Category Archives for Business Idea

Green Joe Coffee Truck – How to Earn Over $100,000 Working Part-Time Hours

The food truck market reached $1.2 billion in sales in 2015. There are over 4,000 food trucks across the United States with no signs of decline as the annual growth rate reached 12.4%.

But the success of food trucks requires ingenuity on the part of creating a unique menu. On top of that, the food truck business requires a lot of devoted hours.

On the other hand, coffee trucks remove the variability of success from a unique food menu, thus simplifying the steps needed to succeed.

Vincent, the founder of Green Joe Coffee Truck, successfully built a coffee truck business on the side while working a demanding 70-80 hour week corporate job. Now, he makes over $100,000 from the coffee truck while only working part-time hours.

He shares his insight below on how you can start a coffee truck business, profitability and lifestyle. For details on starting a coffee truck, I highly encourage you to pick up his ebook over on his website.

coffee truck | food truck | business idea | how to start a business | residual income

What is the best thing about running a coffee truck business?

  1. Morning hours only
  2. Get to work on my online passive income business
  3. Experimenting with drinks
  4. Traveling
  5. Being my own boss
  6. Expandable business
  7. Non-expiring product
  8. Little start-up cost

How much can you make from a coffee truck?

  1. How much are you making now per year compared to in your employment?

Now we are getting down to the meat! Last year we grossed just over 100k between all businesses. Now, with an employee and a few investments, it probably left me with about 60k. Not bad for part time hours!

  1. How much does it cost to start a coffee truck?

You can start a coffee truck with different budgets:

– $5,000 – $10,000

-$10,000 – $20,000

-$20,000 and above

More over at Green Joe website!

  1. What is the blended margin on a cup of coffee?

Anywhere from 65%-75%. I buy locally so it affects my margins, but I’m happy knowing I help the community. Cheap isn’t always better. It’s been a year and a half since we’ve stepped foot in Walmart. We’ve manage to keep the vast majority of our business local. Coffee = Community. We choose to keep people over profits.

  1. How many coffees do you sell a month and how much income does that equal to per month?  

Each month is different. An okay month is 6k. A great month is 15k!

  1. How much did you spend on advertising initially? How much do you spend on advertising now?

We spend maybe $100 a month on advertising. We do a lot of social media. We also do grassroots advertising. Good old cold calls and flyers. I use Google pay per click for the ebook.

coffee truck | food truck | business idea | residual income | entrepreneur | how to start a business

Isn’t there a lot of competition in the coffee space nowadays?

There is! Which means it’s a thriving business!!! Competition is not always a bad thing. There is very little competition in disposable lighter repair services because it’s a service that no one needs. But everyone drinks coffee!

Do you need any relevant experience?

Experience always helps. But is it needed? I didn’t have any and here I am. I always say that as long as you know what a bad cup of coffee taste like, and you don’t serve it, you’ll be good to go.

The greatest asset I think a person can have is self assessment. Let the ego go. Look at yourself and see where you’re going wrong and learn. It’s not just about coffee. Its about customer service, treating your employees right, having a good tax strategy, closing catering deals. There’s a lot to learn, which means there will be a lot of mistakes. Try to take each one as an educational experience.  Observe, Test, Re-observe. Like anything else in life, knowing is half the battle.

Does this business work in any city?

You have to go where the people are. I like to go to places where there is no parking, because no parking equates to foot traffic. So think about your city, where you have difficult time finding parking and I bet you’ll find a coffee shop thriving there. Coffee trucks are no different.

I do well at festivals, but they often have fees and I often have to hire for them. So, my overhead is higher. I workout at a crossfit gym and we have little fitness competitions. I’ve found I can do equal if not sometimes better at these competitions than at big festivals. The reason why: Low to no overhead, multiple drinks in one day per person and no coffee competition. So it really depends on the situation. You get the swing of it after a few months, how to make good decisions. Sometimes gigs are great. Sometimes they fall flat. That’s the nature of the business.

Can you share an excerpt from your ebook?

The greatest piece of advice I can give a Future Coffee Truck Owner is to get your mind right. Many times I see people self-defeat. They say to themselves, “I can’t because….”. There’s usually an array of excuse that come after; because I don’t have the time, I don’t have the money, I don’t have the experience…What ever your excuse may be, you have to remember, it is just that: An Excuse. The old saying holds true: If there is a will, then there is a way. For example, before my grand opening, I had no barista experience other than my home french press (which I still argue is the best experience you can have). I had my trailer stolen. The original truck I bought to pull the trailer seized its engine. I literally melted my first generator. Challenge after challenge, hurdle after hurdle I had to overcome each of these obstacles. The only thing that held me together was the belief that I could eventually walk on my own entrepreneur two feet. Fall after fall, crawl after crawl, I kept getting up. So, I say unto you Future Coffee Truck Owner, get your mind right. You can. 

Go over to Green Joe Coffee Truck for more valuable information on starting a coffee truck, where you can make $100,000 with part-time hours.

Flipping Houses: How to Flip a House Successfully Your First Time (Download Profit Calculator)

The question isn’t whether you can make money flipping houses. If done right, flipping houses can make you serious money. For example, if you flip one house every 3 months and make $30,000 in profit, you can make $120,000 a year, with just 4 house flips.

