Dave and Jay - Crazy Web Entrepreneurs

Come on, admit it, secretly we all dream of living off our online income. However, what many of us forget to keep in mind while daydreaming is that unlike traditional forms of brick and mortar industries, unless you are extremely well established, it is very easy to wake up one morning and find your income all but wiped out.

We are just now recovering from an occurrence of this ourselves, and so I did some serious soul searching over the weekend and decided to make a list of the best practices for anyone looking to turn being a webmaster into a full time job.

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1. Diversify!!

We have many websites, however almost 90% of them are focused on the same genre. When our Adsense income dropped, we went from living high on the hog to having to actually having to watch what we spend.

The moral of this story is: don’t just focus on 1 site or 1 genre, that’s fine when you’re doing things for a side income, but when you have to depend on that income to pay for food and a roof over your head, then you need to diversify. That doesn’t mean you have to build hundreds of sites, but try to put your eggs in 2 or 3 baskets instead of 1. If you simply MUST have 1 website, then you need to diversify your income streams to limit your exposure to seasonal and unforeseeable changes!

What are we doing?

Well, as recently announced, we are attempting to establish our income with more recurring revenue subscriptions like Easy By Design; this is our attempt to capitalize on the many small businesses in North America which may not want to spend $2,000 on a website, but still want a unique looking design. This will effectively diversify our assets into 4 sectors: Content Sites (ie. celebrity fan pages).. Local Sites (ie. classified ad networks).. E-Commerce (our Multiplayer hacks subscription site) and Web hosting/design.

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2. Lower your cost of living!!

No matter how hard you try to diversify your income, sometimes you just can’t squeeze as much cash flow out of some ideas… so it’s quite likely that you will end up depending more on 1 or 2 sources than others. As many of us long-time web site owners can attest, just because you have a $8 Cpm doesn’t mean you’re always going to have an $8 Cpm…

Now for the most part you can’t control your revenue, however you can control your cost of living. What this means is, instead of buying or renting in an upscale trendy area, look to the more lower cost rural areas and small towns.

For example, I used to live in Oakville, Ontario, which is one of the most expensive places in Canada to live - a decent house will run you around $380,000, with a nice place running $450,000+. It was a great city to live in, but can you imagine trying to make the payments on a place like that when your #3 ranking on Google disappears, and your income falls by 50%… and for who knows how long?

Instead, when I look 50 miles away, I find a town like Brantford where a gorgeous detached home can be bought for $250,000, and a fixer upper for $150,000 - even the rents are cheaper.
But this doesn’t mean housing is your only area to cut costs; when the money starts coming in it’s very tempting to spend it. After all, when the money comes so easily compared to working outside doing hard physical labor, it can be real tempting to buy that new big screen tv or video card. While you should treat yourself to stay motivated, you should also be sure to put away a percentage of your earnings for a rainy day.

Most financial planners recommend having at least 3 months of expenses saved away as part of an emergency fund; for website owners I would recommend increasing this to around 6 months and putting it in a high interest savings account, so it’s still very liquid but you’re not seeing inflation eating away at your emergency fund.

What are we doing?

Honestly, this part of the article draws on a lot of my experiences. When we first started the fan sites, we were easily clearing $100/hour for the amount of work we actually put into them, and it didn’t take long before I had the new liquid cooled top of the line computer and the 42″ 1080p tv as a monitor, with the Italian leather living room set. Essentially, I spent most of what I earned… after all, it just came so easy.

Dave was smart enough to squirrel most of his money away, and after going through the past few months, I’ve adapted my spending habits to save more rather then spend spend spend…

3. Don’t Quit Your Day Job.

Perhaps this goes without saying, but just a few short months ago I was already on the way to phasing out of my full time job in search of online wealth. Thankfully the bad times hit the month before that was scheduled to begin, or I would have been in real trouble!

The lesson this taught me is to plan things out more carefully before quitting; if you’ve just started your business and are rapidly earning money, don’t give up the day job just yet. As mentioned above, save up some capital, preferably at least 6 months worth of expenses, and that way if something goes wrong you have some time to fix things before having to run out and get a job.

Some people like Tyler Cruz work on the concept of putting yourself in a ‘do or die’ scenario where you either do the work and pull yourself up or fail. That may well work for some people, but if you have a family and/or a mortgage sometimes it can be overly stressful.

Based on our experiences, I would recommend you don’t start planning to quit your day job until you’re able to put a plan in place that follows the above 2 principals… put money away and don’t quit until you can honestly say “if I could just put more time into this I would make this business grow”, but don’t do it if you don’t have a strong determination. There are a lot of people out in the world who think they are special, but honestly can’t handle the stress of working for yourself. Personally I’m not even 100% sure I fit into that category, however experience has proven that when the going gets tough, and push really comes to shove, I start looking for ways to fix the problem even if I do a lot of complaining along the way.