Another Real Example of Outsourcing a Business Plan

Today I thought I’d describe another example where outsourcing + having a plan = money. The inspiration for this blog post came from this thread over on the Warrior Forum.

The original post, by “The RedFox” describes how he build a $5,000 per month business by creating about 200 websites and generating revenue via Google Adsense. In case you aren’t sure what this means, he is setting up wordpress sites, posting about 5 content-rich articles, and then placing Google text ads on the site.

The Process:

  1. Search for keywords that have a CPC (cost per click) of at least $1. Below this it is hard to make enough revenue to justify the investment in a site.
  2. Filter the keywords so that you are left with phrases that get at least 1000 searches per month (exact match)
  3. Determine if the keyword presents an opportunity for a top 10 ranking. Figuring this out will seem complicated if you are a novice, but within a couple weeks you’ll have a very good feel for what is rankable and what is not.
  4. Purchase a domain where the exact keyword is in the domain if possible.
  5. Setup WordPress on the site. Do all of the usual SEO setup for the site (takes very little time)
  6. Publish 5 articles to the site. Each article goes after the main keyword. I assume these are published as “posts” and not “pages”. At least that is what I would do.
  7. Monetize with a large rectangle add directly below the title of each post. Also put a 160×600 skyscraper in the sidebar and a link unit near the navigation bar at the top of the page.
  8. Build a few links using article marketing and/or Web 2.0 sites. Personally I would use Unique Article Wizard for this.

The Economics:


Spending:
He spends $10 on the domain, and about another $50 for all of the articles that go on the site. He generally outsources this but sometimes writes them himself. Doing the work yourself is a good idea for the first site, just so you understand what is involved. But once you understand the tasks, it is much more sensible to hire someone else to do it for you.

Income: His budget is about $60 per site and he considers it a success if the site does $15/month in revenue. Seems like small potatoes, right? Yes it does, but remember he has built about 200 of these sites now. So his average income per site must be about $25/month. If you think about it, this translates into perhaps 1 click per day from each site. This is reasonable if there are 1000 searches per month (30 per day), and you are on the first page of Google. Maybe each site gets 5-7 visitors per day and one single click. That’s a rough guess.

Return on investment:
His payback period (time to get is $60 back) is no more than 4 months. At that level, his return on investment is 200% per year. There are not too many stocks or other investments that can give you such as strong return.

How I Would Improve the Process

What RedFox has done is prove the model works, so now it’s about scaling it up. As I said before, if this were a new strategy for me I’d do everything myself for the first site. If I completely sucked at writing I would outsource only the articles but I would do the keyword research and site building myself. This equips you to teach it to someone else later.

Then I would ramp it up so that I had ONE employee working on this for me full time. I would expect him to be able to finish one site every 2 days including 5 original articles on the site and two articles used for promotion via Unique Article Wizard.’

Total cost $450 for 10 sites. After one month I should have about 10 of these sites built (average 21 working days per month). My total outlay would be about $100 for domains ($10 per domain x 10 sites) and another $350 for the employee salary (typical for a decent writer).

Income expectation of $150/month.
Let’s say we achieve only $15/month on average for all sites. Some are flops that earn nothing, and some earn $30+ per month. So $15 is a nice average. RedFox is clearly averaging $25 based on his comments. I’m being more conservative.

Scale it up with more writers.
I would add a 2nd employee for the 2nd month such that we’d now be launching a total of 20 sites in the 2nd month. The costs for month 2 would rise to $900 and be offset by $150 of income from the sites that were built in month 1.

After two months we should have 30 sites in total. We should be doing $450 in monthly revenue which more than pays for the first employee. At this stage, you’d still be cashflow negative because you invested $450 for the first 10 sites, and $900 for the next 20 sites ($1350 total) but only generated cash of $450 in those two months. So you have a working capital decision to make.

Do you flatten out and only build 20 sites per month? If you do, after the fourth month you’ll have 70 sites active and earn about $1050 per month, clearly putting you in cash flow positive territory. Every month that goes by creates more passive income.