But flipping houses can go very wrong, costing you more than how much you can sell it for, and sometimes never even ever completing the renovations before you put your hands up and sell it for a loss.

If you’ve been entertaining the thought of flipping houses but have never taken the step to researching more about how much you can make and if it’s even viable, then this is a good place to start.

Treat this as a big-picture primer of how much you can potentially make from flipping houses and what you should consider before you take the leap.

At the end of the article, DOWNLOAD the step-by-step house flip profit calculator where based on market comps in the neighborhood you’re interested in flipping houses, you can calculate the target price you should look for in the house you want to flip to make a profit.

flipping houses

WHAT’S THE RIGHT DISCOUNTED PRICE FOR A HOUSE (TO FLIP)?

In order to make a profit on a house flip, you have to buy the house at a discount, but how do you know if the house is discounted enough?

First, know the selling price of similar properties in the neighborhood. This is achieved by looking up comparables (or “market comps”). Go to realtor.com and look up the address of the neighborhood you want to flip your first house. Use the market comp worksheet to estimate the average value of similar properties (scroll down to the bottom of the post to download this spreadsheet for free).

market comp | flipping houses | free download

On average, the rule of thumb is for all-in costs (cost of the house, cost to repair, cost to sell) to be less than 70% of how much you can sell it for after all the repair (aka After Repair Value or “ARV”.

BUY IN A NEIGHBORHOOD WHERE HOUSES SELL FAST

You want to sell as quickly as you can after you’ve finished the repair (aka rehab) since that was the purpose of flipping the house. How quickly your house sells will depend on whether the neighborhood is already a typically hot market. So, you want to pick a neighborhood where houses sell quickly. Every neighborhood varies in terms of how long a house sits on the market for. But the rule of thumb is to look for neighborhoods where houses sold within 10 days of listing. Look for these neighborhoods to flip a house in.

real estate | flipping houses | sold

HOW MUCH CASH DO YOU NEED TO BUY THE HOUSE?

Unless you have hundreds of thousands of dollars in your bank account (in which case, what are you even doing here?!), you’ll need to take out a mortgage to buy a house to flip. Lenders won’t lend more than 80% of the value of the house if you won’t be living in it, so consider that the cash you’ll need is at least 20% of the purchase price of the house.

Also, closing costs are 2-5% of your purchase price (which u can calculate in detail here if you want to know more.) So, factor this into how much cash you need to start your first house flip.

HOW MUCH DOES RENOVATION/REPAIR (aka “REHAB”) COST?

Needless to say, rehab cost depends on the shape that the house is in when you purchase it. If you purchase the house at a 10% discount to market value and all it needs is an outside paint job and landscaping, then all-in cost might only be $3,000. On the other hand, if you buy basically just the skeletal foundation of the house, renovation rehab cost can be $150,000.

Two professional house flippers provide the following useful data (which I’ve summarized the analysis as below):

  • Average rehab cost ranged between $25,000 – $40,000 per house out of a dataset of 50 house flips. Of that, 25% was materials cost and 75% was contractor/labor cost.
  • A typical cost estimate of each “job” that needs to be done to the house can range from $20,000 – $100,000. You can download the detailed cost estimator here.

flipping houses | profitably | contractors

In order to stay within your budget, it’s critical to hire a reputable contractor. A good free resource is to start attending a real estate investors club on Meetup – you can get some very helpful advice from people with experience who can recommend reputable contractors. Reach out to at least 3 contractors and obtain written bids from each (and give your rose to the one).

HOW MUCH PROFIT CAN YOU MAKE FROM FLIPPING HOUSES?

From the data set of 50 house flips, the average profit was $20,000 – $50,000 per house.

Was there a correlation between the amount of work that went into repairing the house vs how much profit was made? Interestingly, no.

flipping houses | rehab cost | repair cost | cost to flip houses

A run-down house that needed $70,000 in rehab cost made a profit as much as a house that needed $20,000 in rehab cost.

Another interesting finding was that the Return on Investment (“ROI”) was higher for houses that had lower all-in rehab costs (contractor/labor and materials).

rehab cost | flipping houses | cost to flip houses | roi for flipping houses

Key takeaway from this: a cheaper, more run-down house doesn’t equate to higher profit. Renovating a more run-down house will cost more relatively and erode your profits.

A sweet spot is a house in a state that requires about $15,000 – $25,000 of all-in renovation costs. From the dataset, that window resulted in $15,000 – $45,000 in profit.

MAXIMUM PRICE YOU SHOULD PAY FOR HOUSE FLIP (DOWNLOAD FREE CALCULATOR)

Again, don’t forget that there are additional costs associated with buying the house (such as closing costs of 2-5% of the purchase price) and with selling the house (e.g. real estate agent commission of 5-6% of the sale price, a portion of the buyer’s closing cost, taxes which vary by state 0.01% – 2%, and other costs).

Taking all of these costs into account, I’ve created a spreadsheet you can download for free at the end of this article to calculate the maximum price you should pay for your first venture into flipping houses.

flipping houses profit calculator

Thank you for reading and hope you found this article helpful. After researching and writing this article, I’m definitely more interested in flipping houses and will be using my spreadsheet to patiently wait for the right house at the right discounted price in the right neighborhood to pop up.

