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My 2012 Goal Post

Pat — Mon, 02 Jan 2012 18:44:13 +0000

Setting goals is an important aspect of growth – for business, for personal development, and for life.

Without goals to guide our actions, without that X on our map to navigate towards, we’re aimlessly wandering.

We’re wanderpreneurs.

And sure - wanderpreneurs can still grow and be happy – but setting goals will keep us on the right path, and if we are to ever get off that path, we’ll know, and we can steer right back onto it.

Does an entrepreneur without goals ever succeed?

How will he or she ever truly know?

—

I like to publicly share my yearly goals here on SPI.

Why?

Well for one – I share almost everything, but it’s much more than that.

I share my goals with you because it’s my way of making sure that I’m held accountable for meeting those goals. Even if you’re not at all interested in what my goals are, the fact that I’ve announced them here on SPI gives me more motivation to follow through – partly because I want to write a good report at the end of the year, but also because I don’t want to let you down.

In 2012, naturally, some things will happen unplanned, but I have a lot of visions I’d like to share with you today. Per one of my more popular podcast episodes, Mind Hacks, Physical Hacks and Work Hacks For Better Productivity And Getting Things Done, I’ll be sharing S.M.A.R.T. Goals - goals that are:

S = Specific
M = Measurable
A = Attainable
R = Relevant
T = Timely

Even though I know your own set of goals will be completely different than my own, I hope this post motivates you in one way or another:

If you haven’t thought of your goals for 2012 yet – do it.

If you have – crush ‘em.

Goal: Reach 55,000 Subscribers by December 31st, 2012

In 2010, my goal was to reach 10,000 subscribers, which I met in the month of September.

In 2011, my goal was to reach 40,000 subscribers, which I did not meet – ending the year at just over 35,000 subscribers – but that’s okay.

In 2012, my goal is to reach 55,000 subscribers, which means an additional 20,000 subscribers from this point forward.

It’s definitely not out of reach, but it’s not a given either. Currently, the site grows at a rate of about 1,000 subscribers per month, which means an additional 12,000 subscribers for 2012 if the growth did not accelerate.

What will I do to gain that additional 8,000? Keep reading…

Goal: Reach 40,000 Facebook Fans by December 31st, 2012.

I’m very proud of the growth on my Facebook Page. It continues to be an incredible community and a great source of inspiration (and traffic) for the SPI blog.

In 2011, my goal was to reach 12,000 fans, which I crushed – ending the year at a total of 16,430.

In 2012, I’d love to reach 40,000 Fans. Even with Google+ in the game now, I doubt Facebook will go away anytime soon, if ever, and a page with that many fans would be incredibly valuable, not only for me, but for everyone else who communicates with each other on that platform too.

If you’re not a Fan already, click here and come say hi.

Goal: Reach 10,000 YouTube Subscribers and 2,000,000 Video Views by December 31st, 2012.

YouTube is an element of my Be Everywhere business model that I’ll be paying a lot more attention to in 2012.

The SPI YouTube Channel, which is about two and half years old, currently has 6,158 subscribers, and a total of 1,014,867 video views.

I’ll be recording a lot more videos in 2012 to help me reach my goals, and within my videos I’ll be adding a lot more opportunities to subscribe to the channel as well. This includes adding YouTube annotations for easy subscribing, and just simply asking people to take action and subscribe.

Goal: Reach Session #50 with the SPI Podcast

During my presentation at Blog World Expo in Los Angeles last year, I shared some incredible data that came from a survey I conducted here on the blog with over 1,500 responses.

The data revealed that the number one way people first heard about me and/or the SPI brand was through the SPI podcast.

Not Google, not Social Media or even other blogs – but the podcast.

I’ve also published several posts about how incredible the results have been from starting a podcast, so in 2012 I want to continue publishing new episodes.

Setting a goal of reaching session #50 by the end of the year (I’m currently at session #30) helps me to make sure I continue to publish new episodes and don’t slack off.

Goal: Launch the First Product for SPI by March 15th, 2012

Even though the demand for an SPI product has been there since 2010, I have yet to release my first real product to sell here on the blog.

Why has it taken so long?

Because I didn’t want to FORCE a product just because I could make money from it. I know I’ve always had the platform and the audience to launch something that could make a lot of money, but for me personally, that reason alone is not a good enough reason to create a product and start charging for it. Greed ruins a lot of people (and businesses), and I don’t want to go there.

In order to charge for something, there must be something of high-demand, of true value, and something that is obviously worth purchasing that gives back the purchase price, in one way or another, many times over.

You’ll definitely hear more about this product as the launch date approaches, including what it is, why it was created and who it’s for exactly.

I’m spending most of my time fine-tuning the user experience through the product, because, as with anything I put out there, I want it to be useful, easy to consume, and noteworthy.

Goal: Launch 1 Premium WordPress Plugin by August 1st, 2012

In 2011, my goal to launch a premium Wordpress plugin was a complete failure.

I actually had two plugins that I started developing last year, and one of them I’d like to bring back to life in 2012 – primarily because it’s a plugin that I absolutely need, and doesn’t exist.

I will focus on one plugin only and do my best to make sure that it not only does what I need it to do, but is easy and intuitive for anyone else to use.

You’ll hear a lot more about this, I’m sure, by mid-year.

Goal: Buy 2 Existing Websites and Increase Revenue by 300% per Month

I’ve had a lot of interest, recently, in expanding my non-SPI related businesses.

With my lastest income reports showing a significant portion of my income coming as a result of the SPI blog, it sort of overshadows that I still earn between $7k-$10k per month outside of the blog.

I want to increase my earnings outside of SPI because, although I’m extremely thankful and happy for that income and the generosity of the SPI community, I want to show that you don’t need to talk about making money online in order to make money online.

The Niche Site Duel was a fantastic start (in addition to the income I already earn from GreenExamAcademy.com and iPhone apps), but the more income streams outside of SPI, the better.

In 2012, I want to purchase at least 2 existing websites that are already earning some kind of income, and increase the monthly earnings by at least 300%.

I would love to publicly share at least one these experiments on SPI, much like how I did with the niche site duel, so look out for some high-value, insider posts in the near future about that.

Goal: Earn at Least $8,000 in a Single Month from Non-SPI Related Niche Websites

To further address the issue of earning more outside of SPI, I’d like the total earnings coming from niche websites, specifically, to surpass $8,000 per month.

This means that I’ll be creating more niche sites in 2012, and expanding existing ones.

I actually just hired a second VA (part-time) to help me manage these projects and reach this goal.

I doubt that I’ll be sharing the exact domain names and niches with you because of copycats and the few people who would steal my content and use it on their own sites (which happened when I revealed my security guard training niche site, unfortunately), but I will be keeping close track of things and sharing my results with you.

Goal: Diversify Income Streams from SGTHQ.com and Earn More than $3,000 in a Single Month

Currently, my security guard training niche site (which you can learn more about, again, on the Niche Site Duel Hub), is earning between $1,600 and $2,000 per month – 98% of it coming from Google Adsense ads.

I really need to start diversifying the income streams on this site, and although I’ve wanted to for a long time now, I haven’t found the perfect solution – yet.

I’m determined to branch out in 2012, not only to increase my earnings, but also because I don’t want to rely on one single company or income source that could, at any moment, be taken away from me.

If I could get the site to earn at least $3,000 per month by the end of the year, I’d be a happy camper.

Goal: Speak Live at a Conference at Least 4 Times

Last year I experienced my first taste of public speaking, and now I’m addicted.

I loved it so much, I want to do it as much as possible, and with each new presentation I can feel my skills becoming that much better (all skills, except maybe creating slides that work).

I already know I’ll be speaking a few times this year, and unfortunately I’ve had to turn down a couple of overseas opportunities because of the short notice – but I will keep my eyes and ears open, and wherever I’m invited to speak, I’ll definitely let you know.

I’ll do what I can to make sure the next presentation is always better than the last.

Goal: Start Smart Dividend Investing

No – I’m not starting a blog called Smart Dividend Investing, but I want to actually start investing in dividend stocks in 2012. I’ve been doing research and working with a Financial Mentor over the past 6 months, learning all about it and in 2012 it’s time to take some action.

I don’t talk about my money outside of what I earn online publicly too much, but it’s something I’ve always paid close attention to.

Ever since landing my 9 to 5 job in the architecture industry, I’ve been investing for my future. A 401k, a Roth IRA, a brokerage account to save for a house, an emergency fund, a 529 plan – the whole 9 yards. I’ve even been steadily putting in $100 a month for about 5 years into a ShareBuilder account, buying stocks. Now that I work on my own, I also have a SEP IRA that I contribute to each year.

Now I won’t get into the performance of my current investments, but with dividend investing, combined with the earnings here on SPI, I can really set myself up for some dictionary definition passive income, potentially earning thousands per month without lifting a finger, or even having to sell the stocks that I own.