Or do you double up again? Start building 40 sites per month at a cost of $1800 per month. If you do, you’ll have 430 sites (first 30 sites + 40 x 10 months) after the first year is up. You’ll have spent about $19,350 in site building costs and you should now have monthly income of $6450.

Does the upfront investment scare you? Fine. Stick with building the first few sites yourself and then hire ONE person to grow your business. You’ll still build 120 sites in the first year and you’ll be well on your way.

Tools to Consider

First, you need to think about hiring employees, and I recommend using OnlineJobs.ph

Second, you need to be able to build WordPress sites quickly, such that they are Adsense ready. The FlexSqueeze theme is absolutely ideal for this.

Third, you need an article marketing strategy to promote your sites (building backlinks). I recommend Unique Article Wizard for this. It’s what I use.

How Long Should it Take My Writer to Write Articles?

Every so often I see forum threads talking about this topic. How long should my article writer take to write a 500 word article? How many articles a day should I expect from my writer? How long should article rewrites take?

Here is my answer:

If you really want to understand how long a task should take, do it yourself. When it comes to article writing, you should spend a bit of time doing it yourself so you understand, and appreciate what is involved. Only then should you feel you are qualified to “judge” the work you get from your outsourced workers.

I recommend using Unique Article Wizard for article submission. I put my money where my mouth is. I have writers that are paid to create article to go into this system. So how do I know if I’m getting my money’s worth? Simple – I have done article myself and I know what to expect.

Here is an example from today: I actually thought of doing this blog post because I had just finished writing one article along with 2 re-writes of the same article. I wanted to know how long the whole process took me to complete.

Stats: My article was written on a topic I know very well, and required zero research. Add any research time to your expectations. My original article was 320 words. The two rewrites were 437 and 388 words each.

In case you are wondering, Unique Article Wizard uses 3 versions of an article in order to give you the human-written “uniqueness” when they are submitted to hundreds of directories and blogs.

Time taken: The original article took me 20 minutes to write. That does not include any proof reading or editing. I’m a very fast typist, I knew the topic well and it just “flowed” rather easily. I expect someone I hire should probably spend 45 minutes on this.

My rewrites each took me 10 minutes. I timed them with a stopwatch.

What’s left: As I write this blog post I have 3 finished articles. I’ll now need to go into the Unique Article Wizard portal and paste them, pick categories, add keywords, and spell check the articles. I’ll also need to create the resource boxes that I want to use (to get my backlinks). I expect that process will take me about 15 minutes.

Adding it all up: If you add up the entire workflow I described above, you get 55 minutes. Let’s call it an hour. That is the time it took ME. I would expect someone not as skilled at typing / composing articles would spend at least 50% more time on this, so let’s call it 1.5 hours per full article set.

Now let’s get realistic. What I shared with you above included only the actual working time. Guess what? I was having a cup of coffee, so between re-writes I drank some coffee. That naturally leads itself to a bathroom break. I also took some quick mental breaks between re-writes. Heck, I stopped to change gears by writing this blog post (something your outsourced employee obviously should not be doing during work hours). But my point is that your employee will require mental and physical breaks. Nobody can be expected to sit at a computer and crank out content without stopping.

Take your time and triple it.
If my non-stop-time would be 1 hour then I have to adjust to account for 1) my employee won’t be as fast as I am; 2) we all need breaks. So I would expect my employee can finish an entire article set + submit that article set within 3 hours. If any research is required then again you need to pad this number further.

My conclusion
is that if I’m asking my article writers to work 8 hours per day then I should expect about 3 article sets per day of work. Anything more that this is probably unsustainable, poorly written, and demotivating for your employees.

I use Unique Article Wizard, and clearly I think you should do. Please consider using my link for it if you are going to join. If you do, I’ll send you the same bonus package that I describe here. This will help you hire and train writers.

Onlinejobs.ph Review and Useful Information

There seem to be a LOT of people asking about OnlineJobs.ph and whether it is any good as a place for online marketers to hire employees. I thought I’d take some time to write a quick post with my thoughts.