How to Become a Freelancer and Earn Over $100,000

It’s Monday yet again. A blink and your weekend is gone. Your alarm screams at you to get up because your cubicle awaits. Each drag of your foot feels heavy and unnatural. Why can’t you wake up at 10am, make yourself a nice big breakfast, and power up your laptop to work on your own time? Believe it or not, you can live this life.

This is the luxurious life of freelancers. What makes it luxurious? They have what we all crave more of – freedom.

If you’ve ever dreamed of this life of a freelancer, you’re not alone. But you don’t have any technical skills to offer? This is not a get-rich-quick scheme by any means. It will take months, maybe years (depending on your level of commitment) to achieve this success. First you have to learn the skill, then you have to find clients on online freelance sites like Upwork or Fiverr.

Even though it may seem like a faraway dream, it is closer than you think. Let me show you how.

freelancer | entrepreneur | business idea | passive income

How much can you make as a freelancer?

First, you may be thinking, “but all the freelancers I’ve met are struggling to pay the bills.” Do freelancers even make enough money to live a comfortable life?

The answer is: YES. Of course, as with any job, how much you make depends on: your skills, your reputation, and how you sell yourself. The beauty of freelance work is that you remove the bureaucracy of navigating up a corporate ladder, so your efforts can directly result in success. That means, if you continue to hone your skills and do great work, your clients will recommend you, you will build your reputation, and you can attract the work.

I gathered data on the top paid freelancers on Upwork. There were a number of developers who made well over $120,000. I also found a user interface graphic designer who made $260,000 in 2016! The result of my research showed that it is certainly possible to make enough money to sustain a comfortable lifestyle.

However, as you would expect, how much you can make as a freelancer varies by skillset. Let’s now look at a breakdown of income earned by skill.

Which skill should you learn to become a high-paid freelancer?

I collected data on 50+ freelancers with skills in high demand and analyzed how much income they generated in 2016.

As expected, web developers had the highest average income earned in 2016 with over $120,000.

App developers (for iOS and Android) made close to $100,000.

User Interface (UI) / User Experience (UX) designers came in 3rd place with an average of $70,000.

App software testers for quality assurance (QA) made an average of $60,000.

Top paid graphic designers made a little over $50,000.

how much can you make as a freelance developer | how much does a graphic designer make

One thing in common with these top paid freelancers across all the skillsets is that they had comparably less number of jobs (aka orders) but made more money than the rest in their category. And the reason for that is because they were hired by companies or organizations that required the freelancer’s help with overseeing an entire project as opposed to a one-off logo or website building.

For example, one developer was hired to create the website and e-commerce platform for a retail company. Another example is a graphic designer was hired by a non-profit organization to oversee an entire branding campaign. And I also saw an app developer get hired by a real estate company to create a dynamic app for them and was retained even after the roll-out of the app to continuously make upgrades.

learn to code | learn photoshop | adobe illustrator course | user experience course

Where can you learn the skills to become a freelance entrepreneur?

It’s no surprise that developers made the most money as a freelancer. But as mentioned, the primary driver was because it is more likely that their jobs come in the form of big projects that take a long time to complete.

If you’ve decided which skill you want to learn (maybe an hour a day while you’re working full-time at your corporate job until you are proficient enough in the skill to become a full-time freelancer), these are great intro courses on Udemy that can start you off for literally a fraction of the price as if you were to take a class in-person.

Web Developer

1. Web Design for Beginners: Real World Coding in HTML & CSS – 9 hours (4.7 stars, 1,300+ students)

Click on the image to check out the course

2. The Complete Web Developer Bootcamp – Beginner to Expert – 21.5 hours (4.4 stars, 1,300+ students)

Click on the image to check out the course

App Developer

1. iOS 10 & Swift 3: From Beginner to Paid Professional – 71.5 hours (4.5 stars, 6,700+ students)

Click on the image to check out the course


2. Android N: From Beginner to Paid Professional – 25.5 hours (4.4 stars, 1,100+ students)

Click on the image to check out the course

UI/UX Designer

1. UI Design in Photoshop – Start Designing Web & Mobile Apps – 11 hours (4.6 stars)

Click on the image to check out the course

Graphic Designer

1. Beginners Adobe Photoshop CS5 Tutorial – 13.5 hours (4.9 stars)

Click on the image to check out the course

2. Beginners Adobe Illustrator CS5 Tutorial – 10 hours (4.7 stars)

Click on the image to check out the course

I will be taking some of the courses above in the future. Would love to hear from those who begin this journey and the progress you’ve made!

What are the secrets to making over $100,000 and standing out from the crowd?  

One last thing to leave you with. I want to reiterate a point I made earlier. The data I showed above is the average income earned by the top-earning freelancers on Upwork. If you are serious about becoming a freelancer and you want to start today by learning a skill that’s high in demand, you should leave this article equipped with the knowledge of what makes the top-paid freelancers stand out.