Of course, it takes time to see earnings from investments like these (the power of compounding

That seems to be the next step for me, financially, at this point in life.

I’m still debating whether or not to share my eventual earnings from dividend investing here on SPI, primarily because this site is geared more towards online business, blogging and entrepreneurship, but a part of me thinks it would be very interesting and potentially draw in a new crowd, although I don’t think I’d be teaching about it like I do with everything else.

What do you think?

Let’s Make 2012 an EPIC YEAR

There’s not much more to say than that.

Hopefully you have your S.M.A.R.T. goals ready, and if you’d like to share 1 or 2 here in the comment section (maybe as a way for you to publicly hold yourself accountable), I would gladly welcome them.

My next post will be my December 2011 Monthly Income Report, so look out for that in a couple of days.

Cheers, and here’s to an amazing year.

Don’t let your lack of action be the reason you do not meet your goals.

If you liked this post, please retweet or reply to it below:

Here are my goals for 2012: smartpassiveincome.com/my-2012-goal-p… – Can’t wait to recap at the end of the year!
— Pat Flynn (@PatFlynn) January 2, 2012

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My 2012 Goal Post
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Revisiting My 2011 Goals – The Results

Pat — Sat, 31 Dec 2011 00:19:12 +0000

Three-hundred and sixty-four days ago I published My 2011 Goal Post - and as the year 2011 comes to an end, it is now time for my performance report.

Setting goals is extremely important, but it’s even more important to evaluate your performance toward those goals so that you can understand the four W’s of self-evaluation:

What went wrong…
What went right…
Why, and…
What’s next.

To quote myself from a year ago: “Some things in 2011, naturally, will happen unplanned.”

And of course – they did.

I met a lot of my goals, and some – I completely missed.

Here’s a recap of my goals from one year ago, what I learned and where I stand now.

Goal: Coach 20 Students to 20 “1st Page of Google” Niche Sites by March 31st, 2011

At the beginning of the year I co-conducted a niche site coaching program – an 8 to 10 week intensive course that taught a handful of students how to build successful niche sites from scratch.

Several hundred people applied for this coaching course when it was announced, even though the Niche Site Duel Hub walks people through the same process from start to finish, for free.

Even though most of the material was basically the same, a lot of people were still interested in it because:

It was delivered in more detail via an interactive webinar session each week;
There was homework, which kept people on track;
Accountability checks to make sure progress was being made; and
Access to an active community.

This was my first time coaching a group of students – and the experience was amazing!

It’s definitely not a passive form of income, but I was extremely happy to trade my time here to teach a passionate group of students. It was awesome to watch them learn, take action, see results, get excited to take things to the next level.

So – did I meet this goal?

To be honest – no, I didn’t.

We had 20 students go through the first round of coaching, and unfortunately not all 20 students were able to complete the course for various reasons unrelated to the course material.

As I soon learned, a 100% success rate is an ambitious, yet difficult goal to meet – but that HAD to be the goal because that’s what I had to shoot for. Of course, some things were beyond my and anyone else’s control, but my belief is that a teacher should always shoot for a 100% success rate, even though in reality it probably will not happen too often.

Many students did succeed though.

Several of them created websites for the first time in their lives, and many of them are now ranking in the top spots in Google and making money. One student actually had such good success, that he decided to quit his job and do this full time, which is incredible.

After the success we had with the first round, we conducted a second round and more students were able to come out of it with successful niche sites.

In total, there is well over 20 sites in the top 10 in Google now from students, several in the #1 and #2 spots and making money too – however the second round happened after March 31st, so as far as the deadline, the goal was missed – but I know the courses were a success for those students who completed it.

Goal: Launch My First Premium WordPress Plugin by February 15th, 2011

My attempt at creating WordPress Plugins for the year was a complete failure.

At the beginning of the year I already had two plugins in development.

A beta version of the first plugin was finished by February 15th, but I was unhappy with the end result and was not ready to release something of poor-quality just to meet a deadline. The idea was there, but the execution was not – and that was mostly my own fault.

You see – when doing any kind of software development, especially when you’re outsourcing it like I was – you must be extremely meticulous. Every detail of every page and function must be drawn out, and every possible action that a user can take must be thought of to ensure a good and complete user experience.

I fell into the trap of knowing what I wanted the plugin to do in the end, but I didn’t think of how the plugin would work in its complete form, which is not an easy thing to do.

With plugin #1, it finally came to a point where it didn’t make sense for me to move on with it – so I dumped it. I had other things that required my time and energy.

Plugin #2 was halfway complete, but it started to get too complicated and, for the same reason, I have put it on hold.

Sometimes, you have to cut your losses and know when to move on.

Goal: Launch My “New Business” by April 30th, 2011

This “New Business”, which I actually never revealed publicly here on the blog, was postponed.

The reason was because at the beginning of the year I was contacted by a Hollywood Producer (who actually found me through my podcast on iTunes), to help with the web and social media campaign for a new independent movie that’s coming out this Spring.

I normally (and respectfully) decline requests to do stuff like this, but since this was Hollywood, I had some vested interested in it. Some of you know from my podcast that one of my life long goals was to one day be seen on the big screen, at least as an extra.

This is the single client I’ve been working with over the past year and the experience has been nothing less than amazing.

I’ve learned so much about the movie industry too, and let me tell you – it’s a totally different ball game.

As a result of this business relationship I’ll be credited in the movie as the Director of Web and Social Media, and I actually got to fly to Boston to be on set, as an extra, in the film.

Check one off the bucket list.

I’ll talk more about this multi-million dollar movie soon, but to work with the producers and the rest of the crew was a choice I made over launching this new business, and I’m glad I made that decision.

Goal: 40,000 Subscribers by December 31st, 2011

With one more day left, it’s unlikely that I’ll obtain an extra 4,800 subscribers in time to reach 40k – but that’s okay.

Even though it’s obvious that I missed the target on this goal, I set the target extremely high, as I always do, and ending the year above 35k is nothing to be disappointed about.

The traffic on the blog has been amazing this year, cracking 5000 in Alexa ranking for the first time , including 15,000 visitors in a single day at one point.

I’m extremely happy with how things progressed and where things are headed.

Goal: 12,000 Facebook Fans by December 31st, 2011

As I write this post, my Facebook Page has a total of 16,430 fans – which definitely surpasses my goal for 2011!

Woohoo!

More importantly, the page has never stopped being active.

For that, I am very thankful! It’s an amazing community and an incredibly powerful resource for the SPI brand – so if you’re not yet a fan, click here to become one and say hi!

Big thanks to Thomas Strock, Alex Blythe, Jesus Ramirez, Tram Tran, Kent Olinger, Rivka Kawano, Benny Hsu, Wendy Harrison, Sundi Jo Graham, and Gracie Ruth for being some of the top fans!

Goal: 10 Money Making Niche Sites by December 31st, 2011

After the success with my security guard training niche site from the Niche Site Duel, I wanted to create more niche sites – and I did.

Technically, I did complete this goal. I currently have exactly 10 niche sites that are all making money.

That said – only 3 of them bring in anything significant (at least $100 per month), and only one – the security guard training niche site – is in the thousands per month.

I’m satisfied with the accomplishment, but it would have been awesome to have 10 niche sites all earning thousands per month.

Unfortunately, there were a lot of things holding me back from making this happen – some under my control, and some not:

Time: It definitely takes time for niche sites to get to the top of Google, rank for long tail keywords and begin to make money. Most of these sites were created in the later half of the year and are still a work in progress. Some are taking longer than expected to climb the rankings.
Focus: Although niche sites really excite me, and I still get a high from earning my first dollar on each new site that I create, I had other projects of higher priority that deserved my focus. One of those projects was taking my existing security guard niche site and optimizing it for Adsense. I think it worked out though, because in January of 2011 the site earned $450.80. Last month, it earned $2,170.15
Keywords: Some of the keywords I targeted were significantly less searched for, and as a result, most of them have lower earnings, even with the same amount of traffic. Part of the reason was because I knew I it would take less work and time to rank at the top of Google, but that was the trade off I made knowing how many other things I’d have going on during the year.

I still feel niche sites are a great introduction to making money online, and I will have plenty of updates in 2012, including version 2.0 of The Backlinking Strategy that Works (which is essentially the same, just a few minor tweaks from what it is now), more income reports and new sites and experiments revealed.

Goal: Speak in a Panel at Blog World Expo 2011

I’m happy to say that this goal, which was actually a dream of mine since I started SPI, came true in 2011.

But instead of being on a panel, I had my own 1 hour solo presentation, and according to those who attended – it rocked!

Goal crushed!

Even though my slides were all jacked up, I still gave a presentation that was well recieved by the audience, as well as everyone who listened or watched the recording, which you can find here.

