $60,750
• You’ve “cashed out” sites that were not living up to your expectations
• You’ve generated a lump sum of cash to finance the expansion of your most successful sites
• You’ve cleared “business space” to build out another 30-50 sites in year 2, while the year 1 sites continue to earn a passive income

Here again, the “twist” doesn’t look like much on the surface, but the points above (especially the ones about cashing out of “failed” sites and clearing space to build more) are hugely important as time goes by.

So what happens in Year 2 and beyond?

This post is now over 1,100 words and is full of math (ick). So you’ll have to check back for Part 2 to find out!

UPDATE: You can now read the next part here: Your Passive Niche Income Business Plan – Part 2