What I’ve observed is that it goes without saying, but your skills should speak for itself. As you hone your skills, follow these tips  when you are selling yourself on Fiverr or Upwork:

  1. Target companies as clients and offer to provide work for an entire program as opposed to one gig. At first, you will need to do small gigs to get favorable reviews. So, offer small gigs for what you know you are an expert at for cheap. Then, market yourself as a controller or project manager who can oversee the completion and implementation of an entire project or campaign.
  1. Another tip from what I’ve observed among the highest paid freelancers on Upwork and Fiverr is that they offer to connect the clients with competitors that they know are excellent in the field if they can’t offer what the client is looking for. Basically, on an automated platform, you are providing an extra level of customer service, and that seems to go a long way.
  1. Lastly, make sure to post your portfolio of completed work, especially for big projects.

I hope you found this article useful. If you’re not ready to take a course to learn a skill yet but it’s one of your 2017 resolutions, make sure to pocket or save this page and come back to it later.

Please subscribe for more articles like this and would greatly appreciate you sharing it with friends!

How Much Can You Make as a Travel Blogger?

It seems like a far-fetched dream – getting paid for traveling? Watching travel shows on TV I often wondered how the heck those people got so lucky that they don’t have to sit under fluorescent light all day, 5 days a week. But thanks to the popularity of blogs, getting paid for traveling actually is an attainable dream.

Travel blogs started taking off years ago. Many veterans of travel blogging started in 2006-2008. So one might wonder if it’s too late to become a travel blogger since it’s a saturated space. But what I’ve found from my research is that there are plenty of travel bloggers who started in the last year or two. And in fact, thanks to varied social marketing platforms such as Pinterest, travel bloggers who are savvy with their social media strategies are able to herd visitors to their site no matter how late in the game they entered. The audience is ever-evolving, which means there will always be an audience.

Now, the question is: How much can you make as a travel blogger? Is travel blogging actually profitable enough to sustain a lifestyle? It’s a crazy thought to quit your job and rely on the cloud to bring in income while you are relaxing on the beach in Chile or wading through a forest in Cambodia. But to answer this question, I collected data from 7 travel bloggers who currently publish or have published income reports recently, and went to work analyzing the data.

It’s worth mentioning that the first thing I noticed while looking through multiple travel blogs is that there are 2 distinct types of travel bloggers: ones who live abroad (i.e. travel long-term) and ones who take trips (be it a week at a time or 2-3 weeks). This gives me great hope that anyone can start travel blogging part-time while they have a full-time day job and eventually can turn travel blogging into full-time if they wish.

Here’s what I found on how much you can make from travel blogging. First, let me lay out the foundation.

SUPPORTING DATA FOR THE ANALYSIS

I went a little crazy and combed through each income report and then further categorized them to be able to compare the data set across all the travel bloggers. This is a snippet example of the research & analysis phase I conducted (just to show that there is substance behind the numbers I present in this article):

This is data and analysis for just ONE of the travel blogs. See below for source.

A little tidbit about each of the travel bloggers whose income reports I analyzed:

  1. Travelblogbreakthrough.com (Denoted as “TBBT” wherever mentioned below) – A former management consultant who has an engineering background, originally from Toronto, Canada. Thought of the idea to quit and travel back in Dec 2011. After half a year of planning, concept turned into reality in May 2012.
  2. Thewanderinggourmand.com (“TWG”) – A stay-at-home dad who started the travel blog part-time in 2009 and finally quit his day job to dedicate to the blog full-time in 2014. His unique niche is craft beer and food blogging while on travel.
  3. Wanderluststorytellers.com.au (“WLST”) – A family of 5 from Australia. Family-friendly travel blogging. They are relatively new – started travel blogging part-time in June 2015 and turned it into full-time in February 2016. In a year and a half, they’ve built a loyal base of viewership to 14k – 25k unique visitors per month. Their strategy is Pinterest and Instagram, with more than 12k followers on Instagram.
  4. Livingthedreamrtw.com (“LTD”) – A couple who started travel blogging back in 2010. They now have a team of 4 including themselves. They’ve leveraged their blog into selling trip planning services.
  5. Wheressharon.com (“WS”) – Perhaps one of my favorites. It’s a one-woman show on her blog (actually, a portfolio of blogs), but travels include her husband and kids. Started full-time travel blogging in October 2013. She is incredible – systematically grew her visitors to the website with a healthy growth month over month since October 2013, and her income is solely focused on truly passive income – affiliates and commission.
  6. Freshoffthegrid.com (“FOG”) – Also a pretty new travel blog – started in August 2015. This couple carved out a very niche segment of travel blogging. They do road trips and camping in the US. They blog about camping food and do collaborations on camping food recipes.
  7. Nerdynomad.com (“NN”) – A long-time travel blogger. Not too much data on income reports, but wanted to point this blog out because of her unique product that’s done very well in sales – a physical customized map of the city she traveled extensively.

PROFITABILITY SNAPSHOT

The risk with making travel blogging your livelihood is not at the start of the new lifestyle/business venture but in the midst of it. That is, the upfront cost is very minimal, as basically, you can have a website running for $100 and you’re off to the races.

Typically, depending on the size of the blog (i.e. how many visitors the site gets), the average monthly income generated by travel blogs is between $1,000 – $4,000. Once the blog has a sizeable visitor traffic, the travel bloggers can also receive sponsored trips whereby they can travel for free, which can typically be valued between $2,000 – $4,000. Hypothetically, if you hustle and are able to get a sponsored trip every month, you can be traveling for free and generate $2,000 a month from the blog.