Later, I found out that I had the most attended non-keynote presentation in the entire conference, and several people shared that it was the best presentation they sat in on. I was even invited by Rick Calvert, the founder of Blog World Expo, to come speak in New York next year!

I’m truly blessed to be able to have lived out this dream this early in my blogging career, and I can’t wait to experience it again soon.

2011 Overall

So that sums up my evaluation for 2011, and as I mentioned before, many unplanned things happened, both good and bad, but that’s expected.

Overall, I’m extremely happy with my progress and I can’t wait to share my goals for 2012 in my next post after the new year.

Thank you all for making 2011 an awesome year for myself and the SPI brand, and as always I will continue to give back even more in 2012.

Have a safe, happy and healthy (and profitable) New Year!

Cheers!

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Revisiting My 2011 Goals – The Results
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Pat FAIL – My Past Business Ideas That Didn’t Work Out So Well

Pat — Thu, 20 Oct 2011 00:30:29 +0000

I’ve had a lot of success online, but I’ve probably had even more failures – and I’m very thankful for each and every one of them.

Without my failures, I would not be where I’m at today.

As Winston Churchill once said, “Success consists of going from failure to failure without loss of enthusiasm.”

It’s a lot like dating actually.

We date people we like and are interested in, and sometimes it just doesn’t work out. We take those experiences, what we liked and disliked about our previous relationship, and that shapes who we are in the next.

Things That Just Didn’t Work Out For Me

No – I won’t be talking about my ex-girlfriends today, but I will be talking about some of my past business ideas and ventures that just didn’t pan out the way I had hoped.

Why?

To show you that sometimes your business ideas will fail, but that doesn’t mean you should give up – it just means you have to try something different and keep going.

To disclose, I know that some of these ideas were just not that good or even profitable. Something made me decide to give these a shot and just see what happens, and that’s the beauty of doing business online – it’s relatively inexpensive and low-risk to just try something out.

I’d happily try 9 stupid ideas if that meant the 10th one is a homerun.

Here are a bunch of ideas that just didn’t pan out:

A Couple of Thoughts

When GreenExamAcademy.com took off and I started to realize the power behind publishing content online, I thought it would be interesting for my fiancee (now wife) and I to do a relationship blog together where we’d talk about the things leading up to our wedding and beyond.

The idea behind the blog was to pick a debatable and interesting topic each week and we’d both write an article about it. They would show side by side on the homepage and it would provide an interesting male vs. female perspective on things. We’d each have a chance to respond to each other’s articles too and people could comment, respond and pick sides (maybe vote) and that sort of thing.

I purchased acoupleofthoughts.com, got a customized “side-by-side” theme from Elance and we wrote a couple of articles.

After a few drafts we decided that it just wasn’t going to be as much fun as we had thought. Plus, we hadn’t set any goals or envisioned really what the purpose of this project was.

From this experience I learned that there needs to be some kind of goal and vision for what you want a site to become. Even though things may change, having a vision and goals definitely helps (and may even help you decide something is not a good idea in the first place).

Brain Tees

This was the name of a store I setup on CafePress.com, a website where you can create unique t-shirts (among other things) and sell them for a profit. They handle the delivery and customer service for you, and all you have to do is come up with ideas that will sell.

The idea behind Brain Tees was that it was going to sell nerdy and geeky apparel, like T-shirts that say “I love pi” and other things that made you think.

Like a brain tease. (Get it?)

Anyways, I setup braintees.net as the storefront, designed a couple of t-shirts and started to “market” by showing family and friends my creations. After a month or so I had no sales, was not feeling inspired to create more designs, and I just let the domain and store expire.

From this experience I learned that I enjoyed blogging and providing information online more so than e-commerce and retail.

How to Memorize Anything

This was my first attempt at a niche site, although I didn’t even know it at the time. It wasn’t based off of keyword research though (like in my niche site duel), it was based on the request of several of my existing customers who were studying to pass the LEED exam:

How can I train myself to learn and memorize all of this information?!

To help, I built a website (how-to-memorize-anything.com) that included training and exercises to help one be able to memorize things like facts, lines (like in acting) and names.

The unfortunate thing was…I’m not that good at memorizing things!

I really had no business being in the space and no real training and knowledge to share with others.

Knowing the LEED material and presenting that information in a way that can be easily consumed and memorized is what I was good at, but as far as the actual mechanics of memorization and tapping into the potential of one’s brain…yeah – not so much.

From this experience, I learned that even though there may be good ideas for sites out there, sites that would actually help people, that I don’t have to always be the one to create them. I learned to focus on what I’m good at and stick with that.

Review Websites

For a while, I was really excited about creating niche user rating and review websites, sort of like Angie’s List but for things related to what I knew about – like architectural firms, architecture schools, design software, and green building materials. I had this whole master plan of creating one of the sites and using that same exact structure or template for the others.

It was a great idea, and I still think it is, however once I got going I just wasn’t into it. Those types of sites really take the “me” out of things, and I think the reason why I love working on sites like GreenExamAcademy.com and SPI, and even SecurityGuardTrainingHQ.com to an extent, is that they are blogs and I can put my personality into it, if not through sharing stuff about who I am, then at least in my writing style.

From this experience, I learned really what kinds of sites I enjoy working on this most, and so this is where most of my attention and focus is now given.

WordPress Plugins

Old-school SPI fans will know that for a while I was talking (a lot) about a couple of WordPress plugins that I was having developed. They were plugins that were going to fulfill a need that I had and I was going to either give them away or sell them for a small price to create a new income stream.

One of them is on hold now just simply because it’s a huge undertaking and I’m still in need of someone to design the user-interface.

The other one was completed, but not to my liking so it was never released. This is my fault because I didn’t do a good job of explaining exactly what I wanted and exactly how I wanted it to work, and even though it’s done and it works I’m not going to put anything out there under my name and brand that is subpar.

When you’re working with developers you really have to give them as much detailed information as possible.

The sad thing is that I already knew this. My iPhone application company hires people to develop our apps all of the time, but the “I need to get this out as soon as possible” mentality actually set me back and made for a less than stellar product.

From this experience, I learned that if I do anymore software development, to make sure that I give the developer exactly what I want, and to make sure I know what I want in the first place too so I don’t make it up along the way.

I’m Proud of My Failures

I don’t feel any shame in sharing what I’ve tried and failed at because they all made me stronger as an entrepreneur.

I hope this encourages you as you work on your own businesses and helps you realize that you just have to keep trying. If something doesn’t work out, that doesn’t mean you’re not destined to succeed, especially if it’s your first go at it.

Every failure is one step closer to success – as long as you learn from your experiences.

Oh, and I almost forgot! If you have 20 seconds to spare I would love to know how you found out about me and SPI. I’m conducting a quick one question survey that will be used in my presentation at Blog World Expo on November 4th.

Please Click Here to Help Me Out

Also, if you will be attending Blog World Expo I was able to get an SPI 20% off discount code. You can sign up through this link here and use the discount code BWESPI20 to receive the discount.

Thanks again! Cheers, and all the best to you!

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Pat FAIL – My Past Business Ideas That Didn’t Work Out So Well
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An Insider Look: My Affiliate Links and Exactly Where They Convert

Pat — Mon, 25 Jul 2011 22:57:00 +0000

I received an interesting email from an SPI reader over the weekend:

“I don’t get it Pat. You make all this affiliate income (your June income report was off the hook!) and you have never come across as being pushy or aggressive with your promotions. I read your blog and am subscribed to your newsletter and you have never sent me anything but content, and somehow you’re earning a CEO’s income. I hope this isn’t rude, and it’s not that I don’t believe you, but how exactly are you doing this?”

To answer this question I can break it down into 4 key concepts:

Provide massive value.
Earn massive trust.
Learn and understand the needs and wants of your followers.
Lead and teach by example.

Combining these 4 concepts together allow me to share products (some of which I am an affiliate for) without being hawkish, and instead of worrying about losing readers, subscribers and potential customers, I’m actually strengthening the relationships I have with them.

For many of you, this isn’t groundbreaking news – and some of you are already putting these concepts into practice, which is fantastic.

Today, however, I wanted to provide you with a more detailed and concrete example of how I earn an income from affiliate programs, specifically illustrating where on my site (and “off site”) sales are coming from.

Getting Into the Details

In my June Income Report, you can see that I am an affiliate for nearly 30 different products and services – for SPI and for other niche sites and businesses that I own.

The most profitable product/service was BlueHost, a domain and hosting company that I use and recommend to anyone looking for a relatively inexpensive, quick and easy way to setup a website. In June, I referred 79 people to Bluehost, earning over $7000.00 in commissions.

Although June was a record month of affiliate earnings, for Bluehost and overall in my business, Bluehost has consistently been one of the top contributors to my monthly affiliate income.

Lets analyze.

