Your Passive Niche Income Business Plan – Part 2

Be sure to check out Your Passive Niche Income Business Plan – Part 1 first!

When we last left our intrepid business plan, we had just completed Year 1, earned roughly $60K, and had 20 passively earning web properties to show for it.

So what do we do now?

Well, the beauty of this system is that after Year 1, you can take a number of different approaches within the context and framework of the overall plan. For example, you can:

• build 50 new sites and leave your existing 20 sites alone
• build 25-30 new sites, and build a few backlinks to your existing sites
• build no new sites, and focus on strengthening your 20 “winners” with more content and links
• any combination of the above

In addition, you can choose how many sites you want to sell on Flippa each year. A few, a bunch, none at all, or something in between. These decisions can be based on several things, such as:

• do you want to scale quickly and hire staff?
• do you want to build a greater number of sites to sell?
• do you want to scale back, turn a few sites into authority sites, and avoid selling sites at all?
• do you want to build steadily and sell off as many sites each year as you build?

As you can see, you can do a lot of things from here! But the one thing I highly recommend you do is to decide what you want to do by the beginning of Year 2, and Write. It. Down.

I can’t stress enough how important it is to make a strong decision about how you will proceed, then get the process down on paper where you can see it every single day.

In fact, you need to break it down to a point where it can fit on a single sheet of paper. Print that page, and read it.

Every. Single. Day.

If you skip this step, I can almost guarantee you will get lost within 6 weeks of starting Year 2. Not only are there TONS of distractions out there in the wild, wild Internet, but now you have the potential distraction of variations within your own business plan!

This is your business. Treat it like one by making strong decisions and sticking to them.

Okay, enough lecturing. Let’s get down to the numbers.

Year 2 of Your Business Plan

Though I may adjust this very slightly as I get near the end of Year 1, my current plan is to start Year 2 with my 20-25 best websites. I will continue to build new sites, but I’ll likely slow the pace slightly to one new site per week (4 per month), for the first 6 months of the year. (I’ll build one more to give me a nice round number of 25 sites to work with.)

After 6 months, I will have 25 new websites to compete with the 20-25 sites I kept from Year 1. To give the new sites a fair chance to beat the existing sites, I’ll stop building new sites for the rest of the year.

This leaves me with the remaining 6 months to build and grow the new sites to see how many of them can knock out the existing sites. I will continue to slowly build backlinks to the existing sites, and may even add a page or two to each one.

But these are supposed to be passive niche income sites, which means that they should be able to maintain their rankings, traffic, and earnings with only a low level of maintenance. They will mostly be given a chance to do exactly that in Year 2.

Meanwhile, the 25 new sites will be put through the same standard backlinking process as the sites built in the previous year, while accounting for the inevitable changes that always seem to come to the backlinking and off-page SEO process.

In Month 12 of Year 2, I will assess all of the sites (numbering somewhere between 45-50 of them) and make a determination of which sites I want to keep and take with me into Year 3, and which ones I will package up and sell on Flippa.

Keep in mind that in Year 2, some of the sites that don’t make the cut will still be earning enough money on their own to sell them separately. This is a judgment call you will want to make, but I will of course cover it here on the blog when I reach that stage.

The number of sites I will keep each year will remain somewhat fluid. Sites will rise and fall, and putting an arbitrary number on which ones stay and which ones go isn’t really in alignment with the fact that you will likely have a gut feeling about many sites “on the bubble” and that will cause your numbers to vary slightly.

In my case, at the end of Year 2 I will likely keep somewhere in the vicinity of 20-25 sites, and the rest will go out for sale on Flippa.

Okay, back to the math. Are you ready?

Year 2 Income

We’ll assume that your 20 existing sites that earned 90% of your income last year ($135/day) grew by 20% in Year 2 and averaged $162/day for the year. (Just by adding 3-5 new pages to each site each year and backlinking them well, you should see year over year gains of at least 20%.)

Your 25 new sites have met your $3 per day per site goal, and are making $75 per day, or $2,250 per month. In fact, because of all you’ve learned, you’re likely choosing better niches and building better sites. So even though you averaged $2,250/month of the entire course of Year 2, you’re likely making more than that by the end of the year.

(Less income in the first 6 months of the year as you built the sites out, more income in the second 6 months of the year as they quickly grow. So figure the whole thing will average out to $3/day for the entire year. Make sense?)

Next, you will decide which sites to sell and which ones to keep. In building 25 new sites, my goal is for 5 of those new sites to beat out 5 of my existing sites. It’s also likely that of the rest of the sites, 5 more of the new sites will be on a big growth spurt and will be intriguing enough to keep. Also, it’s likely that 5 of my existing sites will lose some rankings, or backslide in income for one reason or another.