Because business expense is so low, travel blogging can definitely be a profitable business venture or a way to live.

HOWEVER, travel blogging is NOT as passive as you might think. If you think “set it and forget it” mentality is going to work, then you can forget it altogether. From my research and analysis, I found that the passive portion of the income is quite low.

So then, which income stream does pays the most for a travel blog?

INCOME SOURCES – HOW TO MAXIMIZE INCOME ON A TRAVEL BLOG

I categorized the income data collected on the aforementioned travel blogs into the following:

  1. Affiliate Income – hugely dependent on # of visitors
  2. Advertising Income – hugely dependent on # of visitors
  3. Freelance Income – not dependent on # of visitors
  4. Product Income – so-so dependent on # of visitors
  5. Sponsored Income – so-so dependent on # of visitors

More on each income source as follows:

1. Affiliate Income

Interestingly, what I found was that income earned through passive means is unfortunately not very high in most cases.

Affiliate income averaged around 9-10% of total income, earning on average $10 for every 1,000 visitors. Which means that if you were consistently getting 50,000 visitors every month, affiliate income would draw in $500 a month.

One exception is wheressharon. Affiliate income made up ~60% of total income and for every 1,000 visitors, she earned 6.0x the amount compared to other travel blogs. Her biggest source of affiliate income came in the form of commissions. What she does well is she has commission/affiliate based sources that focus on bigger ticket items when traveling. For example, her commissions are from Hotelscombined.com, Booking.com, Agoda.com, and Airbnb.com.

2. Advertising Income

Advertising is also not very high for most travel blogs. The standard run-of-the-mill advertising sources of income that overlap across most of the travel blogs are:

  • Google Adsense
  • Monumetric (Formerly The Blogger Network)
  • Spoutable
  • Sovrn

3. Freelance Income

Freelance is interesting but tricky because of the hustling involved but also the limitless amount of money you can make from it. The typical freelance work I’ve seen employed by travel bloggers are:

  • Writing for other travel sites, drawing from their travel experiences à copypress.com
  • Photography
  • Web/graphic design services

In certain months, you can make as little as ~$300 and then jump to $2,300 the next month when you get a bunch of work (as in the case of FOG).

4. Product Income

Income from products can have a double benefit – you not only leverage your travel blog’s audience to sell your products, you can also use it as a lead magnet to attract visitors to your website. It is the most interesting source of income to me, because you can be as creative as you want in creating a product that aligns with your travel blog. Ebooks are the most prominent for travel blogs. Online courses can be found as well. Trip planning services are also hugely popular as a product offered on travel blogs.

One of the most unique products I’ve seen is NN’s customized physical map of Kigali, Rwanda. It has illustrations and tips, and one of the more successful months brought in $5,337 just from sales of the map!

Another product where it pays off being in a niche space is FOG’s recipe collaborations. Their travel blog niche is camping. So, they often engage with other sites or magazines to come up with camping food recipes, which I think is so creative and effective in leveraging your skillset.

5. Sponsored Income

If you’re lucky or if you’re an authority in your field, companies will approach you to be a sponsor of your travel blog. But most often than not, you have to be the one hustling to get sponsorship. You do need to have built a sizeable web traffic to your travel blog to secure sponsorships. But, I was pleased to see that you don’t need that much traffic to start rolling in the dough.

How many visitors do you need to get sponsors’ attention? Here’s a snapshot (explanation below):

Key takeaways (each corresponding letter in the snapshot explained as follows):

A. TWG has less than 7,000 monthly unique visitors and still secured sponsorship of an average $260 a month. WLST had 14,500 monthly unique visitors and secured $660 on average.

B. Although FOG doesn’t report the number of visitors to their site, they’ve only been around for a year and a half, they started around the same time as WLST, so more likely than not, their unique visitors are between 7,000 – 15,000, and they were able to secure ~$300 on average in sponsorship income.

C. With 14,500 unique visitors, WLST got $1,000 – $2,500 worth of free sponsored trips.

D. WS got $4,000 worth of free sponsored trips when they had 35,000 visitors.

So, we could summarize that by saying sponsors will partner with travel blogs that have as low as 7,000 monthly unique visitors. And you could potentially make $4,000 in value from sponsors when you have 30,000 monthly unique visitors.

Oh, and a worthy mention is that for the travel blogs that reported both unique visitors and pageviews, the relationship between these two site statistics were very similar. It was 1.5x pageview for ever 1.0 unique visitor.

HOW LONG DOES IT TAKE TO START EARNING INCOME ON A TRAVEL BLOG?

Thank you for staying with me up to now. Hope it was worth it. (And if it was, then please subscribe for more posts like this breaking down how much you can make as an entrepreneur!)

You’ve seen from real examples of travel blogs that you can make a living as a travel blogger. It is possible to quit your day job that you feel stuck in and get paid to travel. It takes work as with anything else, but as illustrated above, there are many ways to get creative in earning income and to me, that’s the appeal of becoming a full-time travel blogger – there is no limit as to how much you can make. It really depends on how much traffic you get on your website and how much you hustle to get sponsored income or make products to sell to your audience.

We’ve seen that you can make a sizeable income just from 7,000 monthly visitors to your website.

