I didn’t get my traffic back, but I now OWN my company
It took us five long months, but we have gone through our first crisis since the company existed. Since we created our company in 2008, we never looked back and always continued our growth at a very high speed. This was even more impressive since both my partner and I never really worked more than 10 hours a week each on our sites. Still, we were able to go from annual revenues of 18K to a low 6 figure company within 3 years. Since then, we never made under $100,000 of gross income. Not bad for a hobby!
But things went sour in 2012… very sour…
This is exactly the question I asked myself several times. I could have found several lame excuses such as….
#1 My partner had his first kid
#2 I had my third one!
#3 We were busy replacing 1 VA and working on our Dividend book
But the truth is harder than that:
#1 We didn’t work very hard on creating anything different
#2 We became complacent and looked at all the money that was coming in
#3 We knew our business model wasn’t sustainable and closed our eyes and kept hoping it will last
At the beginning of 2012, there was a huge Google PR slap. Several financial blogs saw their Page Ranks dropped to 0 and Google severely penalized private advertisements. We not only saw this part of our business melt away faster than a green army man in the microwave but we also got targeted by some jealous individuals who tried to harm our sites.
We did work on our business model and tried to make modifications but this wasn’t enough. While we were making as much as the previous year, Google came back again to hit some of our sites with their EMD update. This is where the storm truly started. A hot air balloon full of shit hit the Fan!
For several months, we kept our expenses as is and continued to spend money on various projects. We kept our growth minded business mentality combined with an aggressive debt repayment program. Everything was going well until the tax guy knocked on our door. We knew we had to pay taxes this year as we were quite profitable, we just completely forget to budget it! Taxes + accounting fees + Fincon12 all in the same month. There was just not enough money left in the company to pay for everything.
At the beginning of 2012, we simply thought “aahhhh we knew it was coming…”. We thought that by continuing our business as is and keep working, we were going to go back to normal within 6 months. Then came the attack to our sites and reputation and we took it more seriously. This is when we started to build a plan to get out of this predicament.
A good thing about our previous business model is that no site was generating over 30% of our income by itself. We were already diversified in terms of income producing sites. We can say that roughly 6-7 sites generate 80% of our revenues. Therefore, we have several playgrounds to work with.
The problem is that the business model was quite similar as we had developed an important private advertiser network. This is when we started to think about revenue source diversification. We were already working on a book and we also started to monetize our newsletter. In July, we made over $2,000 with a single campaign.
We knew we were pretty good in the dividend investing niche. This is why we started to consolidate our efforts in this sector and multiplied the number of sites. We now have sites covering beginner investors’ needs, stock analysis, Canadian REITs and Canadian dividend stocks.
Most recently, we have decided to leave a few projects on the shelf and concentrate on what we have. It has become harder to do well everywhere so we had to concentrate on a few niches.
I’ve performed so much Adsense optimization that I was penalized by Google! Back in September 2012, we were able to grow our Adsense income to over $4,000 for the first time. Keep in mind that January and February 2012 were showing $2,042 & $2,505. You can appreciate the huge improvement we made in only 7 months! The problem is that Google didn’t see it that way and penalized some of our sites by deranking 70% of the search engine traffic we used to get on some websites. Those websites were obviously our biggest Adense earners. And this is how went down from $4,151 in September to $2,838 the following month. Since then, I’m back to hovering between $2,500 and $3,000 (besides a few peaks due to important mentions).
I shared with you that we are on an aggressive debt repayment plan since the beginning of 2012. We want to clear our corporate debt within the next three years and then be able to truly enjoy the benefits. In order to continue our debt repayment plan the way we planned it, we decided to cut our expenses.
We realized that we were overspending for the sake of growth. Like a bigger company, when times are good and money is flowing in, we started to spend more than we need to. We were creating content in places that don’t drive traffic and don’t generate income for now. This is silly. This is why we started to cut out expenses and save another $600/month. Our cost structure has now dropped below $4,000. We are now at $3,855 excluding debt repayment. The plan is to repay $3,000 per month.
2012 was a crazy ride. We worked harder than ever and didn’t generate any growth. That’s normal because our previous business model that was based on private advertising dropped so much that we had to find other ways to make money. It’s not that simple! Nonetheless, with all our efforts, we only suffered a drop of 5% of our gross income. So we are still showing over $100,000 in gross income and this now come from several different sources.
The other big difference is that we are now generating money from our own products. We have small ebooks generating between $200 and $300 per month along with our “flagship” product; Dividend Growth generating another $250-$300 per month on a steady basis. I think that selling our own products will definitely help us reaching a steady cash flow each month instead of hoping for a big deal.
2013 will be the continuity of 2012. This means that we are still working on evolving our business model. The biggest moves have been completed last year but we have now to tweak our modifications. We are trying different avenues and definitely affiliate products and our own services will be great addition.
I think we wasted too much time and energy focusing on Adsense last year. Adsense is great as it’s highly passive but the problem is that you have no control over it. Plus, Google has this weird habit of penalizing people for nothing. So we will keep Adsense in our revenue streams but we won’t focus on it anymore. I think that a good base of $3,000 per month is sufficient to help us grow with our other sources of income.
Our membership program will probably be the biggest challenge we will face. But after the success we had with our latest book, I think we are up for the challenge!
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