In my view, I have fairly average intelligence. I am able to understand and comprehend a lot of things, but have always found it impossible to dive into a textbook. I think I might have had a homework allergy as well. I concluded in my early 20s that achieving my financial and life goals could not be done through the traditional route of getting a university degree, and getting a good paying job.
Now what?
When you don’t have a diploma or degree, you quickly notice your options are very limited. Your options essentially become trading your time (working) for a low to moderate wage, or becoming an entrepreneur. Build your own business. Entrepreneur… It’s a little risky, but I like the sound of that.
The Failure
I had a great idea. I purchased a marketing textbook in college for $120. When the semester was over, I went to the school buyback program where they offered a measly $20 to buy back my book. I then noticed they were selling this book used at the school bookstore for $80. There had to be a better way! My solution? An online marketplace where students could buy and sell their own textbooks online. Not only could they set their own prices, they could open their market up to schools all across Canada. Even when factoring in shipping costs, you could still double or triple what you would have otherwise received at the buyback program. I talked about the idea with some peers, and it received a lot of great feedback and encouragement.
With the limited knowledge a 1st year college student would have, I got together with a 1st year programming student and managed to launch a functional version of the web site. While Google sent us a lot of traffic, and the web site achieved minor levels of success… it never amounted to the potential it could have been.
Lesson Learned: Reach out to, and become an industry expert
Looking back, I now realize I didn’t reach out to any experts. I didn’t reach out to a teacher, an experienced web developer, a small business expert, and I didn’t network with anyone, outside of my immediate peer group. If I had, they might have advised me on how to make this venture the best it could possibly be. Instead of just barely figuring out how to get this product together and to market the quickest and cheapest way possible… I might have been advised to focus my attention on becoming an expert, and making the best possible service, before bringing it to market. I might have received the wealth of knowledge I needed to launch this business, if I asked for it. I might have become the single biggest authority in Canada on used textbooks, if I hadn’t become distracted from the mission due to the initial poor results of my venture.
If you are about to start a business of any kind, I believe it is of the upmost importance to become an expert in your field. You might need the real life experience of actually starting and running a business to become a TRUE expert, but do as much as you can prior to that by educating yourself and reaching out to others who can help you. If you are not an expert, reach out to experts in your field and learn from them.
The Failure
While developing the Textbook Exchange, I wrote an article on how to save money on textbooks. Using the programming skills I learned in an HTML basics class, I created a really ugly web site that displayed this article online. It was a simple 4 page site, with one long article. I put this online and didn’t think much about it, when I started noticing larger volumes of traffic checking out the site. Eventually, I was asked by someone if I would place a text link ad on my site to theirs. They offered to pay me $20/month for this link. Eventually, I installed Google Adsense ads and managed to get some more web sites who wanted to buy links on my site. I was making about $200/month off this simple HTML site, and was doing it with almost no effort. That was obviously a great feeling, but what if I could duplicate it?
While I was improving my own website design skills, I discovered you could hire freelance writers and web designers online for a fairly affordable price. For around $200 (at the time), I could create another one of these niche content sites. By purchasing a text link ad on a high quality web site for around $20/month, I could build this site up to what I built the last one into. This means for an investment of $200 + $180 for a 6 month text link campaign, I could have another content site generating $200/month income. While I did build some web sites that achieved similar results, eventually Google changed the rules on how they rank small niche content sites, and most of my traffic and income was lost.
Lesson Learned: By putting focus on a limited number of web sites, and creating the best possible content or service… you can create a passive residual income.
Looking back, I can see where I went wrong. Instead of being driven by the desire to create the best possible content site in a niche, I was driven by the greed of earning as much money as possible, in the shortest amount of time. Sometimes this kind of thing is difficult to know while you are going through it, but if I had focused on creating great information on a more limited amount of web sites, Google’s changes wouldn’t have had nearly the effect on me they did.
Building a business that pays you a passive, residual income is entirely possible. It is a great income earning strategy because you can put in the effort now, and create a financial piece of mind for yourself in the event you can’t, or simply don’t feel like working down the road.
Summary
Building a business that pays you a passive, residual income for when you can’t, or simply don’t feel like working is the ultimate income earning strategy. One of the most effective ways to do this is by creating a web presence, and becoming an expert in your chosen field. Share great content and if applicable, offer an online resource or service that solves a problem. Providing the best solution to a problem or the best and most relevant content in a niche will build the passive residual income you desire. It’s the best way to make an ongoing income, without having to trade your time for it.
As a result of this personal reflection and lessons learned, I am introducing a new blog. The Make Passive Income blog will talk about my ongoing journey of creating a passive residual income. I hope to inspire and teach people what I know, and I hope others will contribute and will help teach me a thing or two. I believe this shared knowledge will collectively help us meet our financial goals, no matter what our background, education & experience is.
This blog will still be kept for the general topic of growing a small business in Canada. I don’t feel like the two subjects will have the same group of people interested in reading it, which is why I’m choosing to do a separate blog.
Do you have any business lessons learned to share? Business failures can be mortifying, but the key is to realize the failure happened to help you grow. It will help direct you to where you want to go, if you allow it to do so.
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