Now, the realistic picture. How long does it take to get 7,000 visitors, 15k, 60k,…

As in our example travel blogs, WLST and FOG are making $2,000 – $4,000 a month (including non-cash value) in just a year and a half since launch.

But it must be noted that WLST spent an average of almost 50% of income in advertising/marketing expense to promote the blog. On one hand, this might come as a shock. That is a huge chunk of the income that you won’t see. On the flip side, it is evidence that advertising/social marketing is an effective tool to grow your audience to the level where you can make a significant amount of money on your travel blog.

Now that you’ve read how much you can make from travel blogging, are you ready to take the plunge? Or do you feel that it is not enough money for you?

Well, if you’re more convinced than ever that you want to finally quit and live a nomadic life as a travel blogger, these are strategies that you can employ to grow your travel blog as fast as possible once you have it up and running.

10 STRATEGIES TO GROW YOUR AUDIENCE ON YOUR TRAVEL BLOG

These are strategies that successful travel bloggers (i.e. where the data came from) use everyday to grow their web traffic. Most of them are not secret. But it is good to mention even the obvious, simple tips that are adopted by the incumbent travel bloggers. These strategies are:

  1. Consistent, frequent posting (3 posts a week)
  2. Promote an old post one day a week (e.g. Throwback Thursdays)
  3. SEO – use keywords in the file name of images; make Google Images as a referred source
  4. Advertising on Alex in Wanderland, Facebook
  5. Engage on other website forums
  6. Become a featured writer on Trip 101
  7. Create lead magnets that draw people to your website to download for free – advertise catchy and beautiful graphics for lead magnets on Pinterest and Instagram
  8. Active social media marketing on Pinterest and Instagram – Tailwind for Pinterest
  9. Write social media influencer posts on Tribe, Vamp, or Pay Per Post
  10. Have a unique position – e.g. outdoor camping travel, healthy eating while on travel, Mexican restaurants across the US travel, etc.

Thank you for getting this far! It was a long post but I hope it was worth it. If you are already a travel blogger, I would love to hear your thoughts about how the above applies to you. And if you aren’t a travel blogger but are a 9-5 employee feeling stuck, I hope you found this analysis helpful in making a decision in one way or another in regards to travel blogging. Would love to hear your thoughts as well.

Hope to see you back here in the next post.

Is It Profitable To Make An App?

How much it costs to build an app depends obviously on the type of app you want to build. If it’s a complex enterprise app where you want your customers to have customized login profiles and have the ability to do dynamic functions, then this will involve a backend server. These kinds of apps cost at least $150,000 to over a million dollars.

As a bootstrapping entrepreneur who wants to invest my time and money into building a passive income business, I simply want to know what the very minimal cost is to have a mobile app that can generate revenue. And what the potential typical revenue I can generate from it looks like. I don’t have an idea for an app right now, because it depends on how much it will cost me. If I find out that I can build a complex app for $1,000, then I’ll have all sorts of ideas flowing but if for $1,000, all I can get is an app that basically displays images, then my idea would be very different. So, putting the idea on pause, this is what we are uncovering today:

  1. COST: How much does it cost to build a simple app (i.e. what is the minimum amount required to build an app and to maintain it?
  2. REVENUE & PROFIT: How much can one generate from such an app? What is the ROI? Are there other costs associated once the app is built?
  3. NEXT STEPS: Everything looks good. I want to make the cheapest and most profitable app. What are the next steps? (Stay tuned for Part II)

(Note: Since many articles online tell me that Android can be 3-4x more expensive, I am only addressing iOS here. Since basically want to get down to the skeletal costs and profits to be gained associated with building an app as a budding entrepreneur looking to start a passive income business.)

Let’s get started.

1. COST

COST TO BUILD AN APP

The cost of building an app is determined by the complexity of what it can do, and who makes the app (i.e. learn to code and do it yourself, use a freelancer, or go full-blown and use a big app agency). Below is a snapshot of a typical price range varied by those factors:

Source: https://savvyapps.com/blog/how-much-does-app-cost-massive-review-pricing-budget-considerations, http://codewithchris.com/how-much-does-it-cost-to-make-an-app/, http://www.applicoinc.com/blog/much-cost-build-app/, http://www.zdnet.com/article/how-to-break-into-the-mobile-app-business-for-free-or-cheap-and-no-programming-skill/

As someone with no coding experience but wants to build a passive income business with sweat equity and minimal dollars invested, the two obvious choices are learning to code yourself or using an app maker software. There are online courses you can take for as little as $15 for the introductory class, eventually taking several more to be able to code. Or, there are in-person bootcamp classes you can take. They are offered in metro cities all over the world. They usually run for 12 weeks and cost ~$5,000 on average. Some of them also help you get a job after. Personally, I would love to one day learn to code, but right now, my aim is to publish an app as soon as possible, so for the remainder of the profitability analysis, I will focus on building an app via (1) app maker software and (2) offshore freelancer.

GRAPHIC DESIGN COST

Unless your app is Craigslist style, you’ll end up having to make your graphics through a freelancer. This will cost $500-$1,000. App maker software has templates and stock photos you can select. Assuming this is the minimalist route, we will assume you forego the extra graphic design cost for this option.

