How long will you trade hours for money?

hoursmoney.jpgSubscriptions are probably my favourite method of monetization. Sure you need a product or service and it can take a fair bit of setting up but no other method can bring the sustained and everlasting gain that subscriptions can.

Initially you need a service or product, this could be added features in a forum or a club or membership to a website, for my tattoo site I being the unskilled entrepreneur looked for a way to create a service/membership without doing much myself. I contacted a few artists through other websites and asked if they would be interested in building a library of art/images that could be offered for inspiration, the first payment from new registered members would be shared between all of us.

That was the easy part and within a few months I went from one artist up to 3 adding images and soon had over 1000 online tattoo images in the library all submitted for free and arranged into categories. The problem I found was that I could only have around 3 artists or so as adding much more would affect our share too much, sure I could have taken a different approach to go for more artists & therefore images but my goal was to have around 2000 in the library which we have long since passed.

Pricing was the hard part and one I chopped & changed and may yet change again, I started by offering access for $19.95 for 6 months but as I added new artists and had 5 artists sharing the membership money I changed to $39.95 for 12 months access. This is a subscription that repeats and re-charges the customer every 12 months.

At the start of this year I bought all the permanent right to a lot of the artwork, effectively paying off 3 of the artists that had contributed a lot of the artwork meaning I will never have to pay them again but they will no longer add any new images, this cost me a couple of thousand but means from every new member that joins at $39.95 I only have to pay out $10, I am also at a point where a lot of repeat charges come through after running the library for a few years.

You can image what a difference that makes to income on year 3 when you usually get 3 new members per day, often after 12 months the repeat charge doesn’t go through due to expired debit/credit cards however around 50% repeat bill and the year after that you may still get around 15% of the original year one’s subscriptions charged again.

Year 1
Average 3 members per day = $119.85 per day
Equals $43745 per year
No repeat subscriptions
Total $43,745

Year 2
Average 3 members per day = $119.85 per day
Equals $43745 per year
50% Repeat Subscriptions from year 1 re-billed = $21872
Total $65617

Year 3
Average 3 members per day = $119.85 per day
Equals $43745 per year
15% Repeat Subscriptions from year 1 re-billed = $6561
50% Repeat Subscriptions from year 2 re-billed = $21872
Total $72178

The target has then been to get more subscribers joining each day and onwards and upwards, by doing the same thing every year subscriptions are one key method whereby your earnings do not stay the same, I am very interested in residual income, I need to know that if and when I stop working the money keeps coming in. I would also add that having this in place would have to add greatly to any valuation of a business if you were considering selling.

Of course that doesn’t take into account adsense on all those pages that generate x,xxx per month and the thousands of pages of content added to the website that help generate traffic through other paying parts.

I have been self employed for long enough to know that hours invested does not always correlate to income. At the start you do more hours for less money, if your smart and do well you get the point where you can do less hours for more money, if your not successful you continue trading hours for money, these are key reasons for being self employed in my opinion and make it impossible for me to work for the same amount of hours each week for the same amount of money.

How long will you trade hours for money?

About Scott Jones

Scott hails from the north east of Scotland and started earning online at the end of 2000 building websites for local businesses during which time he won an award from Lord Alan Sugar for Excellence in Enterprise. After having quite a bit of success with domaining Scott mainly runs educational evergreen websites which generate over 3 million visitors per month but is always on the lookout for a fresh thinking out of the box way to turn a buck. Follow on Twitter.

Comments

  1. One of the things that annoyed me most when I was working for other people was being paid by the hour, no matter what your hourly rate was there was always a cap on the maximum I could earn.

    Nowadays a days worrk might only eanr me a dollar but if that one days work earns me a dollar every day for the foreseeable future I’m a very happy chap.

  2. Great post and content as usual is key to successful memberships. I subscribe to 3 sites that have a ton of content for decent prices. I love the idea of getting others do submit work for profit which generally works out well for all.

  3. Symbiotic relationships are a great way of building something from scratch for free, does take a bit of trust that both can deliver, one side providing content the other traffic & subscriptions. Content as you say is key though.

  4. I totally forgot to mention quality templates for popular programs! *slaps head*

    Granted there are always sites that ofter free templates (like HTML/FLASH for websites) but the quality templates are usually going to come at a price.

    In particular I’m talking about high dollar programs like Adobe Encore for example since the average person doesn’t have it there are limited “free” templates and the best ones are on sites like Visions-UK or DVD Makers.

    Both of these sites have premium membership programs with unlimited downloads during the time with constant updates. Since the kind of people that use these templates are usually professionals who spend a lot of money on software/equipment having a service that appeals to them makes for easy profit potential.

  5. irma coffey says:

    I am looking for an honest, successful start up home business. Any suggestions. I have lots of hours to put into it.

  6. Good links tecwzrd, they are fine examples of subscription based sites that can offer quality goods for a fee.

    Irma: Do you have any set skills you could look to apply or offer Irma, if I were starting I would initially try and build one website on a topic that you are knowledgable about or can research locally to add value to and build on, do you live in/near a busy tourist location or thriving property market or have an existing passion/interest, that’s a good way to start like Al did on the subject of gadgets.

  7. Irma, are you in the US? I can honestly say my wife has tried over 6 different companies in the last 8 years on top of her 9-5 job including Tupperware, Creative Memories, Avon, & Pampered Chief just to name a couple of the more popular ones.

    All of these have modest startup costs for the supplies ($100-$200) and if you have a network of friends or family can be a rewarding fun way of making profit.

    Two years ago she tried a new company called Gold Canyon which sells candles with over 100+ scents and the first year she made $4000+ just selling to friends/family and last year made a little over $10,000 just having 2-3 parties a month. (you make 20% profit on all candles sales) She enjoys doing it and the candles sell themselves with tons of repeat sales since unlike the other products you always need more candles.

    She dropped all the other companies to focus on this one and at the rate she is advancing she will be able to quit her 9-5 job in a couple of years.

    If wanting to start your own business then as Scott said it’s best to focus on your talents and what interests you for your enjoyment or focus on value added services that might be in demand in your area.

    There are tons of links that can help that I’ve listed below:

    http://www.sba.gov/smallbusinessplanner/index.html
    http://www.entrepreneur.com/lowcostbusinesses/index.html
    http://www.businessownersideacafe.com/starting_business/index.php
    http://www.bstartup.com/

  8. Thanks a bunch for the information. I am taking seriously the input that I am receiving. I just didn’t know where to start. I am a single parent, that works full time and attends college in the evening. This coming semester I will be a senior and will have to do 250 hours of internship. This is roughly about two full working days per week-without pay. In addition to that, I have 3 classes that I will need to take this semester. My day schedule will be upside down next semester. I can’t see myself working here, which I have for the last 8 years, considering my upcoming college schedule. I am to graduate in May ’08 with my BSW. Until then, what in the world I am supposed to do for income that I truly need! I will have one son left in high school when this happens. He will be a senior. My oldest son is graduating this year, in a couple of months. I thought it would be a great idea to try doing something at home, such as an internet business. But I am looking for something legit and with integrity. Something that really works.
    Irma

  9. Starting A Business With Pocket Change another good article on http://www.pfadvice.com. Make sure you read part II as well 😀

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