Pat Flynn from Smart Passive Income shot an interesting question to his readers the other week that I would like to answer in this post:
Which I would turn into:
You probably know about my business model already. So you know that my answer is that I would rather make 1K 10 times. I think that the diversification argument has been explained over and over on several blogs and for different topics (just ask your financial advisor if he would let you have a single stock versus 10 stocks in your portfolio 😉 ). But I think that there is much more than the fact that you can count on multiple sources of income and that diversification is a synonym for income stability. So here’s my take on why I would rather make 1K 10 times:
If you have one site, you might be a bit reluctant to adjust your business model. You might think that if your readers don’t like your new direction, you could leave traffic or income on the table. What if the modification you make on your site is not the right one? The trial period will definitely make you lose money.
When I want to try something different, I use it on the site that has the most potential for success. If it works, I can apply the “magic formula” to my other sites and make even more money. If it doesn’t, well only 10% of my income will be affected by this modification.
I love leveraging! But this time, I’m not talking about borrowing to invest, I’m talking about using some of my sites to drive traffic to the others. By creating a network, it makes it easy to launch a new site. Without any outside promotions or SEO, I was able to reach more than 3,000 visits per month on What is a Dividend, only by sending my existing readers from Intelligent Speculator and The Dividend Guy Blog towards this site. You can’t obviously send that many people if your sites are not related. But since I’m building most of my websites around financial topics, people who read about dividends will be interested in these 3 sites for sure!
Have you ever noticed that it is easier to grow by 10% every month when you have a small start-up sites? If you grow from 100 visits to 200 visits, you get 100% growth and you can achieve this within a couple of weeks. When you want to go from 1,000 visits to 2,000, it becomes a bit more difficult. And when you are going from 10,000 to 20,000… I’ll let you guess how much work is involved. This is why I found it easier to create more websites that will grow to the size of The Financial Blogger or The Dividend Guy Blog instead of trying to double the number of visitors for these 2 sites.
I often see that for certain periods of time, some of my websites attain a plateau. For a few months in a row, they can hover around the same number of visitors until something triggers a new jump. For example, TFB sat on the 20,000 visitors per month bar for almost a year before cranking up to 45K-50K (right before the Panda update 😉 ). But while my site was sitting on this plateau, I was working on other sites in order to grow them. This is why I think it’s easier to grow 10 sites making 1K to 2K each rather than have one site making 10K trying to get to 20K per month. Not that it is impossible, after all Pat did more than that! But it’s still an exception. The rest of us mortals need to play on a “safer” ground.
If I had only 1 site, I would be very reluctant to sell it. On the other hand, chances are that it would worth so much that there would not be any market for a quick sale. Who could possibly buy Million Dollar Journey today? The site is probably worth several hundred thousand dollars… (doh! I just wasted all my chances of bidding a low numbers on the site!) this is enough to restrain your market if you want to make a quick buck!
By having smaller sites, I’m able to sell one if I need cash flow as I did when I sold Gather Little By Little 18 months ago. Selling your blog might be one of the best way to put money in your pocket for all your effort. If you only have one site, it will be harder to sell and chances are that it will personally branded to you (like I did with TFB). So technically, TFB doesn’t have a big resale value as I am TFB. On the other hand, it is much easier to sell an investing related website like Intelligent Speculator or The Dividend Guy Blog since it is more related to stock commentary/analysis than an individual’s personality.
This last point is very personal to my perception of things. I’m a passionate individual and I write with a lot of “fire”. But sometimes, I could switch from one topic to another because I just feel like it. This could make it hard for readers to follow. This is why I have built a structure where I can write about investing on a specific blog while keeping how to make more money with less work on this blog. And if I ever burst a bubble and want to discuss other personal finance topics, I always have other sites that will cover these topics for a more suitable audience.
I’m returning the question to you, what’s your take?
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