Pros and Cons of Having Additional Niche Sites in Your Hip Pocket (so to speak)

I like publishing bigger sites with huge growth potential.  In fact, I LOVE it.

There are pros and cons to my preference for building up large sites, as with anything.

I own a few such sites (one very big and established, others less so).

Instead of singing the praises of my chosen approach, I’m going to point out a pitfall, and it has to do with cashing in.

One exciting aspect of publishing websites or building any business is the exit money, as in selling it and taking the cash.

If you’re just starting out, you’re probably not thinking about that, but if you’re making more than $1,000 per month, I bet you get excited thinking about selling your site.  A $1,000/mo. site can fetch up to $20,000 or more.  That’s good coin.

Or maybe you think about growing it to $20,000 per month and selling for mid 6 figures or higher.

Focusing on growing one site into a behemoth for the big payday is a sound strategy. It’s one I pursue.

Here’s the problem

When you sell, you’re left with no more income.  You start over.  Sure, you get a nice lump sum of cash, but you must start over.  As an aside, if/when you do sell, don’t forget about setting money aside for taxes… just ask these celebrities who “forgot” about taxes.

I don’t have to tell you starting a new niche site from scratch is tough.  You tend to forget about a lot of the hard work you put in after the fact.  It’s kind of like nostalgia – we sugarcoat personal memories or perceptions of different eras.

What can you do about this?

I’m not exactly advocating you do what I’m about to tell you, but for people who have some extra money, it’s something to consider.

In fact, I’m not sure I’m going to do this, but I find the model very enticing.

It’s the website flipper model

The Website Flipping Model

I don’t mean you build a site and sell it for a couple of hundred dollars with no traffic or revenue.

What I mean is you slowly grow a site to a few hundred or few thousand per month and sell it.  In fact, what you want to do is grow several at one time on the side of your main site.

I’m not saying this is easy or even a smart idea.

But if you’re properly set up, even if you have one main bread and butter site, it might not be a bad idea to start aging and slowly growing a couple of others.

Even if you never get them earning all that much for a couple of years, if/when you sell your bread and butter site, you have a site or two or three that have some authority and with some focus can grow quickly.  They’re past the “Google incubation” period so to speak.

Take the flipping concept further

If you’re very well funded or work a full time job and have extra bucks for investment, you could launch and finance 10 to 20 sites.  Slowly grow them to $1,000 or more per month and start selling small batches at a time. Take the proceeds and build more.

In time you end up with a fleet of sites, from which you sell one or some every few months for some nice cash flow which  you use to finance more sites.

What I like about the flipping model

1. Large influx of cash without selling the farm:  You focus on your bread and butter site… the potential monster yet have some smaller assets that can be sold for cash along the way.  Wouldn’t it be nice to get ,000 to invest into content and/or links?  It always is.

2. Avoid starting from scratch when you sell your bread and butter site:  Having one half decent site on the sideis nice to have when you sell your bread and butter site so you can get it growing faster than starting from scratch.

3. My favorite reason for doing this is you leverage “time”:  What do I mean by leverage time?  Even if you publish 500 articles instantly on a new site, it takes time for traffic to materialize.  If you hammer those 500 articles with 5 links each, it still takes time.  It’s a waiting game to start earning.

Moreover, established big sites only grow so fast no matter how hard you try.  Ranking new content usually takes time.  Time Time Time.

By launching a few additional small sites and seeding them with some good content, you let time do its thing until they’re ready to start growing faster.

4. Revenue diversification:  It never hurts being a little diversified.

5. Backlinks:  I don’t know if I’d ever use my other sites as a link source for my other sites, but if you’re a PBN advocate, it’s an option to leverage your additional sites.

6. Leverage guest post relationships:  This is another very compelling reason for me.  If you accept guest posts on your bread and butter site, you probably have a lot of people interested in guest posting.  For those that submit a great article, you have an immediate source of free content for your other sites.  Just email them saying, “hey, I have some other excellent sites you can guest post on if you like”.

They’ll love it because it’s an easy link (the worst part of guest posting is outreach).  You could, theoretically, build out additional sites for little to no cost with guest post content… just be sure you’re demanding about quality of those guest posts.

7. Learn more about what works and what doesn’t work:  If you built multiple sites, you will have failures.  You will learn from those failures.  You will also have some success and learn from that success.  The more you learn, the better you will get at launching and building profitable sites.

8.  Leverage your fixed costs:  Most hosting plans allow more than one website.  Chances are you use various software, themes, plugins etc.  For subsequent websites, you don’t incur any additional fixed costs because you’re already paying for this stuff.