The Good Parts about OnlineJobs.ph

  • John Jonas owns the site, and he is an Internet marketer, so he will keep improving the site to suit the needs of people just like him. I like that.
  • There are TONS of resumes available on the site. It has become popular, so there are lots of job candidates to choose from.
  • You can post a job and have people find you. I like doing this and in my bonus package I reveal a strategy to get more qualified candidates to contact you.
  • You can bookmark favorite candidates.
  • You can mark your employees as “hired” when you hire them so other people won’t bug them.
  • If your worker marks himself as “not hired” you will get an email notice. Hey, sometimes people working for you full-time will try to get another job. It happens sometimes.

Things you Need to Know

  • Candidates rank THEMSELVES on their chosen skills. Keep this in mind because people tend to over-rate themselves.
  • You should think about the single most important skill you need in a person (besides English), and hire to fit that skill. Teach the rest later.
  • The site costs $47/month unless you are a member of “Replace Myself” (see bonus link above). If you are a “pro” member of Replace Myself then you’ll never have a monthly fee in your life. You get permanent membership. That’s what I did. The pro membership is offered as a one-time offer after you subscribe to John’s monthly package. This means you subscribe to the regular package and then you’ll see the up-sell offer. If you plan to outsource, this is HIGHLY worth the money.
  • You will need to come back to this site again and again. An employee may not work out, or might quit, and you will probably expand your business. You will hire from this site more than one time. That’s for sure.

The Conclusion

Simply put, I love OnlineJobs.ph and have found nearly all of my employees through this site. Some of them have not worked out, but that is not a reflection on the site. It’s a reflection of my novice hiring skills at the time, or my lack of defining what I wanted ahead of time. There are very good people out there to be found, you just have to go out and find them. You can’t expect a job site to solve your problems. It is more like a toolbox. You still need to know how to use the tools to craft something beautiful.

Remember: If you join Replace Myself using my link you can claim a great bonus package. Read all about it here.

The Cost of Not Outsourcing

Today I read a blog post by John Cummings over at his blog. He wrote this post about outsourcing.

Key message: We all know it’s important to have an assistant to help us run our business. And while you may be able to hire one in the US (in his case), you probably can’t afford to go hire 2 or 3 extra assistants to test out new ideas. The cost of testing would be too high. Hence, you need to think of hiring Filipinos as a low cost way to be ABLE to test new ideas. Without outsourcing overseas, you simply won’t be able to try out new things to grow your business at nearly the same rate.

My view:
I completely agree. As in 110 percent. I’m doing exactly this type of experimentation in my own business. I have products of my own that I sell, but I’ve been expanding into affiliate marketing and I’m using my low-cost assistants to create content to test out marketing ideas. Some of them work, and some of them don’t work. The return on investment is enormous for those ideas that do work, and the loss is minimal for those that don’t work.

Remember – you can hire a full time person in the Philippines for about $200-$450 per month depending on the skill set and experience. At the low end, you’ll have to teach them everything. At the high end you should get someone very well versed in the skills you need.

Read my review of Replace Myself for more information on how this works.

Importance of Giving Outsourcers Some Freedom

I am a big time believer in training people not only to do a job, but to be able to think about how to improve upon the job. I also believe in allowing my outsourcers (the guys who are with me full time) to do training during their work day and I’ll pay them for it (and buy material if needed).

Today one of my guys sent me his daily update. He spent the entire day listening to and watching Jeff Johnson’s “unstoppable traffic” videos. He found out about them, opted in to Jeff’s list and told me he thought they would be useful. I said “Ok, go ahead and watch them and summarize them for me”.

He sent me a text file with all of his notes. He told me which ones I should watch. This is really super cool because after I do so (and I will, I love to learn), I’ll ask him to come up with an implementation plan. I’ll let him drive the bus, so to speak. But I’ll know the map he’s following. I’ll suggest course corrections if necessary.

This mentality that I have regarding educating people is not new to me. I’ve had it my entire adult life. But it was also strongly reinforced in the training material I got from John Jonas. His training and thinking strategies are fantastic.

Promoting ClickBank Products: Does Gravity Matter

I decided to write this post in reply to a question that occasionally pops up over at the Warrior Forum.

