How to make extra money, both online and offline, this is a question that I get asked a lot. Almost everybody is interested in earning residual income and the internet is a tool that many people are looking to utilize. Unfortunately, the topic on how to make extra money is also tainted with get-rich-schemes, Ponzi’s and highly unreliable information in general.
In this post, I am going to compare two popular online business models and give you actionable advice on how to start them today! These business models do not require substantial investments, rare resources or an extensive network. As Tropical U.P is focusing on online businesses, this post will talk about online ways to make extra money only.
A quick note
I mentioned this before, but I do not believe in get-rich schemes or deceiving information. On Tropical U.P, I always aim to provide with an honest account of my own research, experiences and discussions with people around me. Nothing in life is free and everything takes work and dedication to make it a success. That being said, starting a business has never been easier.
Personally I firmly believe in business models that are built around passion and doing something that you care about. Sure we all need to eat, but money should not be the main motivation for doing something if that is the case you will not last long. The trick is to balance your passion, value to other people and generating income at the same time, this is not an easy thing to do and it takes trial and error. But once you hit the sweet spot it can be meaningful and rewarding at the same time.
So that is that, let’s not dwell on any longer and dive right in!
1. Start an Authority Blog
Starting an authority blog means you blog about a certain topic in which people are interested and where you provide value by sharing your insights. Blogging is an immensely popular tool to earn money on the internet and many blogs talk about this topic itself.
Tropical U.P is also partially about blogging and creating an online business, although not solely focusing on only blogging but also touching some of the technical side and other channels to start an online business.
Why Blogging is Interesting
Blogging in particular, is very interesting because it requires practically no investment and all you need to start is access to a computer and an internet connection. A blog is relatively easy to set up and can be a tool to online world domination.
If you do it right and opt for a self-hosted blog with a premium theme that is SEO optimized and offers a solid framework, the initial investment is not much more than 100 USD. You can pretty much set up your entire blog in less than two hours and after that you are good to go.
How To Earn Extra Money With a Blog
Now before I go into detailed specifics how you should approach blogging, The question that we are all interested in is how can you actually earn any money with a blog. Ways to monetize a blog depend on the kind of audience that you have, the strategy of your blog
A review blog that drives that drives large numbers of mostly one-time visitors should consider different ways to monetize than a blog that is looking inspire a community and build sustainable relationships with its audience.
A few years ago there was a lot of buzz around the topics of niche sites, highly specific websites within a certain sub-category and most likely focused on high-traffic. A good example is Pat Flynn’s Security Guard Training HQ, that still generates over 1,500 USD per month in mostly Google Adsense earnings.
Although nice sites still work, in order to rank in Google there is now a much larger emphasis on authority. It used to be possible to simply make a simple WordPress site, put up a few pages that target very specific keywords and earn money over time. Now it is better to focus on building some sort of authority within the niche you are operating in, even better to couple this with a product or service that people might be interested in, this opposed to Google Adsense.
If you are looking to earn money with a blog, affiliate marketing is also a strategy that has proven itself over time. You can use your authority in your specific topic or niche to promote certain products or services and in return for your referral earn a small commission on a possible sale. Building authority, however, takes time and if you would give your audience the feeling that you are not being sincere in the products that you promote, it could damage your brand altogether.
How to start blogging
The advantage of blogging is that it is so easy to start. Starting a blog is inexpensive and over time you will be able to grow both your blog and your audience, opening other potential revenue streams.
Refer to the following posts for an exact approach on how to start blogging:
- Starting a Blog Checklist that contains everything that you need to know!
- How to Create a WordPress Site with Genesis in this tutorial I explain you exactly how to build a website like Tropical U.P in two hours!
Advantages of blogging
Starting a blog to make extra money has many advantages, in no particular order, blogging is:
- Very easy to set up – Setting and building a clean and professional website literally could be done in two hours.
- Offers a low initial investment – Setting up a blog can be done for around 50 USD and around 100 USD to have all the professional tools you need.
- Allowing you to build a brand – Blogging allows you to build an online brand around yourself, meaning that in the future you will have endless opportunities to add different projects to your portfolio.
- Developing your skills – As a blogger you need to wear many hats: developer, designer, writer, editor, SEO, and marketing aside from the general aspects of running a small business. These skills are invaluable for future online of offline projects.
