Anybody who says, “A blog is not a business” most certainly does not have a very lucrative blog. I firmly believe that having a blog is one of the greatest businesses in the world for a variety of reasons.
But before I get into why a blog is a terrific business, I want to first highlight what people think about when people refer to businesses. Here are some examples:
* A clothing store. Super low margin business due to rent, manpower, and cost of good sold.
* A barber shop. An unscalable business that is also low margin due to rent and manpower.
* An auto body shop. For the amount they charge to fix a dent, this should be a massively profitable business. But due to PP&E, rent, and labor costs, the business isn’t as lucrative as you might think. There are also health hazards to deal with due to the paint.
* A roofing company. A very low margin business that’s dangerous and labor intensive. Not scaleable and not sustainable on your own.
* A software business. A fantastic, high margin business that can produce recurring revenue through new releases.
* A drop shipping business online. A nice business that doesn’t hold inventory.
THE BLOGGING BUSINESS
The blogging business is an internet-related business with high margins, low overhead, flexibility, tremendous passive income potential, and synergistic with many other money making businesses. A lot of people don’t view blogging as a business because they can’t see what exactly is the product they are buying. “How can blogging be a business if I’m not paying for anything?” is a common way of thinking.
Earning money by not having to sell anything to anybody could be the best way to make money ever! There’s no salesmanship or hard push that can sometimes make people feel slimy and low. There’s no money back guarantee or product updates. There’s no transaction friction either with dissatisfied customers. The only product you have to sell is free, and it’s your content.
Let’s take a look at the costs.
Costs:
Annual URL domain rental: $20 a year
Dedicated server cost: $120 a month
Maintenance: $50 a month
E-mail subscription service: $20 a month
Podcast audio cleaning: $20 a month
Miscellaneous: $200 a month
Total Costs: $430 a month. Obviously, costs will vary per person. You might go on business trips to Europe or have to entertain clients all throughout the world. Who knows. Let’s say the costs range from $500 – $5,000 a month, depending on your business lifestyle. $5,000 a month in blogging costs should be able to cover 90% of all blogs out there.
Flexibility: You can run your blog from anywhere in the world there’s internet access. This is so much better than having to be stuck welding doors at an auto body shop all day long.
Passive Income Potential: Once you build your portfolio of “commercial posts,” you can keep generating revenue for years once published. The more commercial posts you publish, the more revenue you will make. “How To Reduce 401k Fees” was written in 2012, but consistently generates hundreds of dollars a month in income. Nothing is passive about selling shoes, fixing roofs, cutting hair, or running a restaurant. You’ve got to be on your feet all day long and it’s tiring as hell! With blogging, all you’ve got to do is build enough dexterity in your fingers to write for several hours a day.
Synergies: Not only can you make tremendous revenue from your blog, but your blog can help introduce you to many new business opportunities. Your blog can help generate sales for a book you’ve written, provide paid speaking opportunities at conferences, earn you freelance writing income, or land you a gig as a consultant. You never know who will discover your writing and what opportunities might arise in the future.
THE BLOGGING SKILL SET
Being a blogger and being a freelance writer require similar, but also very different skill sets. As a freelance writer, you are a hired gun. As a blogger, you run the show. You can definitely make a good amount of money freelancing, but the chances of burnout is much higher than if you generated most of your revenue from your blog. I would say making $100,000 a year as a freelancer is the cap for 95% of people out there before burnout sets in. Whereas with blogging, the sky is the limit and much more sustainable too.
A blogger is one who creates a brand, markets their brand, and writes original content that generates ongoing passive income. A freelance writer gets paid by the project or the word, and that’s usually it, unless a revenue share agreement can be negotiated. Don’t confuse being a freelancer with being a blogger.
The great thing about blogging is that nobody has any idea how much you make unless you’re telling everyone. To this day, most everybody I talk to outside of the blogging world believes that making a livable income stream off a blog is impossible. Yet, we all know plenty of people making five to six figures a month from their blogs.
When figuring out what the best business model is to run, just look at the “Return On EFFORT.” Is the business scaleable? Blogging is great because the demand curve is the whole wide english speaking online world. Every product/article you produce can conceivably be consumed by over a billion people.
In contrast, you can only cut one head of hair 15-30 minutes at a time before you develop carpel tunnel syndrome and change careers completely. Sure, you can graduate to owning your own barber shop and pay your barbers a set wage. But once again, your business isn’t very scaleable.
CONCLUSION
It’s going to take lots of time to change the perception of blogging. But with companies like BuzzFeed getting valued at $1 billion, and more and more people quitting their jobs to work on their blogs full-time, eventually blogging will be viewed absolutely as a business. In the mean time, if you own a blog and are making a healthy amount of income, you might as well play into people’s beliefs by being Stealth Wealth. It’s more fun this way.
Would you rather own a barber shop that pulls in $150,000 a year in revenue with $2,000 a month rent to pay and $4,000 a month to pay in salary? Or would you rather own a blog that generates $150,000 a year in revenue with $2,000 a month in expenses, much of which include travel and meals? The choice is obvious.
The internet has changed the way we do business forever. Time to make the most of it!
STARTING A MONEY MAKING BLOG
I never thought I’d be able to quit my job in 2012 just three years after starting Financial Samurai. But by starting one financial crisis day in 2009, Financial Samurai actually makes more than my entire passive income total that took 15 years to build. If you enjoy writing, creating, connecting with people online, and enjoying more freedom, learn how you can set up a WordPress blog in 15 minutes like this one.
Leverage the 3+ billion internet users and build your brand online. There are professional bloggers now who make way more than bankers, doctors, lawyers, and entrepreneurs while having much more fun, much more freedom, and doing less work. Get started. You never know where the journey will take you!
Updated for 2017 and beyond.
It can definitely be a business. Some write for the enjoyment or as an outlet and others treat it like a business. Some can even do both!
Definitely hustlin hard and learning the ropes to make it into something that generates a nice stream of consistent passive income. Always appreciate your take from your experiences as there is so much to learn and learning from experienced bloggers who have run the gauntlet before is so invaluable – thanks Sam!
Nice comparisons to the traditional brick and mortar type businesses. I think its important to point out that your blog is only a great small business if you strategically treat it like one. Anyone that just blogs for the sake of blogging and is expecting thousands of dollars to fall in their lap is going to be waiting a long time.
I’ve thought many times about what my next income venture should be: Freelancing, owning rental properties, selling products, etc. No matter what I come up with I keep coming back to creating more websites as stand-alone businesses. When you think about the risks and start-up costs relative to the potential for income, nothing else compares.
My main business is web design, but I also ran few blogs in the past years and, while they didn’t earn me huge money (compared to the ‘main’ business), there’s still a lot of potential to grow and I did earn income. So right now I’m taking it more seriously and try to focus my efforts to grow this side income some more.
I believe that a blog is a great small business.It is also very flexible business: it can be ‘da business’ or it can be ‘the shopping window’. Still, I have a very long way to go to make my sites into ‘solid’ small businesses.