Short-Term Money Makers Versus Long-Term Businesses
Friday, May 15th, 2009Welcome back!
Short-Term Money Makers Versus Long-Term Businesses
Making money online is simple. Identify what people want, figure out a reliable way to reach them, and position yourself between them and the product.
The basic process of generating income is the same whether you’re launching Adsense sites, selling information products, promoting affiliate products, or managing membership sites. The opportunities you can leverage to make money online are only limited by your imagination.
Having said that, a lot of online entrepreneurs make a devastating mistake: they focus entirely on short-term money makers. To be sure, there’s a lot of money involved and its scent can be seductive. The problem is that such opportunities offer limited long-term potential. There are scores of people who have gone from making over $100,000 a month to scrambling to pay the mortgage.
Today, I’m going to make a quick case for exploiting short-term money makers. But, more importantly, I’m going to explain why you need to focus your time and effort on building long-term businesses.
The Case For Short-Term Money Makers
There will always be fads that offer the potential for a quick payday. If you can identify them and act quickly, you can make money – often, a lot of it. For example, PPC marketers immediately jumped onto the acai berry phenomenon, building keyword lists, designing landing pages, and creating ads for lucrative affiliate offers. Similarly, entire websites have been built around specific celebrities who dominate the popular media. Their owners use search engine optimization strategies to drive thousands of people to these sites each day.
The income from these short-term ventures can be staggering. The top affiliates are making hundreds of thousands of dollars each month. But, one day, the income will dry up completely. It’s already happening in the acai berry space. And it happens to nearly every short-term money maker.
Advantages Of Building Long-Term Assets
When you build an online business as a long-term asset, you insulate yourself from market volatility. The income generated from such assets is sustainable. It’s rarely buffeted by unpredictable legislation or haphazard media coverage.
For example, suppose you’re building an information product business in the dating and relationship space. It’s an evergreen market. It will outlast us all. Most online marketers might create an ebook or two, using free internet marketing methods and hoping for a quick burst of cash. In doing so, they waste an enormous opportunity that can produce sustainable income. There are a number of info-product businesses in the dating and relationship space that are generating high 6-figure – and in some cases, 7-figure – incomes for their owners. What’s more, they have been doing so for years.
That is the nature of long-term assets. Their income potential cannot be matched by short-term money makers.
Creating Your Exit Strategy
There is another important reason to focus your time and energy on creating long-term businesses: they can be easily sold. While money makers can generate high levels of income, they don’t fit well within an exit strategy. Their immediate inherent value is questionable. For example, acai berry websites have been selling for a measly 2 times monthly earnings, a pittance compared to the multiples paid for more sustainable businesses. In a year’s time, it’s doubtful whether those sites will even be able to attract that much.
At some point in the future, you’ll want to sell your business. Whether you want to retire or funnel the capital into other promising ventures, having that exit strategy is critical. But, it is practically impossible to plan your future exit from short-term money makers.
Here’s the bottom line: exploit money makers if you can identify them and act quickly. But, focus your effort on building long-term business assets. Years down the road, you’ll be glad you did.