So of my existing sites, 10 of the 20 will be kept, and 10 will be sold. Of the 25 new sites, 10 will be kept, and 15 will be sold.

This leaves you with 20 sites to take into Year 3, and 25 sites to sell on Flippa.

The numbers here are more arbitrary than I’d like, but once I’ve actually gone though this phase of the process in real time, I’ll update the numbers with hard cold facts.

But for now…

• Your 20 sites from Year 1 earned $59,130 ($162/day x 365 days)
• Your 25 sites from Year 2 earned $27,375 ($75/day x 365 days)

Your total passive niche income for Year 2 is $86,505.

Now let’s add the 25 sites you will sell on Flippa.

Of those 25 sites, 5 will be sites that were simply beat out by 5 new sites. They are likely still earning a decent amount of money (after all they were in your top 20% of your sites from Year 1).

You also have 5 new sites that just barely missed the cut, but were just over your goal of $3/day.

For simplicity’s sake, let’s assume these 10 sites were making $100/month each ($3.33/day).

Since these sites are earning well, you will sell them separately. $100/month x 15 months income means you should see about $1,500 for each of the 10 sites, for a total of $15,000.

Let’s now deal with the final 15 sites.

Collectively, they are doing better than your “failed” sites did the first year (you’ve learned a lot, and even your “misses” are better than last year). Combined, these 15 sites are earning about $15.00 per day ($1.00 per day, per site).

You can either sell all 15 together, or break them down any way you’d like. I would probably break them down into thee equal sets of 5 sites each. Each group would be earning $5/day, or $150 per month.

$150/month x 15 months income = $2,250 x 3 months = $6,750.

Add that to your $86,505 in passive niche income, and $15,000 in Flippa sales for your 10 individual sites (totaling $21,750 in Flippa sales), and you’ve now reached $108,255 in income for Year 2.

I can hear you now…

You mean to tell me that I’ve been at this for 2 years, and I’ve just barely broken 6 figures?

Here are the two important takeaways:

• Your total income increased by 78% over Year 1
• Your work output decreased by 50% (50 sites built in Year 1, 25 built in Year 2)

Show me a job where you can get a raise of 78% by doing half the work you did the year before.

Year 3 and Beyond

From here, you simply repeat what you did in Year 2.

Your workload has stabilized at 25 new sites per year, but your doing several things to consistently increase your income year over year:

• you are constantly building a few (let’s call it 5) new sites a year that beat your “control” sites
• you are taking the time to build out your successful sites by adding pages and building backlinks
• the “beaten” sites in your Top 20 are earning more and will sell for more money on Flippa

With the above taken into consideration, you shouldn’t have too much trouble seeing 25% year over year increases in your passive niche sites, and 10% year over year increases in your Flippa sales income.

So let’s project one last time, shall we?

• Year 3 income – $108,131 (sites), $23,925 (Flippa) – Total: $132,056
• Year 4 income – $135,164 (sites), $26,318 (Flippa) – Total: $161,482
• Year 5 income – $168,955 (sites), $28,950 (Flippa) – Total: $197,905

Clearly I haven’t made you a millionaire (sorry). But what I have done is created a business with long-term viability and stability that requires no employees (and doesn’t even have to include outsourcers if you don’t want to).

If you want to do everything yourself, you can expect to work about 20 hours per week to maintain and grow your business. If you prefer to outsource most of the work, you can conceivably continue to build and grow this business on about 10 hours per week.

Congratulations! You now have a passive niche income business that earns a healthy six figures a year, requires no more than 10-20 hours a week of your time, and allows you to live and work anywhere in the world with an internet connection.

I hope you aren’t disappointed by this. It’s not instant overnight riches. You won’t be hanging out in hot tubs with beautiful women (or men, depending on who’s reading this!) and you might not end up on the internet marketing speaking circuit telling hundreds of impressionable newbies how they can live the life of their dreams if they’ll just buy your $497 training program and join their $97/month membership site.

But when everyone else has crashed and burned, you’ll still be smiling as you have the freedom (and more importantly, the business stability) to just keep right on plugging away, quietly living the life you’ve always imagined.

What’s Next?

I just gave away my entire business plan for the next several years, for free, to everyone who finds these two posts. There are no big secrets to this. The answers you seek are not contained in a $7 ebook that’s only available for a limited time.

Everything you need to know to build a solid business for the long term can be found for free, and you’ll find a great deal of it right here.

I have nothing to sell, and there’s room for everybody. I hope you’ll choose to follow along as I build this business out, in real time, and share everything I do as I go.