Basically, the question is whether or not to promote products that have high gravity. There are lots of newbie guides that tell you to focus on high gravity. The reason they suggest this is because high gravity is a proxy for high sales. Low gravity, conversely, is a proxy for low sales. It is not a perfect measure, but is a good rule of thumb.

It’s All in How You Promote

The distinction I want to offer to you in this post is an important one. It’s about HOW you plan to promote the product.

There are many way to promote something, but let’s focus on two that are very different. First, we have the “conduit method”. I’m borrowing that name from Chris Rempel, who named it very appropriately. The second method is what we’ll call the “keyword focus” strategy.

Method 1: Reviews

The conduit method involves writing a review on the product and getting organic traffic from people who are researching the particular product. This website is a perfect example of the approach except that I’ve taken it to the next level by offering a bonus. This entire website is designed to rank for the product name “Replace Myself”, an outsourcing training program by John Jonas. If I do my job properly, then people who search for information about that product will find my site (and specifically, my review page).

If I was going to promote something through a review, and if I were focusing on getting traffic from people tying “Product name review” into Google, then I would want to be sure people were actually searching for information about the product. If it was a ClickBank product with low gravity, I wouldn’t bother because it would tell me that not enough people are searching for information on the product.

On the other hand, if the gravity was HUGE then the competition would be too fierce and I’d never get any organic traffic without a big investment in SEO. So my goal would be to pick products that had a decent gravity, but without too much good competition from people who have written review.

Method 2: Niche Keywords

The second method was the keyword focus method. Again, let’s stick with the “Replace Myself” product that I’m promoting here. If I wanted to promote it on a blog I probably wouldn’t name the domain Replace-Myself-Bonus.com. Instead I’d pick something more general like OutsourcingStrategies or whatever.

Then I would be writing great content to suck in traffic on relevant keywords in that market (but not product-specific keywords). In that case, what would matter to me was the quality of the product and the quality of the sales page (or the quality of the opt-in content given away). In that case, a lower gravity is probably indicative of LESS competition and an easier way to make money. But a massive gravity doesn’t necessarily mean you can’t compete. If the market is huge, like the weight loss market, then there are so many keywords you can focus on that you can always find a way to compete if you are creative.

Links Matter. Here’s What I Do:

Regardless of the promotion method you use, if you want to boost your rankings for particular keywords I recommend Unique Article Wizard. I’ve been using it along with the conduit method mentioned above for a variety of products (ClickBank and non-Clickbank). It is proving to be very profitable.

Here is a great post that I wrote describing the specific strategy that I’ve been using.

ARM: Incredibly Powerful Autoresponder Course

Over the last two months I learned some stuff about using autoresponders that blew me away. It completely changed the way that I think about using email and building relationships. It did so while making TOTAL sense and making me wonder why everyone else isn’t doing this.

Actually, I’m sure I do know the reason others aren’t doing this. It takes a bit of planning and time to do it right. Most people are lazy. If you choose to be different, you’ll make way more money.

If you are reading this then I’ll bet money you are in the Internet Marketing field, somehow looking to profit from your online activity.

If you know anything about marketing online then you know about autoresponders. You’re probably on lots of opt-in lists. Most likely you’re on some of the lists of the so-called “Gurus” in the industry.

I know I am.

BUT …

You may have noticed that most people don’t add a lot of value when they send out email. They might seem to add value at first, but their broadcasts quickly turn into sales pitch after sales pitch. You just hit delete.

Guess what? If your own list is creating this same reaction in your potential customers, you are leaving a LOT of money on the table.

Don’t be just another email-sending douche bag.

Enter Auto Responder Madness

Andre Chaperon is the guy behind a course that I bought back in July. Make no mistake about this – I bought his course and it ROCKED. Because of how strongly I feel about it I am promoting it as an affiliate. The affiliate program is private and only available to customers.

His course isn’t “cheap”. It’s $197 and it is delivered VIA EMAIL, so he’s actually teaching you how to “do” the email thing throughout the whole course.