Honest Recommendations Work

My most important rule for affiliate marketing is: I only recommend products as an affiliate that I’m extremely very familiar with – preferably products that I’ve used and have helped me achieve something. If I’m not confident in the product and I don’t feel it will positively help people, I will not promote it.

Although affiliate products are created by others, the moment you promote something you become a representative of that product and it reflects on you and your brand.

My second most important rule for affiliate marketing is: I never directly tell anyone to buy a product. I always recommend products based on my experience and in the context of what I’ve done or what I’m doing.

There’s a huge difference (on several levels) between:

“Buy [product] now because you need it to grow your online business…”

and

“This is how I used [Product] to help me achieve…”

I obviously have used Bluehost, and I still do (on all sites except for SPI, which needed an upgrade due to traffic and activity), and I am very familiar with how it works so I can be there for some support if it’s needed, which makes people much more comfortable with their investment.

Show ‘em How It’s Done

As I just mentioned, affiliate product recommendations are much stronger if you actually demonstrate how the product works and how it’s used.

I do this many times on several different platforms for Bluehost:

The Infamous 4-Minute Blog YouTube Video: This is a video I created that walks people through how to setup a domain and hosting account (and install WordPress) – in less than 4 minutes. The “less than 4 minutes” part is important because it’s differentiates my tutorial from the thousands of other tutorials out there, and also that it can be done quickly. This video has been viewed over 10,000 times.
The Niche Site Duel Posts: In this series of posts I take people through my transparent journey of building a niche site from scratch and turning it into a business that now earns over $1,000.00 per month. During this process I show people exactly how I built an SEO optimized website.
My Getting Started Page: This is a page that I recently created for people who are brand new to my site. On this page, I talk about some of the first steps to take, which include setting up a domain and hosting account, and I embed the 4-Minute Blog video to go along with it. You’ll see later in this post exactly how this page converts.
The SPI Podcast: On a few of my sessions on the SPI podcast, I’ve mentioned Bluehost as the hosting provider that I use. To make it easy for listeners to use my affiliate link, I created a short link using the Pretty Link plugin which make my affiliate link on audio much easier to remember.
My Resources Page: This is second most visited page that is clicked on in my navigation menu (My Income Reports is first). Here, I include products that I’ve used during my online journey that have helped me get to where I’m at today.

So Where Exactly Are My Commissions Coming From?

This is for Bluehost only in the month of June 2011:

The SPI Homepage – 20 referrals: These are from clicks on the 125×125 Ad in the sidebar. Part of this comes from the 4-Minute Blog video, which instructs people to click on that ad in my sidebar. If I could go back into time, I would have instead done a video-specific short URL, like I did for the podcast. Then I could better track how the video performs.
My Resources Page – 20 referrals: Like I said, this is one of the most visited pages on my site. If you’re not utilizing a resource page for your niche on your site, you’re crazy! It’s the ultimate non-aggressive way to earn money leaving all parties happy in the end.
How to Setup a Niche Site – 10 referrals: This is one post out of several in the Niche Site Duel series.
My Income Reports – 9 referrals: In each of my income reports, I include links to each of the products and services that have generated an income. These 9 referrals were even distributed through March, April and May’s income reports.
Getting Started Page – 9 referrals: This brand new addition to my site, which introduces myself and my blog to new visitors, is definitely paying off for the time invested to set it up. You can learn more about why I setup this page here.
Other Pages on SPI (10 total) – 11 referrals: Several other pages that briefly mention Bluehost have converted for me as well. Each only have one or two conversions, which is why I didn’t write them out individually. People may arrive on these specific pages from Google searches, from exploring on SPI, or from a direct link from a podcast or referring website.

The beauty of all of this is that it’s virtually 100% passive income. The 4-minute video, all of the blog posts, the podcast sessions, and the resource and getting started pages have already been published and are up for anyone to view at anytime, for now until the Internet dies.

I can work on providing more value and real life experiences to share, and as a result more people will be exposed to these affiliate income opportunities – and that’s really what it’s all about when it comes to this kind of affiliate marketing, specifically from a blog.

Plant seeds, nurture them and watch your income grow.

I hope you’ve enjoyed this insider look at one specific piece of my affiliate income pie, and remember that I have over 30 different products that I promote with a similar, non-aggressive approach which doesn’t upset my followers and allows me to sleep at night knowing I’ve provided some value and help along the way.

I’m interested – what are your thoughts are on the non-aggressive vs. aggressive promotion approach online, especially since most of you are probably familiar with both as a content consumer. Does the aggressive approach still work? Is it all about getting the “low-hanging fruit” and that’s it? Or, do you feel this passive approach to marketing provides for a more long-term internet business?

Please let me know what you think. Cheers!

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An Insider Look: My Affiliate Links and Exactly Where They Convert
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How to Protect your Blog’s Assets

Pat — Wed, 20 Jul 2011 17:18:12 +0000

This is a guest post by John Corcoran from California Law Report. John is a lawyer and blogger who understands that there are a lot of people who blog and do business online who don’t take the necessary precautions to legally protect themselves and the assets that they’ve created. Although laws differ depending on where you live or where your business resides, this is really important advice – and probably a reminder to a lot of you who have been meaning to take action, but have yet to do so.

Even though John is a lawyer, he is probably not your lawyer (if he is, then that’s cool!), so before you decide to take action based on the information presented in this post, it is recommended that you first consult with your own attorney.

I, of course, am not a lawyer.

Cheers, and here’s John:

Pat recently wrote a post on The Dark Side of Successful Blogging in which he explained the many negatives he has had to deal with as SPI has experienced explosive growth over the past less than three years.

Just like any successful business, successful bloggers experience growing pains as they begin to gain a following. Usually success means outgrowing an original hosting provider or email marketing provider, as well as countless themes, plugins, affiliates, and maybe even phone systems or office space.

What successful bloggers usually don’t realize as they are building a following and watching their income grow each day is that along the way, they’ve built some major assets which need guarding and protection. The domain, the blog itself, the brand, even a Twitter account with substantial followers can all quickly become extremely valuable assets. And on the list of “to do” items, I’m willing to bet that setting up legal protections to guard blog assets falls pretty far down on the list.

If you haven’t already, you should be thinking now about how you can legally protect yourself and the valuable assets you have created.

You could be sued by an affiliate who claims they are owed thousands in unpaid commissions, or by another blogger who claims you stole their “idea.” No matter the dispute, if you leave yourself exposed, your hard work could go down in flames.

You wouldn’t buy a $100,000 condo without really protecting yourself from losing it (such as by purchasing insurance), yet some bloggers build a $100,000 blog without building adequate protections. Personally, I think that’s nuts.

Of course, every blogger’s life situation is different, and the laws will be different depending on where you live. But there are certain similarities and principles which are universal when it comes to setting up a legal structure to protect your interests wherever you live.

You will also need to decide when your growth is significant enough to justify the significant contribution of time, energy and money to separate all of the business of your blog into a new separate legal entity.

How to Form a Legal Business for Your Blog

The first step is you should form a separate legal entity, owned by you, which “houses” all of your blog’s assets. Every state and country has different laws and names for this particular legal entity, but in California, where I practice law, the best entity is a Limited Liability Company (LLC). The LLC may go by another name depending on where you live.

Why should you choose to form a LLC instead of a corporation?

A LLC is a highly flexible and customizable legal entity that gives you the peace of mind of knowing you are protecting your assets without throwing up burdensome legal barriers and maintenance requirements. A LLC is generally easier to set up, cheaper, and more flexible with fewer formal requirements than a corporation. On the other hand, a corporation does have certain advantages, namely that it can take on investors (shareholders) who have limited liability for the corporation’s debts or actions. In most cases, the advantages of forming a corporation are outweighed by the increased burdens which corporate formalities bring — especially given that most bloggers don’t need to bring on investors.

Pat previously wrote a guide on how he set up the LLC for his blog which you can follow.

If you have business partners for your blog, then you will also need to prepare an Operating Agreement. The Operating Agreement spells out the nuts and bolts of the business; it is the “Constitution” which guides the business.

If one of you is going to handle 90% of the writing and the other is going to handle 100% of the affiliate programs but you’re going to split the profits 50/50, then you should put that in the Operating Agreement.

If you are a single blogger and don’t have any partners for your LLC, then you do not absolutely have to have an Operating Agreement. However, if you have one or more partner, you should definitely have an Operating Agreement, and I recommend you spend some time hammering out the details. Although companies like LegalZoom will provide you with a boilerplate Operating Agreement, you and your partners should consider customizing it or hiring an attorney to do so.

Use the Legal Entity For All Business Matters

The second step is you need to use the legal entity of your choice religiously for transacting all business related to your blog. Simply creating the LLC doesn’t waive a magic wand which will protect you and your assets from any harm.