- Very rewarding – As your blog and audience grow you are likely to help your audience with something, the feeling of helping other people making important changes in their life feels very rewarding.
- Creating endless possibilities – As you develop and you are building a brand together with your blog, you will be able to create many new opportunities. You could use your newly acquired skills to build an online course, you could expand to podcasting, you could offer technical services, the possibilities are endless.
There is no limit to what you can achieve when you dare to dream big.
– Joep van der Poel
Considerations before starting
Before starting a blog there a couple things that are also important to know, in no particular order:
- There are no shortcuts – After the most recent Google algorithm updates there are definitely no shortcuts to rank faster.
- Blogging is hard work – Blogging is more than finding a nice WordPress theme, write two 300 word posts and lean back as income starts pouring into your PayPal. Once you have the basics you will feel less stressed but once your grow you will have different worries. All of a sudden your audience starts expecting things from you and you need to deliver.
- Competition is fierce – Because blogging is so accessible, competition is likely going to be fierce in almost any topic. Luckily most blogs or websites are half-baked, this presents an opportunity to stand out.
- Growth takes time – Even with great content it will take time before people start noticing your blog and start reading your content. It is not unlikely that at a certain moment you feel like you are shouting in an empty room.
- Making money takes even longer – Growing your audience is one, but growing your visitors to a level that you can monetize is a second. If you are not selling a product or service, it can take some time before you actually start earning money with a blog.
Starting an authority blog – The verdict
Blogging is and will likely remain a great way to make extra money online. Especially in the beginning blogging can be time-consuming and it takes time to get yourself in a routine that works. A blog is certainly no guarantee to make extra money but once you do it right, the opportunities are endless.
Regardless of the kind of online business you are looking to start I would advise to start a blog yourself. A blog can be a personal hub for other online projects that you are involved in and aside from that it will help you to develop skills that can be applied elsewhere.
2. Learn the Art of Micro-Businesses
Micro-businesses are small businesses that you set up online that can generate an extra income. Tim Ferriss talks extensively about micro-businesses (he refers to them as a muse) in his best-selling book the 4 Hour Work Week and gives great examples as to why they are so interesting.
A micro-business focusses on a demand in the market and fills this demand with a product that is offered on a personal website or on a marketplace such as Amazon. What makes a micro-business interesting is that they are relatively easy to set up and can be mostly passive once the system is in place.
The key to making extra money with micro-businesses
As I mentioned above micro-businesses can be very low maintenance, mostly passive and can be centered around a topic that you are highly interested in. Because there is no physical storefront and all the other expenses that a brick and mortar bring, costs and therefore, risks are very low.
The products that you are planning to sell can be easily sourced in Asia and you could start with a small order to mitigate risks even further. If you are planning to sell on your own website, there are great plugins for WordPress to create an online shop and even manage the inventory and payments.
Another very easy method to sell your products is with using Fulfillment by Amazon, which basically means that Amazon stores, sells, and ships your products for a cut once you make a sale. The only consideration here is that, just like with Google, you will have rank before you will see any real results.
Because micro-businesses are low maintenance and relatively easy and cheap to set up, you can even have multiple businesses to supplement your income. I once read an answer on Quora (that I, unfortunately, can’t find anymore) from an entrepreneur that ran as many as 15 small businesses. All his businesses were low maintenance and generating between $500 – $1,000 a month, that is not bad. Because operations of his businesses were somewhat similar he had actually hired a personal assistant who would manage all the operations of his businesses, if needed he could hire freelancers for bigger tasks. He only had to check in once a day and for most of the time his businesses would require his attention. Now that is a good business model.
Micro-business approach and methods
For real case studies and examples, refer to The Four Hour Blog that contains many examples. I will now share a hypothetical approach on how you could start a micro-business.
- Research the market – Identify a topic in which you are interested and have a connection with. This helps you to better understand the potential needs of your future customers, it would be even better if you can solve a personal problem with a new product. The key is to keep things simple and there is no need to reinvent the wheel. If you can identify a small aspect of a product and improve that, you can already have something to go on.
- Select type of product and unique selling point – Now you are going to have to select a product and identify how you can make a small improvement to make it better. Could be a change in design, an added feature or simply a much lower price. Again the key is to keep things simple as you don’t have the resources for R&D.
