How much do you think A List Bloggers make per hour?

Kristi, one of the most successful bloggers, looked at the hidden costs of running a blog, especially for those who want to make the leap into full-time professional blogging.

I think what surprised many people if you read the comments was the expenses that need to be incurred before profits are made. Real profits. Not $50 a month from Adsense but enough to pay the mortgage. Y’know, like it was a real job….

Let’s break this down and see if making a living as as a ‘problogger’ is do-able.

Should You Blog for Money?

Search Google for make money online, problogger, Shoemoney, and you’ll get million of hits.

  • No Barrier to Entry – One of the attractions of blogging is the low barrier to entry. Blogging is the ultimate expression of meritocracy. Anyone can join in and try.
  • No Entry Criteria – Unlike other professions, such as journalism, you don’t need a degree or any type of paperwork.
  • Investment - unlike other types of business, you don’t need to buy a stall, shop, car or even a mobile phone. All you need is web access. The tools are mostly free to get started and you can upgrade as you go along.

So, why not give it a try?

Hidden Cost of Running a Blog

Here’s where things get interesting. Many websites show monthly reports of their earnings. Nothing wrong with that.

Are the figures real?

I don’t know.

I’m pretty sure some are making good money online, others are a little more creative with the truth.

What’s important to note are the hidden costs of running these blogs. If you think about it, there has to be costs, right?

Every business spends money on training, advertising, promotions, hiring, salary, insurance and pays taxes.

Running a web business is no different.

You have sales on one side of the page and expenses on the others. What’s left is the profit.

Business Blog Expenses

Some of the expenses of running a blog full-time include:

  • Web hosting
  • Google Adwords
  • Email software for newsletters
  • Box shot software for digital products and info products
  • Training, such as Yaro’s Mastermind Group
  • Forums, such as Third Tribe
  • WordPress themes Thesis
  • Web storage fees
  • Web access fees
  • Hardware
  • Advanced Email Software
  • Equipment
  • Outsourcing fees
  • Salary

How to Make Money Blogging

This leads into the question of how you can actually make money. In general, sales are generated from:

  • Product Reviews
  • Ebooks
  • Courseware
  • Digital Downloads
  • Template Design
  • Consultancy
  • Software
  • Affiliate Products
  • Amazon
  • Google AdSense
  • Text Ads

Blogger’s Catch 22

The catch is that you have to generate enough sales to justify the expenses. Otherwise, you’re running at a loss.

There’s a few ways to do this:

  • Get a loan – while your family is the first port of call, I’d advise against this unless they have deep pockets. There’s no guarantee they will get their loan back, especially if this is your first business.
  • Sell something – rather than ask for a loan, look at selling things you no longer need and/or work extra hours to create a little nest egg that you can invest in the business.
  • Trade services – work out an arrangement, for example, with a web designer, that you’ll provide some service for him/her if they create your blog for you.

Once you have the seed money you need to invest in the business, you can do promotions, run ad campaigns, get the best equipment, and also travel to network at shows, conferences and events.

The top bloggers are always on the road at trade shows, conferences and events.

Ever wonder why?

To network and make connections.

On the web, you’re only as successful as your network.

Want an example?

Ever notice when a new product comes out…. suddenly all the A Listers Bloggers write about it the same day. In other words, the product launch is synchronized across all the top blogger sites to have maximum impact.

Which partly explains why your blogging efforts – and sales – don’t have the same reach. Your network is smaller, that’s all.

So how do you fix this?

Let’s be honest, you’re not going to get into the inner circle from day 1, but getting out and meeting other bloggers will speed up the process.

So, having access to capital (i.e. greater cash-flow) allows you to invest in the best products and build your business faster.

How?

  • Outsource – instead of doing everything yourself (coding, design, marketing, emails, support), you can delegate the task to a VA and focus on areas that generate more money.
  • Advertising – instead of waiting for others to find your site organically, you can invest in ad campaigns and get your site noticed faster.
  • Connections – having funds also allows you to meet others at shows and form alliances. It’s hard to do this over the web. Otherwise, why would there be trade shows? It’s all about networking.

How to Build a Business v Blog

This leads into the next point. How are you going to make real money?

The Achilles heel of blogging is that the moment you stop blogging, it starts to fade. You need to service it all the time.

whereas…

The advantage of a business is that it’s less about you and more about the products you deliver.

For me, 80% of my income is from sites not blogs.

So, before you go too far down this road, look at your business model and see which has the greatest long-term rewards.

Here are some business models to consider:

  • Advertising
  • Joint Ventures
  • Affiliate Marketing
  • Digital Product Development
  • Software Development
  • Royalties
  • eBook Publishing
  • Consultancy
  • Membership forums
  • Subscriptions
  • Services, e.g. SEO
  • Trading e.g. ebay
  • Flipping aka buying and selling sites/domain names

These are some ways you can create money from a site/blog.

Note that this has little to do with SEO, Plugins, Themes, Hacks or the mechanics of running a blog.

It’s about running a business.

And what’s so great about running a business?

It’s easier to sell!

Investors can estimate how much revenue it stands to make and can give you an offer based on the income minus expenses and also factoring in other variables such as the industry sector and market demand.

Selling a blog, especially a personal blog, is a much harder sell.

How Much Do Bloggers Earn Per Hour?

This brings us back to the original point. How much do bloggers earn per hour?

Here’s how to work it out.

  • Estimate your sales over a 12 month period – $25,000
  • Calculate your expenses over a 12 month period – $5,000
  • Profit – $20,000
  • Divide the profit by 330 working days – $60
  • Divide this by 4 hours per day – $15

This looks great… if you can earn 25k per year.

If your business is earning about 2k per year and over 1k is going on hosting, training, travel, software, then you may be making very little or even running at a loss.

  • Estimate your sales over a 12 month period – $2,000
  • Calculate your expenses over a 12 month period – $1,000
  • Profit – $1,000
  • Divide the profit by 330 working days – $3
  • Divide this by 4 hours per day – $0.75

That’s how much you’ll earn per hour.

Is Blogging Worth it?

It depends on how much you enjoy it, how much you want/need to make money, and the opportunities for future growth.

I made very little for the first few years but then, over a three year period, transitioned from a full-time office job to a full-time ‘web’ job.

For you, maybe the transition will be quicker. Maybe you have the time, energy and smarts to make it happen.

Whatever you do, use your time wisely. And don’t be ‘pennywise and pound foolish’.

Get the best equipment you can afford, take the best courses, and then put your best foot forward.

What else would you add?