The number one problem with LLCs isn’t that people don’t set up a LLC to begin with; it’s that people set up an LLC and then don’t use it. They commingle their business funds with their personal funds in one checking account. They don’t sign contracts in the name of the LLC. They don’t purchase goods in the name of the LLC.

They might as well have never formed the LLC, because the LLC can’t protect you from liability if you use your own personal name to conduct business.

It’s like buying a bulletproof vest and then leaving it hung up in your closet. It can’t do you any good unless you use it.

You need to transfer all blog business-related assets like domain names and hosting accounts into the name of the LLC. The new legal entity will become the actual owner of the blog, but don’t worry – you will own the LLC so it won’t change your income or ownership rights. Your affiliate and sales income is treated the same way as it was previously – it is passed through to you.

You can change your domain name’s ownership registration with whoever you used to register your domain.

Here are links for how to change your domains with GoDaddy.com and with Bluehost.com.

Open a LLC Bank Account

The next step is to set up a separate bank account in the name of the LLC. One of the most common problems with small business owners is that they commingle personal assets and business assets in one shared bank account. When you do that, you put yourself at risk that the LLC will be treated as if it was not a separate legal entity.

To avoid this problem, you should open a separate bank account in the name of the LLC and use it exclusively to pay bills such as for your hosting provider and to receive affiliate income and/or sales income. You can then transfer the funds from the LLC’s account to your own personal account.

This extra step is crucial if you want to keep the LLC treated as a separate legal entity. If the blog is later sued for whatever reason, and you did commingle funds, your other personal assets could be at risk because a court might treat the LLC as just an extension of you personally.

Get a Federal Tax Identification Number (EIN)

If you are a resident of the U.S., the next step is to get yourself a state and federal Employer Identification Number (EIN). You can get your EIN electronically directly on the IRS website.

Set Aside Enough Money for Taxes

Finally, don’t forget to set aside enough money for taxes. Because LLCs pass through all income to its owners, it is the owner’s responsibility to pay income tax.

I hope the above tips don’t take too much of the “fun” out of building a successful blog, but I believe it’s much better to take a few hours to get all legal matters in order than to pay the consequences in the long run.

John Corcoran is a lawyer and blogger with California Law Report (www.calawreport.com). He lives in the San Francisco Bay Area. You can sign up for John Corcoran’s 10-part series on how to set up a business at his blog.

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Gizmos and Gadgets For Online Business and Blogging

Pat — Mon, 17 Jan 2011 09:04:54 +0000

As a blogger who does both video and podcasts, I’ve invested in a number of gizmos and gadgets to help me run my businesses. Below, you’ll get an over the shoulder look at exactly what I’m working with. Also, please note that some of the links below are affiliate links to Amazon.

The Desktop Computer

Currently, I’m running a 24″ iMac Computer. This piece of hardware was my very first Apple purchase made back in October of 2006 and I’m extremely satisfied with it. It’s really handy for all of the graphic design and other multimedia stuff that I do on a daily basis. Plus, because I have an iPhone app business, the Apple computer is quite necessary.

For those of you who want the specifics, it’s a 2.4 Ghz Intel Core 2 Duo with 4 GB 667 MHz DDR2 SDRAM, and her name is Betsy.

The Mouse

I prefer Apple stuff for most pieces of computer related equipment, however when it comes to the mouse I just can’t get used to any type of Apple mouse.

For one, I really need to feel the click, so any type of touch sensitive mouse just won’t do. And secondly, there’s one particular feature in a mouse that I just need to have – a hyper scrolling wheel.

I love hyper scrolling because it allows me to move up and down any page with lightning speed, and the wheel allows me to have more control. In particular, this is very handy when writing blog posts because I usually don’t write my posts straight through from top to bottom – I bounce around a lot and hyper scrolling allows me to easily navigate while constructing my posts.

The mouse I use if a Logitech VX Revolution. It’s a wireless laser mouse with an ergonomic design that you can see below (and yes, my mouse pad is a bamboo cutting board. Unfortunately, a laser mouse will not work on a glass table):

The Laptop

In addition to the iMac, I also have a laptop computer.

The laptop is not used for my business at all, but I thought it was important to add it here to the list because it is what keeps me sane (and my wife sane too).

You see, I wrote a post in mid-2010 entitled, The Most Important Conversation I’ve Had About My Business Ever where I discuss how my wife and I were having a hard time figuring out when I was working, and when I wasn’t.

If you’re an entrepreneur working at home, you’ll understand that it can be very difficult to draw the line (both physically and mentally) between work and non-work activities on the computer, especially with things like Twitter, Facebook, and the Internet. It’s really easy to just jump on the computer at any hour of the day to get more work done, because as an entrepreneur our work is never really finished, and there is almost always more that we can do.

My solution was a second computer – a laptop, which would only be used for personal, non-work related things only. This way, when I’m in my office on my iMac, everyone knows (including myself) that I am working on business related items. When I’m on my laptop, it’s “just for fun” so it’s a little easier for my brain to turn off “work mode”, and it’s a lot easier for my wife to understand that she can interrupt.

You might think that this is just a clever excuse to get a second computer, but almost a year after purchasing the laptop I can tell you it’s been working just like I had hoped.

As far as the kind of laptop, that’s not really important here – but in case you were wondering it’s a 13″ MacBook Pro.

The Pen and Tablet

One of the most frequently asked questions I receive is about how I create some of my YouTube videos.

In these particular videos I use an electronic blackboard to teach something, but really all you’re seeing on the screen is an image of a “blackboard” I created in photoshop and a recording of myself writing on top of it.

To record what you see on your screen, I use Camtasia for Mac (Camtasia Studios for you PC users), although you could use ScreenFlow here as well.

To actually write on the screen, you could use your mouse, but it’s very difficult to get any decent penmanship with it. That is why I use a Wacom Bamboo Pen and Tablet.

I absolutely LOVE this thing and often find myself using the pen instead of the mouse even when it’s not necessary.

If you have photoshop, it also reads the pen pressure so your writing looks like actual handwriting, and if you flip the pen upside down it acts like an eraser too.

The Pocket Video Camera

I’m in Love with my Kodak Zi8 pocket cam, not only because it takes ridiculously sharp HD video, but also because it’s one of the only pocket cams available with an audio input jack, which allows me to use my podcast microphone to get some high quality audio into the vids.

I picked up this little guy before Blog World Expo in hopes that I’d use it to interview everyone that I met, but of course I only pulled it out to take video of the Ferrari’s and Lamborghini’s parked outside of the Hotel Entrance at Mandalay Bay. Lately, however, I’ve been using it in the office to shoot some videos for the blog and some new projects that are in the works, and the quality is just out of the world.

Here are a couple things I’ve learned about pocket cams in the short while I’ve been using my own:

Unless you’ve got the most steady hand in the world, the videos will always come out a little wobbly if you’re not using a stand or tripod. My wife has literally gotten sick a few times watching some of the videos I’ve taken of our son. When shooting videos of myself, I just setup the camera on my desk with a flexible mini-tripod (like this one) to keep it still.
Sometimes, I have the camera in the perfect position and when I press the button in the back to record, I move the camera and have to start all over again. To make it easy on myself, I purchased a little Kodak Pocket Cam Remote Control which I can use to control all aspects of the camera from my recording position.

The Podcasting Microphone

I think I’ve gone through 3 or 4 different microphones before I finally landed on “the one” – a Heil PR40.

When it comes to podcasting equipment, I don’t know jack when it comes to the technical and geeky stuff behind it. All I know is that I’ve tried a lot of other recommended microphones, and this one by far produces the best sound quality.

It is not a USB mircophone – it has a regular 3-prong jack like you’d see on professional microphones that musicians use, so in addition to the microphone you will need a mixer as well, plus the cables to connect the mixer to your computer. It’s a lot of equipment, but if you’re serious about recording some high-quality audio, this is the kind of stuff you need.

In addition to the microphone and mixer (a Behringer Xenyx1002), I also have:

A wind screen (also known as a “pop filter”), which is placed in front of the microphone so it doesn’t record any breathing or “popping” sounds that can sometimes occur when you say words that begin with the letters B or P.
An arm (which looks like an architectural studio lamp) that allows me to swing my microphone in a position that is easy to record with.

I’m also planning to get a “shock mount”, which holds the microphone and absorbs any vibrations that can happen during the recording to improve the overall sound quality

If you’re going to be purchasing podcasting equipment anytime soon, I highly recommend getting a package from Cliff Ravenscraft of PodcastAnswerMan.com. He’ll set you up with everything you need just like he did for me. Here is an episode of PodcastAnswerMan where Cliff specifically talks about the Heil PR40 microphone and how it compares to others.

The iPhone

The iPhone is important for my iPhone app business for obvious reasons, but it’s also important for all of my other businesses as well.

It allows me to stay connected to my followers on Twitter and Facebook.