- Select potential suppliers – Now that you have a general idea what you are looking for, identify potential suppliers. A good start is Alibaba and to identify ‘Gold Suppliers’ to ensure that potential suppliers have a proven track record. Also, make sure to pick a supplier that also accepts smaller minimum order quantities, you don’t want to order too many products at the same time.
- Start the discussion with the supplier – Talk to the supplier and see if they can realize your idea. Talk about all the other details and ask for a prototype once you have confirmation. Try to get a few prototypes at least so you can also test your product with potential customers to get their feedback.
- Test prototype – Get your prototype in front of potential customers and collect their feedback, ask if they are willing to pay X for it. It would be even better if you could already validate your idea by actually selling prototypes to potential customers already.
- Possible iterations – Now if you and/or your potential customers were not fully satisfied with your product, this would be the time to discuss changes with the factory before placing the final order. Don’t try to please everybody that is impossible and don’t get stuck in this phase by trying to get the ‘perfect product’.
- Work out the details – Work out all the details, final purchasing price, transportation, possible import tax, handling fees and do a final check if based on all these numbers you can realize a profit margin of around 40% while still staying competitive.
- Place first order – Purchase your first order from the factory and keep the quantity low.
- Create marketspace – While your product is being produced and shipped, it is important to immediately start to create buzz for your product and create a market space. Now there are two main roads that you can go from here, A) Amazon route, create a merchant account in your respective country or, B) Own webshop route, create a simple but nice website to display your product and give people the chance to make a purchase. I would advise you to either go with WordPress + WooCommerce (free and self-hosted), or Shopify (paid but requires fewer skills).
- Promote, promote and promote – Now before your product arrives you want to start promoting your product as soon as possible. Write a blog about features of your product, create buzz with targeted advertisements, you want to get people excited about your product. You could incentivise potential buyers to sign up for your email list by providing them a discount coupon on their first purchase, do what you have to do.
- Launch your product – Once the product is delivered you can go live and start selling. If the promotion went well you hopefully have people waiting in anticipation to buy your product, make sure to be available in case people have problems during their purchase or to answer and questions you might receive.
- Maintain and future – Now that you have successfully launched your first product you will want to stay in contact with your buyers. Identify possible features that could be included in V2.0 while managing the operations of your store. If done right, all you would have to worry about now is customer service, small maintenance of your website (if you have) and timely place new orders when the inventory is running low. Now you could either continue on the first product you launched or put this micro-business on auto pilot and launch your second product!
The approach that I have provided above is realistic albeit simplified and can be used when you are looking to launch a product. As I have stressed before it is very important to keep the whole procedure as simplistic as possible and it is important to focus on one key aspect and do that better than the competition in the marketplace.
Remember, we are not looking to build a million dollar business, although that would be nice, but we are looking to create an additional stream of income. Let’s say you sell a product that you sell for $20 and with a profit margin of 40%, meaning a profit of $8 per sale. If you want to create $500 additional income per month you would have to sell 62.5 units or roughly 2.1 units per day. That is not impossible if you did your research well.
Micro-Business – The verdict
Micro-businesses are an accessible strategy to make extra money online. Many of us think that launching a product is difficult without a million dollar idea or without a big R&D budget, but this is not true. Try to solve a small problem, one at a time and aim to create a small stream of extra income every month.
The research could take some time before you found the right type of product and the right supplier, but a micro-business could be up and running within six months and start to make extra money for you.
There is no right or wrong business model when looking at authority blogs or micro-businesses. Personally I feel that they can even compliment each other when done right. For those more hands-on a micro-businesses might be more suitable whereas the researchers or the writers would probably feel more comfortable starting a blog.
Currently, I am involved with the setup of several micro-businesses and I am highly enthusiastic of this business model. When the time is right I will share more information about my personal projects but for now I want to encourage to look further and see all the opportunities that the internet has to offer.
A few years ago I was like you. I did notice other people succeed and starting new things, but I always made an excuse for myself as to why I would not be able to do that. Times have changed and they can for you too.
What is your favorite online business model and what works for you, let me know in the comments below! Thanks for reading and staying with me and good luck with your online endeavors. Stay awesome!