It’s sold on Clickbank so you know you have a very real 60-day money back guarantee. I can’t imagine anyone would ask for a refund. Andre goes well above the call of duty. He acutally responds to email questions too, which is very cool.

What did I learn? I learned how to deliver an email sequence in the form of a story that builds suspence, releases tension through value-added content, and builds a strong desire by the reader to keep reading your stuff. It builds relationships. It makes people feel very good about what you send them. It does so in a totally ethical way.

I really hate writing sales messages to people who can obviously see right through them so I’m going to stop right here.

If you think that most of the emails you get are a waste of time and you want people to view your emails differently, then you need to check out what Andre is teaching. Period.

Here’s the link:

Visit the AutoResponder Madness Course

P.S. I know this post has nothing to do with outsourcing, but if you were to learn this system and spend YOUR time writing powerful autoresponder content then you could have your outsourcer working on link building, article marketing, squeeze page design, and bonus product creation.

Keeping Good Relationships with Employees

A few months ago I had a part time guy working for me. I think he’s about 18 or 19 years old and he wanted to make some extra money. He had approached me by email, responding to an OLD job posting I had at OnlineJobs.ph (you get access to this site through Replace Myself)

I had already hired for the position on that job posting, but this kid’s writing was decent and I thought to myself, “What the heck – I’ll get him to build me a mini-net for XYZ website”. The Mini Net strategy, and training for your outsourcers, is taught inside Replace Myself. I hired the guy and he did reliable work for about 10-12 hours per week. He built out the entire network and updated it regularly.

After about 3 months I stopped getting updates for about 3-4 days straight. So I simply emailed him to ask what was happening. I was nice. I didn’t send him some a**hole email saying “Hey buddy what’s your problem … why haven’t you done any work”. That kind of email to your employees will NEVER help you.

He replied to me telling me that he had to go back to school and that he didn’t think he’d be able to keep up the part time job. He said “I’m really sorry about this, and I really liked working for you”.

No big deal. I thanked him, paid him for his time, and moved on.

But I still have a good RELATIONSHIP with him. I emailed him last night to see if he wanted any temporary work. I have a new website project under way and it needs content injection. My other writers are busy on projects and I don’t want to slow them down with a temporary job. So I emailed this kid to see if he wanted to do it. Sure enough, he does. I had a feeling he would.

I’ve often said (on this blog) that hiring part time writers is not a great idea. It’s true – it’s not a good idea if you need them long term. Too often they move on because they were never truly committed to the job. BUT, it’s a great way to get temporary work done. I like having a pool of people that have done work for me in the past that I can email and say “Hey, I have something – you interested?”

This is a big time saver for me when I need to hire for small things.

The Economics of Article Outsourcing

Today I want to talk a bit about outsourcing as it pertains to article writing and the economics of doing this. I see countless posts over at WarriorForum.com, or other places, asking about how to get started outsourcing article marketing.

Obviously, article marketing can be a powerful way to promote your business. You get backlinks from your articles, and you get potential traffic from people who read your articles.

So let’s talk about your options when it comes to outsourcing article writing:

1) You can go to a freelancing site such as Elance or oDesk. Here you can probably hire someone to write articles for you either by the hour, or more likely, on a per-article basis. You generally spoon feed the person the exact keywords and other article requirements. They work for you but they also work for many other employers. They get paid by the article and they crank out whatever they crank out. You might get lucky and find a great person through this method, but it’s not easy. They have no real incentive to learn about YOUR business, and do anything to help you succeed beyond writing articles. They are not truly working for you.

2) You can hire your own writers to work for you full time. This is far more effective, in my own experience, because you are able to set expectations for how much output a person creates in an average week or month, while paying them a salary. This means they aren’t looking to crank out garbage. You can also teach them exactly what you need accomplished. You can show them how to do keyword research so that they know exactly what to write about without you needing to explain it on every single assignment. You can earn each other’s trust and you can give them your login details for article marketing accounts, so that they submit the articles for you. You can get them to track your rankings for keywords. There is FAR more value in having a dedicated employee than hiring a freelancer.

The Economics:

I use Unique Article Wizard, so whenever I have a writer do articles for me, I get 3 versions of the article along with a resource box file that we submit to the UAW service.