It gives me the ability to upload notes (including voice notes) on the cloud using the Evernote application, which I can later access on my computer in my home office.

It gives me the ability to listen to podcasts and read other people’s content while I’m on the go, because I’m always trying to learn more.

I can use it to take high-quality pictures that I can use in my blog posts, just like in this one.

Peace of Mind

This last piece of equipment isn’t absolutely necessary, but when you think about how much our businesses rely on all of the equipment that we use – that if someone were to take that equipment we would no longer be able to do business (sorry, I’m not trying to scare you, but it’s true) – then maybe it is absolutely necessary.

This piece of equipment is a security camera.

There are a lot of at-home security cameras available, but I use the Logitech Alert 750i Security System and it gives me the peace of mind that I need when the family is away from home. Here’s what’s cool about this system:

I can view the camera from my iPhone through a securely connected Logitech iPhone application.
I can view the camera through the web, through a secure connection.
I can set it up so that it can send me an email or text message whenever motion is detected.
It records everything and stores it in a mini-chip inside the camera, and also onto a computer.
It’s all wireless and runs through a router, so the camera doesn’t need to be setup next to a cable modem – all it needs is an electrical outlet.
I can even zoom in and pan around the room a little.

It’s one of those things you setup to hopefully never use for what it’s intended to be used for, but it really does make me feel better that it’s setup and ready just incase.

Equipment That I Am Planning To Get

This post went longer than expected, so I left a few important pieces of equipment out that I just wanted to quickly mention before I move onto what I plan on investing in next. Specially, I’m talking about an office printer/scanner (A Canon MP830) and an external hard drive for backup

There are a couple of major purchases that I plan to make in 2011 to help with my businesses:

The new iPad. I intentionally held off on the first iPad because I knew there was a better one that was eventually going to come out (there always is with Apple, right?). This purchase will be helpful both for my iPhone app business (which we do want to expand onto the iPad platform soon), and for productivity purposes here in my office and while away for events like Blog World Expo.
A green screen. I’ll be shooting some high quality video for some membership sites and courses at the tail end of 2011, and a green screen could be a great way to add some unique touches to the video to make them more presentable and memorable.

We’ll see what happens. Until then, Cheers and have a wonderful week!

So what’s your favorite gizmo or gadget that you use for your online business or blog?

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The No Fail Approach to Product Creation

Pat — Mon, 25 Oct 2010 07:47:58 +0000

Market research, surveys, focus groups, middlemen, test markets – these are all things that people (and companies) spend a ton of money on to ensure that a new product they create with will become a winning product.

You can I – the bloggers, internet entrepreneurs and small online businesses owners of this world, can utilize many of the above strategies to ensure that whatever products we construct will become winners too. Whether it’s for a future product such as an eBook, course, membership website or software (or even physical products if that’s what you’re into), we have the convenience of working online to easily and inexpensively conduct market research, create surveys, find focus groups and run test campaigns.

There is, however, one particular no fail strategy that we can all use to create the next winning product.

To fill you in, I’m going to quote my new favorite book, Rework by Jason Fried & David Heinemeier Hansson, who are the founders of BaseCamp:

“The easiest, most straightforward way to create a great product or service is to make something you want to use.”

It’s as simple as that.

When you “scratch your own itch”, as the authors like to call it, you accomplish several things:

You Solve Your Own Problems (And You’re Not Alone!)

Because you’re creating something for yourself, you’re solving your own problems. If the product you create doesn’t sell one copy or help anyone else, at least it has helped you, and that’s something you can be happy about.

In most cases, however, there are hordes of people out there with the exact same problems that are looking for a solution just like the one you’re building for yourself.

When I created GreenExamAcademy, all I was doing was building an online resource to help myself pass the LEED exam. I would have been happy just studying for the exam and passing the test, which I did. After several months, I discovered that thousands of other people were flocking to my site to help them pass the LEED exam too.

That’s when I turned that site into my first online business.

You Become Your Own Customer

Part of the problem with creating a product is not fully understanding the exact needs and wants of your audience. Since you are essentially your own customer, you’ll have a much easier time designing and delivering the content that needs to be delivered.

Many times, you’ll hear people say “put yourself in the shoes of your customers”. Well, that won’t be a problem since those shoes are yours.

When I created eBooks the Smart Way, I created that book for myself. It includes everything I wanted to know back when I wrote my first eBook for GreenExamAcademy. Even though it was written after I had published my first two eBooks, I wrote it as if I had the ability to go back into time and give it to myself before I wrote my first one.

Not to toot my own horn, but people are telling me that eBooks the Smart Way is one of the best and easiest to read guides on publishing and selling an eBook, which is exactly what I want it to be.

You Become Your Own Test Market

After you’ve completed a product for yourself, it’s easy to test on your own and quickly make any necessary updates or changes.

If you’re designing something for somebody else, it takes a lot of time to go back and forth between parties and even when changes are suggested, they are not always put into place correctly the first time around.

You Become The Proof

You may have heard this quote before:

“I’m not only the president, but I’m also a client.”

This famous motto is from the Hair Club for Men commercials (here’s a clip from youtube), and is a perfect example of “you become the proof”.

If you can create a product for yourself and show that it works, you’ll be more likely to get other people excited about that product too.

My Upcoming Special Project

The reason for writing this post, other than because Rework is one of the best books I’ve read in a long long time and I just had to expand on this particular idea of “scratching your own itch” here on the blog for you, is because I’m soon coming out with my own product and I’m definitely scratching my own itch.

I cannot disclose exactly what the product is just yet, and yes I’m partly trying to create buzz for it (I’m just being honest!), but here’s what I can tell you now:

This product is not an eBook, course or membership website about how to blog, make money online or anything like that. Even though I’ve been asked several times to create one (and people have offered to pay me if I created one, which is totally awesome, thank you!), I think that’s just what everyone expects me to do next. Although I may eventually do something like that, I know that part of the reason why people follow me and why SPI has blown up is because I do things a little differently here, so I’ll continue to step out of my comfort zone and try something different.
The product is actually a WordPress Plugin that I so desperately need. There is nothing like it available today, but even if no one else downloads it, I’ll be happy because it will save me hours a day, and make my life as a blogger and internet entrepreneur a whole lot easier.
I’ve already found a plugin developer to work with me on this project, and it’s underway as we speak.
The few people I have discussed this project with (some who are A-list bloggers that I met at Blog World Expo), were really excited about it too.

Because it’s for me, the mock-ups were really easy to design and I know once it’s live on this blog, you’ll see just how useful it can be.

I’m sorry to leave you hanging like that, but there will be more on this special project soon. Once it’s revealed, you can be sure I’ll go over the process with you from start to finish.

Thanks for your support, and I wish you all the best. Cheers!

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A Typical Monthly Expense Report

Pat — Fri, 23 Jul 2010 07:17:36 +0000

This is something a little different…So far, I’ve published 20 monthly income reports, and 1 annual income report. However, I’ve never posted anything in detail about my expenses, until today.

I don’t know exactly why I have never included them in my reports. Maybe it’s because when I first started doing these reports there were virtually no expenses to take into account. That being said, I do know that many of you are curious to see what a typical month looks like, so here it is.

The following is my expense report for June of 2010.

Standard / Flat Monthly Fees For Doing Business Online

These are fees that I incur each and every month, independent of how much I actually earn, or how many items I sell.

Hosting & Domain Fees: about $20/month

Using the hosting and domain services from Bluehost, I have a couple of accounts under the $6.95/month plan, and a number of sub and add-on domains that don’t even work out to a buck a month ($10/year, or $0.83/month).

Email / Autoresponder Fees: $66.15/month

A 12-month package from Aweber costs me $193.80, which comes to about $16/month. An extra $50.00 a month is added on because I have email lists that total between 5,000 and 10,000 people.

Shopping Cart Fees: $35/month

These fees are flat monthly fees for the tools I use to make automatic transactions happen with my eBook at greenexamacademy.com. E-junkie costs me $5.00/month, and Paypal’s Website Payments Pro is $30/month.

Side note regarding Paypal’s Website Payments Pro: I do understand that I could instead use the standard paypal checkout method for absolutely free. That will allow me to accept credit cards as payment for my e-goods, however, there are two major problems with the standard checkout method:

When customers click on “Pay Now” or “Buy Now” (or whatever call to action you use), they are taken to Paypal’s website. Here, they can log into their Paypal account, or pay with a credit card. The thing is, the link to pay with a credit card is tiny and almost hidden, which forces a lot of people to think they need a Paypal account to purchase the product. Those who don’t have a Paypal account are more than likely to leave. Not cool.
Secondly, the transaction happens off of your site. The customer actually leaves your site and is taken to Paypal’s payment processor. E-junkie allows the transaction to stay ON your site and include a little bit of branding during the checkout process at the same time, which is very nice. The more you zig and zag your customer around to different sites, the more chances there are of that person leaving with an incomplete purchase. Not cool either.

