The “Free” Business Model

You might have heard about people giving away products or services for free online and wondered how you make money from that business model.

It might go a couple of ways:

1. You could give away loads of information on your site – in the articles you write, for free. This is information you could charge money for – but, you don’t – you give it away for free.

2. You could offer some specific product or service for free that you could charge people for access to. (PDF, book, forum, video, training program, report)

Why would you want to give away something for free? Shouldn’t you always charge money for it? Not necessarily.

There are websites making a whole lot of money by giving away free information. Here’s why that is.

1. Free information is instantly available to whomever lands at your site. They don’t have to wait for it – or pay for it, it’s there and ready to consume.

2. You might be instantly cutting out your competitors that are all charging for the product/service. You may quickly become THE source everyone uses because everyone wants free instead of paying for it.

3. Free = Viral if the information is desired. People will pass free links to their online friends much more often and quicker than they would for something that will cost their friends money. Surfers love to help their friends and passing them links to a place they can get info for free – is a big help.

That’s the WHY of the Free Business Model. Now, what’s the “How”? As in, “How do I make money from it?”

Basically traffic comes first. Money comes later. If a website is able to amass traffic – a couple thousand people per day or more, then the website can make money from advertisements on the website. Their own or other companies advertisements work well when large amounts of visitors are arriving at their site.

The amount of money you can make from ads on your site depends on:

1. Numbers of people coming to your site.

2. The focus of your site. If your niche is tightly defined and there are advertisers that pay a lot per click you can do quite well off low level traffic.

Most businesses giving it all away for free are usually also selling something.

So, you can advertise on your site some products that you’ll charge money for. Or you can put Google Adsense, Textlink Ads, or charge other businesses to put their ads on your site because you have some decent traffic coming in every day – giving you a high pageview count.

One of the best things you can do when you have a free site is start an email list. You can start a list with Aweber.com – which is definitely one of the top two companies doing email lists online today.

Short and simply… You join Aweber. You create a form on their site – that you can add to your site – as a pop-up or as a small blurb that goes on your website somewhere people will see. Look at the checkbox on IncAnswsers – that’s my Aweber form section. I also have a popup that comes up sometimes – once per customer. If your IP address changes you’ll see it again.

You collect names and email addresses to go with the names. You create a newsletter or some other emails that you send out to those that join your list. If you focus on providing more free information and occasionally ask for friends on your list to buy something – some do. Over time your email list will become very important to your business.

Recently one guy I follow pretty closely, Jeremy Schoemaker, decided that instead of write a book and sell it he was going to create a 12 week course and just give all the information away for free instead. The way he’s monetizing this is that he gives away his affiliate link so I can link to his course… if you buy any of his products or services I’ll make a small commission off whatever it is. It’s a win-win-win. You win because you find his 12 week free course. I win because I get a commission. Jeremy wins because you’ve found his site and become an email list member if you decide to opt-in to the free 12 week course.

That’s what to do with a Free Business Model site to make money with it. If you have any questions, feel free to ask. Of course I can’t cover everything in one article – so, ask questions to clarify if this is something you’re considering.

- Vern

Photo credit: Flickr.com member, The Consumerist

Starting an EBusiness? Don’t Do This…

I accept small projects when it’s to my advantage and when I think I can do something for the entrepreneur. Recently I faced a tough call.

In this case it was a company I’ve worked with in the past that wanted me to optimize a site for Google that they had designed. The owner of this site wanted to try out his business idea.

I looked at the site and told my friend – it won’t work. The idea was lame. SUPER lame… and the site was not well designed. The idea was not well thought through. There was a need for a site like this – but nobody would pay for the information like this owner wanted. Basically he wanted someone to pay him $25.00 if they had a question they needed answered about Thailand.

Now, it’s difficult to find good information in Thailand but, it’s not $25.00 difficult. In Thailand $25.00 can almost buy you breakfast for a month.

Anyway. So, I told them what I thought. He said the guy really wants to try it and see what happens. He said the owner was committed to pay me $300 per month for 3 months and he wanted to try it and see some results and then would continue from there.

I said honestly, “In 3 months there will be little to no results on the SEO/Google side of things.”

They didn’t care – the guy wanted me to try… I faced a moral dilemma because realistically, logically there would be no gains in 3 months. Pagerank might go up to 1 or 2. The site would be spidered, there would be a few people going there but not many from Google or Yahoo.

I decided to do it, since I made it crystal clear that nothing would happen on the SEO side. What else could I do? I can’t turn away cash – I’m not at that point yet. I could turn away cash for something immoral, but for something stupid – what I could do? This wasn’t my client. My client was the company calling me to fix it. They needed my help.

Long story short. I did all I could with the $300 they gave me over the first month. Two days ago the company told me – Oh, the owner isn’t putting any more money into this idea – he got no sales over this month at all.

Ha! Really? Was someone expecting sales within a month?

Wow. So, this is how not to start a business or even test an idea.

An idea needs time to get going. I have websites that have been germinating for 8 months now. It’s like they’re flowers waiting to sprout… they’re waiting for Spring… Internet Spring – which means – about 1 year.

Recently I saw big jumps in traffic to sites I’ve had for 2 years and 3 years. Nice jumps.

What I’m saying is… if you’re not going to put a ton of money into a site or idea to find out if it really works, then you MUST let it cook for a LONG TIME.

It’s one or the other. And, if you’re slow-cooking you need to be adding content, and optimizing the site over that year or two years.

The days of big success in less than 6 months are GONE for those without big cash reserves to finance it. Literally it’s not going to happen unless you win the lotto and you hit virally and blast off for pluto (which is not a planet anymore if you didn’t hear… lol).

There are so many people that have ideas and want to try them online.

There are so many people that don’t know HOW to go about it.

There are so many people that can use the EBusiness PRIMER 34 course here to learn everything they need to know to test their new business or idea and see if it’s going to work for them.

In this case the owner spent $300 on me + markup by the company + company cost to develop the site + copywriting + hosting + banner ads at other popular sites. He probably through away $1,000.

Instead, he could have spent much less than that on the EBusiness PRIMER 34 course and been able to do his own testing on many ideas from then on.

Oh wait, he blew $1,000. He could also buy the EBusiness PRO subscription for himself and both of these elearning courses for 2 of his best friends – all for about $1,000.

Don’t do what this guy did….

Starting a Business During the Recession? (Links)

Here are some articles about starting a business during this recession that you might find interesting. There are many people just beginning a new business during this time. Some think there are advantages to starting a new business during a recession or a period of slow growth.

Articles about starting a new business during the recession:

Dave Saunders talks about “How Smart People Protect Themselves During a Recession” and gives some options for keeping safe as well as growing your business during recession.

From the business section of the Times Online in the UK (our friends in England) comes “Why to Start a Business During a Recession“. Despite them being separated from the USA by the Atlantic Ocean their ideas can still be relevant to US business owners. American business owners need to read whatever you can get your hands on – including international business news like this. Don’t miss this excellent article from the BBC.

Should you change your business focus during a recession? This is a short article with good points to follow during a recession.

3 main points of this article:

• Plan your future market strategy
• When business contracts, go broader and deeper
• Get in the business networking mix

Starting an eBusiness FAQ

Inc. Answers is comprised of 3 major sections:

1. Starting an eBusiness (link to main pages for each of these)
2. eBusiness Incorporation
3. eBusiness Development

This page will list some frequently asked questions about starting a new e-business and provide helpful resources for starting an ebusiness. This page is changing frequently as we discover new questions and develop answers that will help visitors develop their business and grow their business to the limits.

Browse questions/answers below…