9. Maintain premium ad network relationships:  There are some ad networks that require a fairly high number of page views per month.  It can range from 25,000 to 1 million.  If you want to sell your big site, if at all possible, it’s nice to have a second site with sufficient monthly page views to continue with your premium ad network if you’re using one.

What I don’t like about the multi-site model

1. Slows growth of main site:  Anything that distracts you from growing your main site is arguably a bad idea because it slows growth and is a distraction.  Even if you outsource a lot of the work, you need to still pay attention to it.

2. Dilutes resources:  Like most of us, you only have so much money to invest into websites.  Every website you launch sucks up cash in the beginning.  If you spread yourself too thing cash-wise, you may shortchange your bread and butter site.

3. Go crazy and burn out:  I love my work and I work hard, but there are limits.  I maintain pretty regular hours and am not prepared to work beyond my usual hours most weeks of the year.  I enjoy my free time and family during evenings, weekends, statutory holidays and several weeks of vacation every year.

If you’re maxed out on time with one site, but think “I can work more hours to build a second site” you might want to think twice.  Sure, when starting out with a job, you have no choice but to do this stuff nights and weekends (I did that for 2 years), but you don’t want to maintain that pace for the rest of your life… at least I don’t.

Let’s crunch some website flipping business numbers

I’m going to make assumptions here.  I strive to be conservative, but assumptions can be wrong.

The following is a simple analysis of the investment and payoff of a niche site you could potentially build on the side.

• Goal:  $2,000 per month end of year 2 with a sale at end of year 3.
• Size:  120 articles (excellent articles)
• How long:  3 years
• Average cost per article:   (I’m assuming you can subsidize some of the content with guest content)
• Content cost:  120 x  = ,200
• Graphics:  $10 per article:  $1,200
• Backlink cost:  100 links at $100 per link = $10,000 (I’m assuming you do the outreach for 50% of the links and  fully outsource the balance.  You’d have to adjust this cost depending on your level of involvement).
• Additional misc. costs:  $2,000
• Total investment over 3 years:  $20,400 (keep in mind pretty much all if is outsourced)
• Net income:
  • Year 1: $0
  • Year 2: Average $750/mo. = $9,000
  • Year 3: Assume hit goal of $2K per month = $24,000
• Net income after 3 years:  $33,000
• Website value:  $2,000/mo. x 20 multiple = $40,000

Net profit when sell:  $73,000* – $20,400 = $52,600

*Arrived at this figure by adding total site net income over 3 years ($33,000) and sale price of $40,000.

Obviously the above example would be a big success.  Not all sites will do that well, but some could do better.

Here’s a case study published on this site that pretty much echoes the above scenario so it’s not beyond the realm of possibility.

Another thing to note, if 1/4 of content was guest posts, an average of per piece of content is not out of the question.  That means other than keyword research and formatting content, the entire thing is outsourced.

Should you build and flip websites?

I want to be clear that you need to very carefully assess your situation before pursuing the multi-site model.

These days you can’t expect a low quality 10 page site to ever make money.  If you want a new site to make money, it will need great content and links.  Quality all the way which takes time and money.

While I publish a few sites, I’m not opening the floodgates by publishing 10 or more.  I have a small handful, and even then some are neglected more than they should be and I have a large team of VA’s.

Here’s when it’s possibly feasible:

You have plenty of extra cash:  Whether it’s due to having a job or successful online business, you treat the additional sites as investments for a future payout.

You have additional time:  I’m not talking about cutting your sleep down to 4 hours per night.  I’m talking about you have plenty of spare time and think it’s fun.

Your bread and butter site runs itself so you have time and money:  This is a great position to be in.  You have a successful niche site that runs itself perhaps due to a team in place and so you have funds and time to put into additional sites.

Why am I writing about this stuff if I’m not doing it full tilt?

I’m writing about it because I find it interesting, particularly the angle from leveraging free guest posting connections into free content for other sites.  That to me is very attractive and actually makes the concept economically viable assuming you have the time to vet all that content.

I also find it’s a way to leverage the issue of the time factor in growing sites.  We can’t speed up time, but we can leverage time by “incubating” multiple assets that grow in value over time.

Please, I’m not suggesting you go out and register 10 domains and try growing 10 sites.  This is a difficult strategy to pull off successfully.  I’m not sure I could handle 10 sites or anything close to that number.

But for the person in the right situation, this is a model that could work very, very well.