Online Media Storage Fees: $12.00/month

I use Libsyn to host my media files online, such as my podcast, my webinar replay, and actually my eBook as well. This ensures that my blog server won’t crash if there’s a sudden rush to download certain pieces of media, which I hear often happens, especially when new podcast episodes or new videos are published on the blog.

I looked at Amazon S3 for an online storage solution, but I felt more comfortable dealing with the flat rate from Libsyn, then with fractions of a cent per gig of bandwith transfer with S3. it’s much easier to budget for.

TOTAL FLAT MONTHLY EXPENSES: $133.15

And just as an aside, if you’re just starting out, you don’t need all of these things right from the beginning. You can host your media files on your own site, and if you’re worried because you want to do a lot of videos, host them on YouTube instead. It’s free, and you can get search engine traffic off of YouTube as well.

Also, you don’t need the shopping cart fees either. Like I said, there is the option to go the free route with Paypal, and really if you’re just starting out, you should worry about your content and building an audience, rather than how to make a buck from an audience you don’t have yet.

All this being said, it only takes a couple of eBook sales, or just one affiliate commission on some certain products to make up the entire flat monthly expense.

Standard / Flat Fees For Business Improvement (In General)

The following fees are all fees associated with things that can help my business even further. You don’t have to spend money on any of these things, this is just what I do – which you’ll see why below.

Bookkeeping Fees: $50.00/month

When I started to make good money online, I hired a bookkeeper to help keep track of all of my monthly income and expenses, and input them into Quickbooks. This is probably the best $50.00 I spend every month for my business.

Why?

Because my bookkeeper makes my life SO much easier. All I have to do is send her my files from my business checking account, my business credit card, and my paypal and shopping cart – and she does the rest. I spend about 5 minutes a month doing this, and I have numbers every month I can look at in Quickbooks to see how my business is doing. Oh, and this makes tax season seem like a walk in the park.

Because I have a ton of different income streams, it would seriously drive me insane to try and do all of this myself.

Certified Public Accountant: about $35/month

My CPA helps me with all things financial, including where to put my money as well. I’ve saved a lot of money thanks to my CPA, so the cost of such a service is definitely made up in the savings.

Internet Business Mastery Academy: $97/month

I joined the IBM Academy nearly 2 years ago, and I continue to pay my dues because I still continue to learn from it.

Other Fees

I have other fees in addition to the services mentioned in the previous sections. These fees, however, vary each month, but I just wanted to list them here so you know what I could be paying for. The fees that you see next to the item was how much I spent in June of 2010.

The cost of hiring virtual assistants: $149.90
The cost of developing iPhone applications: $700.00
The cost of a piece of software for my business: $0.00
The cost of new equipment that I can use for my business: $0.00
The cost of memberships for something that I can use for my business: $103.00
The cost of utilities because I do business from home: $23.54
Paypal fees (they take a certain % of total cost of each product sold): $103.90
Google Checkout fees (same as Paypal): $8.65
Payouts to Affiliates: $450.00

I may have missed a few things, but I think I have most everything here.

In total, the expenses I incurred for June was about $1,853.24.

It’s kind of weird to look at my expenses, because $1,873.24 is a lot of money, and when I first started out I would never have fathomed spending that much on my own business in a single month. But, my experience over the past 2 years tells me that this is money well spent, and you can’t just look at the expenses alone without understanding why these expenses exist.

Also, you have to consider that I grossed about $13k in June and many of these expenses exist because I am making this kind of money. For example, the Paypal and Google Checkout fees, as well as the payouts to the affiliates – if I didn’t make any money, these fees would not exist.

Additionally, as I mentioned earlier, a lot of these expenses are not mandatory in order to run a successful online business, so don’t be scared of the total expense. I choose to pay developers to create new iPhone apps and I choose to pay for memberships that may help my business, because they are investments that will pay off for me in the future.

I hope you enjoyed this post and it helpful as you got an even closer look at what goes on in my businesses.

Lastly, if you haven’t already done so, please check out my podcast which is now live in iTunes! Ratings and reviews help the rankings, so thank you in advance!

Have a great weekend everyone!

Cheers!

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A Typical Monthly Expense Report
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Here’s Why I Don’t Have a Full-Time Virtual Assistant

Pat — Wed, 03 Mar 2010 09:40:35 +0000

Virtual Assistants, or “VAs” for short, are helping people get more things done each and every day. If you’ve read the 4-Hour Work Week, then you know that Mr. Timothy Ferriss is a huge fan of using VAs for all of the clutter and “the things that I don’t want to waste my time doing in my life” type of stuff. Like many internet marketers and other lifestyle design artists, I’m sure he has several full-time VAs working for him at this very moment.

I, on the other hand, don’t have any full-time VAs. I only hire providers and pay them on a per project basis. I’ll tell you why in a second, but there’s one thing I need to address first.

The topic of hiring VAs is a touchy subject for many, especially when it comes to outsourcing overseas. There are obviously two sides to the argument: on one side, hiring for cheap virtual labor overseas takes potential jobs away from those in the U.S. (or your respective homeland), who may be in need of work. Additionally, the labor can be very inexpensive, almost to the point of being ridiculous and unfair to the eyes of many.

On the other hand, some businesses could not survive with hiring people in the U.S. to do similar tasks that cost much less to accomplish overseas. And at the same time, the low wages that are being offered are actually competitive and comparable to wages in that particular country.

There’s much more to the argument than that, but before I go on, let me just say that this post is not a debate between whether or not hiring virtual assistants, overseas or not, is a good or a bad thing. To tell you the truth, I’ve hired designers and developers here in the U.S., and I’ve hired people overseas as well. I’m just hoping not to start a debate in the comment section of this particular post, but if you must, by all means.

Anyways, back to why I hire VAs only on a per project basis.

There are two mains reasons I do this:

I don’t want to manage a full-time VA.
I want to hire the best VA for the specific job I want accomplished.

Managing a Full-Time VA

I know a lot of internet marketers and entrepreneurs who have full time VAs working for them, and they love it. I also know a lot of internet marketers and entrepreneurs who have full time VAs and are struggling to keep them busy.

Managing a full-time VA is tough. If you can get to the point where you’ve setup systems and procedures and your VAs automatically know what to do, then that’s awesome. That will help your business become more passive. Getting there, however, does take a lot of work.

I’ve witnessed many VAs be let go just because the person who hired him or her couldn’t keep up, or simply didn’t have the time to keep them busy. You don’t want to replace the tasks that your have your VA doing with time spent managing your VAs.

For me, I’d rather focus on exactly what I need to focus on, and nothing else. If I have a project that needs to get done (website design, SEO, iphone apps, etc.), then I’ll hire a VA just for that specific project. Once the job is finished (website design is done, I’ve reached a certain ranking in Google, the iPhone apps are finished), then my time with that particular VA is finished as well, and those are terms that are understood by all parties from the beginning.

Yes, I know I could benefit from hiring a full-time VA do “continuous” jobs for me, like article writing, SEO, and things of that nature, but again I’d have to spend time continuously managing their tasks to make sure they are done correctly and on time, as well as spend time managing the finances of the relationship as well. Maybe I could hire someone to manage the VAs, but then who would manage that person?

Specialty VAs

With a Full-Time VA, you’ll often find yourself teaching the VA what you want him or her to do. It can be time consuming, and the fact is that in this case, you’ll rarely find that the VA will go above and beyond what you taught.

When hiring on a per project basis, I know (based on the qualifications, feedback, recommendations and portfolio of the person I hired) that my VA is nearly perfect for the job, and someone who already knows what to do. I’ll obviously have to give that person a scope of work, but I’ve never found myself having to teach someone I hired how to do the thing I hired them to do. That just wouldn’t make sense!

Furthermore, for almost every project I’ve outsourced, the specialty VA I hired has gone above and beyond the scope of work. For example, my website designers for The Smart Passive Income Blog (the incredible team at BlazerSix) did much more than I had originally asked for, especially when it came to the backend of the blog and making my life as the admin for this site much easier for me to handle.

Hiring a VA for a project doesn’t mean you cannot hire them again. If you love what they did for you, there’s no reason why you shouldn’t go back for them, or at least ask if they are available. In many cases, these one-time hires will become your “on-call” business helpers, because they live from project to project and would love to establish a long-lasting business relationship with you.

Before I finish up, I just wanted to remind you that there is no right or wrong way here. Again, this is just how I decided to work with VAs. How you plan to work with VAs is totally up to you.

How do you work with VAs? Have you had good experiences with who you’ve hired?

Thanks for your support. Cheers!

p.s. If you’d like to get automatic updates of new material here on The Smart Passive Income Blog, you can simply subscribe to the RSS feed!

