These are the possible revenue streams:

 

 

I have created a spreadsheet that includes a business model and revenue projections that compare these revenue streams so that you can see what really drives them.

 

It will help you to decide which revenue streams you want to pursue.

 

But before we discuss the model, we need to make sure we understand these revenue streams.

 

You will offer your services (or the services of an employee or freelancer) in return for money.

 

Check out our guide about how to create services to sell and how to deliver services effectively. 

 

You can create and sell courses online. Now, this can be an extremely important opportunity for some of you.

 

Let’s talk about why you would want to sell a course:

 

The obvious advantage of courses is that you will put some effort into creating the courses once then you can sell an unlimited number of them without any additional time or cost (other than marketing).

 

For example, you might offer services to 20 clients in a 12-month period and charge an average of $10K per client and generate $200K of revenue over 12 months.

 

However, there are a lot of potential customers that might not able to afford your $10K fee.

 

If you created a course that shows these customers how to do everything themselves and sold it for $500 they will save $9,500 and be very happy about it.

 

If you sold 1,000 of these courses you will generate $500K and you will also be very happy about it.

 

In this case, keep in mind that you can also offer your services and an ‘up-sell” to people that buy the course but still need some kind of customized service.

 

Therefore, courses could be your biggest source of revenue and also become your biggest source of leads for your services business.

 

You also have another option. Instead of selling the course for a one-time payment of $500 you can tell your clients that your course will be constantly updated and improved over time and change the business model by selling the course as a membership with an ongoing monthly fee of $50 pm.

 

In this case, if you convinced 1,000 people to subscribe to your membership offer, you will be generating $50K pm for an indefinite period of time.

 

The biggest and most important reason to consider creating and selling courses is that service work is difficult to scale because there’s only so much you can personally do in a day.

 

If you want to scale you have no choice but to hire employees or freelancers to do the client work and this leaves you to play more of a “project manager” / “point of contact” role.

 

The problem here is that managing other people is not easy and a significant proportion of you just don’t want to do it.

 

So, you have the option of creating and selling courses to generate a second revenue stream or you can use it as an alternative business model and focus on it as a priority over offering services.

 

You can generate revenue by recommending products and services from other people and getting paid a commission if the customer buys something.

 

These arrangements are called affiliate programs and the most well-known affiliate program is from Amazon.

 

But you need to make sure that the products and services you are promoting are related to your industry.

 

There are affiliate products for every industry. Just Google “[my industry / niche / product / service] affiliate program”.

 

Ad revenue is something that I only recommend if you have decided to create a high-traffic blog, podcast or YouTube channel.

 

Ads will make your site look cheap and less credible if you’re selling services so they only make sense if you have decided to create a lot of content and generate a lot of traffic with the view to monetizing the traffic with ads.

 

This makes sense for people that just like producing content about their preferred topic and don’t want to deal with any clients, deliver any services or manage any employees or freelancers and prefer to monetize their traffic in the most passive way possible.

 

If you’re considering going down this road, keep in mind that monetizing traffic with ads is almost always the worst way to monetize traffic because it generates the least amount of revenue per visitor.

 

That’s the trade-off that happens if you decide to go with the most passive monetization strategy.

 

If you do want to go down this road, the most popular way to set up ads on your site that will generate revenue is to use Adsense from Google. I have created a separate article/video about Adsense if you’re interested.

 

 

 

[The following refers to content in the video] Let’s look at these projections. I’ve listed these revenue streams in order of most passive to least passive.

 

The first one is advertising. Let’s assume you get 10K visitors to your site and 1% of them click on an ad (industry average) and you get paid 25 cents per ad (industry average) then you will make $25 per month.

 

The obvious conclusion to draw here is that you need a lot of traffic. Even if you 10x the traffic and get 100K visitors pm you still only make $250 per month.

 

Now let’s look at the affiliate projections. You have the same 10K visitors per month and, again, 1% of them click on an ad. In this case, a percentage of these people go to the website of the affiliate product and buy it.

 

If you average out the revenue per click, the industry average is $2 per click so you generate $200 per month.

 

Now let’s look at memberships. Again, 10K people visit your site. Your subscription fee is $50 pm and 1% of the visitors decide to join.

 

You will be acquiring 100 members pm. So, at the end of the first month, you will have 100 members paying $50 each and your revenue is $5K per month.

 

After 12 months you will have 1,200 members and you will have revenue of $60K per month. This obviously assumes that nobody cancels.

 

If you’re going to do this for real, you need to remember to factor in a “churn rate”. That’s the percentage of people that cancel each month.

 

Now let’s look at services. Again, 10,000 people visit the site. Let’s assume your average fees per client per month are $500 which means that you generate an average $6K per year from each client.

 

Now, let’s assume that your conversion rate is not 1 out of every 100 but but 1 out of every 1K. You will be adding 10 new clients pm and, after 12 months, you will be generating $60K per month.

 

The conclusion is obvious – the more passive your monetization strategy, the less revenue you will generate.

 

I could spend all day talking about hundreds of different scenarios and assumptions but the only scenarios and assumptions that matter are those that apply to you.

 

Create your own financial model like this, enter your own assumptions, and figure out the optimal business model based on your specific circumstances and personal preferences.

you will need to do competitor research (and complete a competitive analysis) so that you can develop a unique selling proposition.

 

People need to be clear about why they should buy from you and not your competitor.

 

After attracting your target market to your website you will need to make sure that you have created an effective funnel and addressed all of the website trust required to maximize conversions.