Imagine that on a typical day my writer takes plenty of breaks (you go nuts writing all day), and outputs a total of 3 article “sets” each day. That’s actually 9 articles, but only 3 topics because each “set” for UAW has 3 versions like I said above.

There are an average of 22 work days in a month. That’s 66 article sets per month. Say the salary is $400 per month. You can hire people for less, but I’m using numbers that are very achievable for you.

This works out to a cost of $6.06 per article set. Oh, and since my writers also submit to the Unique Article Wizard Service for me, this means that I’m getting a lot more than “just” an article. I’m completely outsourcing article marketing so that my time is free to figure out what the next growth path will be for my business.

Do you need a full time article writer?

If you are not sure, then you probably don’t have ambitious enough goals. With one writer on your staff, full time, you should be able to pick 3 niche markets, setup blogs within each niche market and find products that you can promote using a feature box in your blog (or the “What Would Seth Godin Do” plugin).

Then, you train your writer to follow the news on each niche market. You have your writer write one article per day for each of the blogs, and post to the blog. The writer then creates the 2nd version of each article and submits to EzineArticles.com (and perhaps other directories). Then, the writer creates the 3rd version of each article and submits the entire set (all 3 versions) to Unique Article Wizard.

If you pick niche markets that actually have buyers, and you promote products that actually sell, then you should have no problem making a solid profit with this strategy. And there are many variations of it.

For example you could have your writer do product reviews and write articles to point backlinks at your reviews. Go to some of the affiliate networks where physical products are promoted. CJ, ShareASale, LinkShare, etc. Find products that look like they sell very well (check for real user reviews online).

When you find a great product that you think you can promote, check the top 10 organic listings when you query the product name in Google. Look at the number of search results using phrase match (product name in quotes). Look at the average page rank of the top 10 listings using broad match (no quotes, the way people actually search). If you think you can get ranked for the product name, publish a review. Then start sending articles to the review using Unique Article Wizard. You’ll be surprised how many awesome products there are to sell out there once you move away from Clickbank. Even Amazon has a TON of stuff out there, but you need to focus on expensive products given the 6-6.5% commission cap.

The point is this: Hiring an article writer in the Philippines is very low cost. If you have ANY aspirations for making money online you better learn how to manage a few employees and you better learn how to do article marketing.

The side point is this:
If you are willing to step up to the plate and hire a dedicated employee for a few hundred bucks per month, then using a service such as Unique Article Wizard is a no-brainer. It’s like buying a car for $30k and not paying an extra $5k to be able to drive faster than everyone else.

Where to hire writers

My top recommendation is to use John Jonas’ training over at ReplaceMyself.com (make sure you claim your bonus through me)

Using CampFire for Chats with Your Team

Recently I started using CampFire, a chat-room product, with my team. This product is by the makers of BaseCamp. It’s incredibly useful.

Here’s a link to CampFire. It is not well advertised, but there is a free account available that will let up to 4 people chat at one time.

Here’s how you can use it. When you have more than one employee and you need THEM to resolve a problem together, you can ask them to go to the Campfire chat room to resolve it online via discussion. You don’t even need to be there. Campfire will keep a log of the discussion and you can go in later and take a look at what they said, and see what resolutions they came up with. If you like the resolution, great. If not, email them suggesting some alternatives.

The point is this – you do NOT want to become the middleman for problem resolution in your business. You want THEM to figure it out for themselves.

Here’s a real world example. I have one writer who writes articles and another “jack of all trades” who submits them to article directories, with the exception of Unique Article Wizard. I want my writer to submit to UAW herself.

My writer will submit articles to our system and my other guy will then submit to EzineArticles and other places. When he is done, he needs to let the writer know so that she can go submit to UAW.

Things were falling through the cracks and we needed a system. I simply asked them to go figure it out via CampFire. I was not online with them. But it got solved and I got to see how they interacted with each other.

Remember, Campfire is a free tool if you use the free version limited to 4 chatters and 10 MB of file storage. It’s fine for me so far. Very fine.

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