RECURRING COST

Once you publish your app, you will have to make upgrades every year. The average cost to upgrade and maintain for 2 years was found to be twice that of the cost to build (i.e. cost to build was 35% of total costs for 2 years). This would affect the app maker software as publishing it multiple times means you need to upgrade to a more costly membership.

In addition, publishing your app on the App Store costs $99/year.

MARKETING COST

Unfortunately, building the app alone is not enough. In order to have the potential of generating revenue, you need people to download the app. This Cost Per Install (CPI) is basically a measure of how much marketing dollars you spend divided by how many users you acquire. The average Cost Per Install for an iOS app in 2015-2016 was $1.64 in the US and $1.24 globally. Non-game CPI is lower at $0.58 for an iOS app globally.

TOTAL COST

So far, assuming your app is simple, the annual cost of your app in the launch year is:

2. REVENUE & PROFIT

The business model you choose for your app is sensitive to the type of app it is and how users have typically engaged with similar apps. If, for example, your app is a social photo-sharing app like Instagram, you would not have any luck charging a premium to download (unless your app has something special that Instagram doesn’t). If your app is a specialized post-grad educational tool that currently does not exist in the App Store, then you’ll have better for this type of app in charging a premium like $19.99 to download. The most popular business model is the freemium model, whereby it is free to download and play, and users can make in-app purchases. Top games that generate millions of dollars have seen the most success with this type of business model.

The most common business models to consider are:

  • Freemium: Free to download and initially play. Revenue is generated via in-app purchases. (e.g. Games)
  • Pay to Download: Charge a free to download.
  • Subscription: Your credit card is charged every month or annually for using it. (e.g. Workout apps for monthly, productivity apps for yearly premium subscription)
  • In-App Advertising: Free to download and use but advertisements show on the screen outside of the control of the user.

Below we look at each of these models and the potential revenue it could generate based on further assumptions.

Freemium

  • ~5% of app users spend money on in-app purchases (Source: AppsFlyer)
  • On average, these users spend $1.08 on iOS on in-app purchases (Source: AppsFlyer)

Using these assumptions, potential revenue generated from in-app purchases for 100,000 installs is over $5,000.

Pay to Download

This is obviously the ideal situation where you have a fixed price and the user pays to download it. You make bank right there and then upfront. $0.99 is the minimum you can charge for a premium app in the App Store. In addition, $0.99 is the most common price beyond moving away from the free-to-download model. 1 million downloads charged at $0.99 brings in a million bucks. Seems like the obvious choice. However, users are 5 times less likely to pay to download an app than downloading a free app. In addition, the availability of paid apps (including paid apps that offer in-app purchases) are assumed to be 30% of the number of free apps. For simplicity and consistency in comparing the models, these were treated as probabilities. The potential revenue model for a paid-app is:

Subscription

Depending on the type of app, a subscription price can range from $5/mo to $30/mo to $30/year. The average retention of a customer after a month is 30%. By month three, 93% of the users who installed the app are gone-zo. Subscription-based model is also relatively new. As such, the availability of subscription-based apps is much lower than even pay-to-download apps. Applying a similar assumption as paid apps above in comparison to the freemium model, the revenue potential for a subscription model is:

In-App Advertising

For the user, it’s free to use the app but at the expense of watching forced advertising videos or banner ads flashing at the bottom or top of the app. The effective Cost Per Million (eCPM) is how much the advertisers will pay you for every 1,000 impressions, i.e. for every 1,000 times the advertisement is displayed to the user while using the app. In 2015-2016, the average eCPM was $4 for iOS apps. The revenue is the lowest compared to the other models. You need a lot more users in the app, especially with the downward trend in CPM that advertisers will pay.

TOTAL PROFIT BY MODEL

Putting it altogether (the costs and revenue by business model), below is the total annual profit in the year it launches and in year 2. Note: Cost Per Install was assumed to be an intermittent cost as marketing campaigns were launched in successions.

The takeaway is that unless you’re confident that your brand will promote the app on its own and thereby not requiring the cost per install, CPI will be a huge component of your cost. With CPI, your app will start becoming profitable after it reaches close to 100,000 downloads. Of course, if it’s subscription based, you will start being profitable with much less downloads. And on the other end of the extreme, in-app advertising will require you to have a lot more downloads and users for you to break even.

If you want to go down the subscription path, you need to think of an app for a niche, targeted audience who will see great value in paying $10/month for your app.

3. NEXT STEPS

Stay tuned as I explore the app maker software route and write about the steps involved in making an app on it (and any success or failure along the way). Subscribe to be notified of when that comes out!

If you want to get started on learning how to make apps, here is a great course on how to make an app on Udemy:

Beginners – How To Create iPhone And iPad Apps – Zero Coding

How Much Can You Make on Airbnb?

You pay hundreds of dollars to stay in an Airbnb when you travel. Why can’t you also list on Airbnb and make passive income while you work full-time?

Well, if you already have a spare bedroom, there’s really no risk in listing it on Airbnb. And if you are thinking of buying an income property, at the end of the day, you will end up with equity in the property, so there isn’t really a risk in listing on Airbnb either.

But what if you have neither a spare bedroom nor the money to buy an income property, yet you still want to make passive income from short term rentals on Airbnb?