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The Details Behind Starting an LLC For Your Small Business – Part 2

Pat — Fri, 19 Feb 2010 08:46:30 +0000

This is the second part to my two post series about starting an LLC. In part 1, I talked about the pros and cons of starting your own business. Part 2 will walk you through exactly what you need to know before you apply.

Here’s that disclaimer again: I am not a lawyer, CPA or any kind of professional. I simply share my own experiences about how I did things, and the actions you take based on what I say is not my responsibility. As always, you should seek advice from a trusted professional before making these types of decisions. Thanks!

Let’s get right into it.

Before you apply for any kind of business structure, whether it’s an LLC or a Corporation, you’re going to need a physical business address.

You should not use your home address.

Why?

Because you want to keep your business and personal activities as separate as possible. There could be consequences involved by mixing the two together. This is exactly the reason why you should also create a business banking account after you receive your paperwork from the state.

So what can you do?

You basically have two options:

Lease a physical office with an address.
Get a mailbox at a local UPS Store (or equivalent).

#1 is not really an option for most of us who are just working from home on the internet. The best thing you can do to get your business address is to rent a mailbox from a local UPS Store, or any other type of place that has mailboxes, except the Post Office.

When submitting your application for your business, you’re not allowed to use a P.O. Box number. However, when you rent from a UPS Store, you can simply turn your mailbox number into a “Suite” number, and the address will totally fly. In fact, that’s what was recommended to me by the person working at the UPS Store.

So, if I ended up getting mailbox #111 from a UPS Store on 222 Main Street, my physical business address might look like this:

222 Main Street, Suite 111

Alternatively, you could use #111, Unit 111, STE 111 – it’s up to you. I like to use Suite because it sounds pretty awesome.

Renting out the smallest mailbox for 6 months will cost you about $147.00. You could get a better deal (per month) if you go with a longer contract.

Also, make sure to bring two forms of identification, which is required to get a mailbox – at least from the UPS Store.

What You Need to Know for Your LLC

In this section, I’ll take you through the kinds of questions you’re going to have to answer as you sign up for your LLC, specifically through LegalZoom, however you’ll need to know these things anyways if you decide to file on your own or hire a lawyer to do it for you.

The Name of Your Company

First, you’ll have to come up with a name for your company. The name is totally up to you, however there are a few restrictions that I’ll quickly note for you here:

The name of our company must end with “limited liability company”, “LLC” or “L.L.C”. (Mine is Flynndustries, LLC).
It must not contain the words “bank,” “trust,” “trustee,”"incorporated,” “inc.,” corporation,” or “corp.,” or “insurer” or “insurance company” or any other words suggesting that it is in the business of issuing policies of insurance and assuming insurance risks.
It cannot be the same (or almost the same) as any other reserved or registered LLC.

That last one is a biggy. In order to see if the name of your company (or one similar to it) has already been used, you’ll have to check with your Secretary of State records. To do this, simply type in the following into a Google Search field:

“name of state” secretary of state business name search

Example:

Conveniently, if you file through LegalZoom, they will do this check for you. You can enter 2 alternate business names just in case your first choice has already been taken or looks similar to an existing business name.

The Federal Tax Identification Number

The Federal Tax ID Number, also known as an EIN (Employer Identification Number), is basically the equivalent of a social security number for your business. You’ll be asked by Legalzoom whether or not you would like them to help your LLC apply for an EIN.

You absolutely need the EIN in order to create your business, obtain your business banking account, and get paid. You have the option of having Legalzoom apply for one for you (for a fee), or simply have them prepare the IRS forms for you (for a smaller fee), so you can send them off yourself.

Update: You can also apply for your EIN online through the IRS website. It’s relatively simple and you get your EIN almost immediately.

Thanks to Jay Thrash, a commenter below for this helpful tip.

Who Will Be Your Registered Agent?

Most states require that any business entity must designate and maintain a “Registered Agent“.

A registered agent is the person designated to accept official documentation if the LLC is “served” with a lawsuit.

The agent must either be:

an adult living in the same state that you formed your business in (although again P.O. boxes are not acceptable); or
a company registered with the Secretary of State in the same state that you formed your business in.

If you form your LLC in your home state, any one of it’s members could become the registered agent for the company. That being said, there are some advantages to having another person or company act as your registered agent:

First, it adds an extra layer of privacy, (since the registered agent’s name and contact information are publicly available), and;
Secondly, this ensures if your LLC is named in a lawsuit, no one will surprise you at home on a Sunday night with court papers, which would totally suck.

I understand that much of this is probably new to you and it’s a lot to think about, but that’s why I’m here. There’s more, so lets keep going!

How Will Your LLC Be Run?

Before we move any further, understand this terminology related to LLCs: A “member” is the same as an owner of the LLC. There may be more than one.

If the LLC is managed by it’s members, then it’s owners are responsible for running the company.

If the LLC has a specific manager, then the appointed manager (who doesn’t necessarily have to be a member), is responsible for running the company, not the members.

For those of you who are going at it alone, you’ll simple have one member (you), and the company will be managed by it’s single member (you again).

If you’re confused by any of this, don’t worry. Again, LegalZoom does a great job of explaining everything (which is how I learned all of this by going through it several times myself!), and personally it justified the slightly higher fees than simply filing for the LLC on your own.

Capital Contribution and Percentage of Ownership

If you’re a single member LLC, this part is easy. You simply enter how much you’re going to initially contribute to the company, as well as the percentage of ownership, which is 100%.

If you have other members, then this becomes a little more difficult. Hopefully, you and your partner(s) have spent time talking about percentages of ownership and how much each of you are contributing to the company.

This will have an impact on how you share your profits, so if you haven’t already done so, be sure to work things out (civilly) with your business partners before you get to this point.

How Do You Want Your LLC to Be Taxed

You have two options here.

You can be taxed as a pass-through entity such as a partnership or sole proprietorship, or, you can be taxed as a corporation.

If you choose to be taxed as a partnership (for multi member LLCs) or sole proprietorship (for single member LLCs), then the LLC itself does not pay taxes and does not have a tax return. The LLC owner(s) report business losses or profits on their personal tax returns.

If you elect to be taxed as a corporation, then you may go through what’s called “double taxation”, meaning the profits of your corporate first get taxed at the corporate level, and then again on your personal tax returns.

There is some additional paperwork needed to fill out (provided by Legalzoom), if you do choose to be taxed as a corporation.

How Long Will You Have to Wait Before You Actually Become a Business Entity?

After you answer a few other questions and submit your application to LegalZoom, who will then process the information you provide to the State, you’re looking at an average of 20-35 days before you get any type of paperwork back from the state, which includes your EIN, your Articles of Organization and Operating Agreement, which are all required by most banks in order to get a business bank account.

When I helped my friend start his own business the other day, LegalZoom said that the Secretary of the State (this is in California), was actually back logged with new business applications, so there would be a bit of a delay. I don’t know if that’s a good thing (because new businesses are starting up), or a bad thing (because there just isn’t enough personnel or effort into helping Californians start their own business), but either way, it’s going to take awhile before we hear back. Wait time will obviously vary between States, but it won’t happen overnight.

How Much Will it Cost You?

Well, the answer depends on which options you choose on LegalZoom.

LegalZoom has three different packages: the Economy Package, the Standard Package, and the Express Gold. You can view exactly what is included with each package here, but all you really need to officially start your business is the cheapest package, the Economy Package, which costs $149.00 + any state fees.

When I started my first company, I was really excited so I decided to go all out and purchase the Express Gold package. It was pretty cool because I got a nice looking folder with my company name embossed on it, a seal stamp (like the one shown on the picture at the top of this post), and a CD-rom with a bunch of business and legal forms, but honestly none of that stuff is required, and I’ve never used most of that stuff.

With the Economy package, the Federal Tax ID number, the Registered Agent service, and fees for the state of California, the total comes to just over $500.00.

No, that’s not cheap. And yes, you could probably get it done for less money by doing it on your own. However, I feel that the price is fair because of the education I received while I was filling out the application, as well as the excellent customer service and help that LegalZoom provides for us new business owners.

That’s just me though, and exactly how you proceed is totally up to you. I’m just simply sharing my own experiences hoping that you’ll learn from them in one way or another. As always, you should seek professional advice before making any business decisions regarding the formation of your company.

I hope this 2 post series about forming an LLC has helped some of you as you begin to take what you do online to a whole new level in 2010.

Lastly, to all of you non-U.S. readers, I know these last two posts do not really apply to you, but hopefully you can get a glimpse as to how these kinds of things work in the U.S. If any of you have any similar posts or resources for starting businesses in other countries, please feel free to share, as I’m sure other people are as curious as me.

Thanks everyone, and I’m wishing you all the best. Have a great weekend!

Cheers!

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The Details Behind Starting an LLC For Your Small Business – Part 2
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