There is one way to make money on Airbnb without a spare room or income property.

You can lease an apartment, pay monthly rent to the landlord, and instead of living in it, you list the apartment on Airbnb.

But is it worth it? Does the income you earn from listing the apartment on Airbnb outweigh the monthly rent you pay to the landlord?

You’ll be surprised at the result of my research and analysis.

Airbnb | Short term rentals | Income property | Apartment rental | Air b&b

Cost of Setup – Don’t Ignore!

The first thing you should know is that even though you are not buying a property to start Airbnb, there is still a considerable upfront cost.

First, when you lease an apartment for the purpose of listing on Airbnb, there is security deposit (even if you get all of it back at the end of the lease, you need it upfront) and moving costs. Together, that’ll be around $1,500 for a 1-bedroom apartment in a metropolitan city.

Then, you have to factor in losing the first 2 weeks of rent, because you have to set up the apartment first after your lease starts before you can list it on Airbnb. Let’s say the rent is $2,000 for a 1-bedroom apartment in Los Angeles. That’s another $1,000 in upfront cost.

Finally, the cost of setup: furniture, kitchen tools, decoration, cleaning supplies, etc. will cost between $4,000 – $5,000. For example, a typical list (if you buy at Ikea rather than Pottery Barn) is:

Airbnb | Short term rentals | Income property | Apartment rental | Air b&b

All in, the total upfront cost will be ~$8,000.

Good News: Airbnb Price Per Night is Twice the Monthly Rent

The cost of setup may deter you from starting an Airbnb. But the good news is that the price per night can be three times the monthly rent. That means there is potential to make 100% return on your monthly investment?

My analysis of ~250 data points (by varying cities/neighborhoods in Greater LA) shows that on average, the Airbnb price per night is twice that of the monthly rent per day (i.e. monthly rent / 30 days):

Airbnb | Short term rentals | Income property | Apartment rental | Air b&b

*Notice that West Hollywood has an Airbnb price that is almost three times the daily cost of renting the apartment. We will come back to this later.

Twice is good but not good enough. It doesn’t mean you could make twice your investment from listing on Airbnb. The biggest factor is Airbnb occupancy rate.

Airbnb | Short term rentals | Income property | Apartment rental | Air b&b

Airbnb Occupancy Rate – Bad for Business!

As expected, the occupancy rate affects the income you can earn on Airbnb. Especially in the 10 neighborhoods within Greater Los Angeles that I analyzed, there is a lot of competition.

And even though neighborhoods like West Hollywood has a long-term apartment rental vacancy rate of 2%-3% (i.e. occupancy rate of 97%-98%), the Airbnb occupancy rate is only 65%, which is comparably lower. Or in Santa Monica where tourists flock to for vacation, the Airbnb occupancy rate is only 61%.

On average, the neighborhoods had an occupancy rate of 55%.

You can look up the occupancy rate of your neighborhood on insideairbnb.com.

airbnb occupancy rate in los angeles california

Putting It All Together: Airbnb is NOT Worth It

Putting together the ~250 data points in 10 neighborhoods in LA, the result is that the income earned on Airbnb is only marginally higher than the cost of monthly rent if you were to lease the apartment to start an Airbnb business.

The summary of the analysis below takes into account the pricing and the occupancy rate above as well as a 10% operating cost for Airbnb, which factors in a high turnover (cleaning fees and supplies, utilities, internet, etc).

how much can you make on airbnb

The income you can earn from Airbnb is only 1.1x higher than the cost of monthly rent. If you take into account the cost of setup, you will just break even. That means your return on investment will most likely be 0% – 5% per year. And that is only if your occupancy rate keeps up with the average in your neighborhood.

If you consider the risk of getting busted by your landlord for subletting your apartment on Airbnb when you’re not allowed to, I’d say, it’s not worth it. (If any of the readers have had success with this approach, please comment! I would love to hear your side of the story on how to make it successful.)

There is Hope: Where You CAN Be Profitable with Airbnb Business

As you can see in the result of my analysis above, West Hollywood beat the odds compared to the other 9 neighborhoods in LA. What is unique about WeHo that you can earn 1.6x income on Airbnb compared to the cost of renting the apartment?

If the neighborhood you are considering has these unique features that West Hollywood has, then you could potentially have a very profitable Airbnb business (i.e. short term rentals):

  1. Near a convention center or a hotel that holds a lot of big conferences
  2. Hotel vacancy rate in that neighborhood is very low at around 2-3%
  3. Central neighborhood that connects to several popular neighborhoods on the periphery
  4. Average Airbnb occupancy rate is relatively high (at least 60%) – you can look this up on insideairbnb.com
  5. Average nightly price on Airbnb is at least three times higher than the daily rent cost

If the neighborhood you are thinking of launching an Airbnb business doesn’t have the unique features above, it may be difficult to be profitable if you lease an apartment to do it.

Receive Airbnb Starter Checklist & Income Spreadsheet

If the neighborhood does check off all the features above and you are thinking of launching Airbnb, then I have a gift for you that you may find helpful. A complete checklist to start an Airbnb and a profit & loss spreadsheet that you can use to input your costs and income is on its way. Subscribe now to be notified when it becomes available so you can receive it for absolutely free.