I recently received an email from a reader with this question:
I am thinking of running a website in order to generate income and quit the rat race; can you tell me from your personal experience, is it a wise decision?
There are a few reasons why this question bothers me:
- “thinking of running a website” doesn’t sound very confident and is indicative of the fact that you probably don’t have one yet.
- “quit the rat race” sounds more like you are fed up of your day job - but it doesn’t show any love for developing (or maintaining) websites. In that case you should probably look for all possible alternate sources of income (for example, selling stuff on eBay, working at a different job, etc.), don’t just stick to starting a website.
- Many people mislead themselves into believing that blogs/websites can make a ton of money without requiring a lot of work. I am getting the vibes that the author of this question perhaps belongs to that category. A general observation is that most people have a tendency to grossly underestimate the efforts that go into starting and maintaining a good website.
For a moment let us assume that the question was asked in great earnestness and none of the above reasons are valid - that sort of puts us in position where we can actually start discussing the issue.
Let me list some facts/issues to be considered before you even start thinking about whether it’s wise or unwise to quit your day job.
- Websites don’t make money instantly. Generally, the income from a website depends on it’s popularity and popularity does not come overnight. People need to trust (or enjoy) your content (if you are blogging) or your product (if you are selling a product) before you start becoming popular and that takes time and a lot of efforts.
- With all your sincere efforts, dedication (before and after launching your website) and average growth in popularity, it may take anywhere between several months to a couple of years before you start making even nominal amounts of money. By “nominal” amounts, I mean a few hundred dollars a month.
- In most cases, websites generate incomes that are proportional to the number of visitors and hence are generally at Google’s mercy (contextual pay-per-click ads like Google AdSense). Such type of income is not “guaranteed”. One unfavorable tweak in Google’s search algorithm and a significant portion of your income can vanish in thin air overnight. You need to acknowledge this and chalk out contingency plans for such situations. You need to think about how to diversify your income in order to minimize the pain in such cases. For example, you could probably sell a service or a product - or do something else that doesn’t depend too much on search engine results.
- You have to take care of your own retirement benefits and health insurance and you don’t get any paid holidays. Obviously, your website income needs to exceed your day job income if you are thinking of quiting the day job.
- There are many things beyond your control that can screw up your website (and hence your income). For example, your website hosting company might kill your website for a technical reason, you could screw it up while editing stuff, or someone can hack into it ~ again you need to think of backup plans for all such situations before you start relying on your website income.
Now, let us look at some specific issues.
- First ask yourself: exactly what amount of website income am I looking to generate? If you are earning $100,000 a year and want to replace that with your website income, all I have to say is “good luck to you sir (add a chuckle if you want)”. It’s not that people don’t earn $100,000 through websites - it’s that it doesn’t happen very often and takes enormous amounts of professional efforts (and probably a lot of leverage) to get there.
- By the way, the median household income in US is about $46,000. Assuming that your household makes median income and that you contribute half of it (and your spouse contributes the other half), you are still looking at $23,000 a year just to match your day job income (read point #4 above). Approach your website ambitions with these numbers in mind - if you are planning on quitting your day job.
- For higher income generation (of the order of $10,000~$15,000/yr or more), you need to look beyond blogging. You will probably need some brilliant new website idea for a service or a product that people are going to like. In this case, you should be handling your ideas in a highly professional manner; treat it like a serious startup company instead of an amateur website. The planning an coordination in such an effort might be more intensive than an average day job - so quitting your day job might be the only way to pursue such a venture. However, you got to have a high level of confidence in your product/service and a strong support (in terms of man power and money) to attempt something like this.
- For lower income generation (few thousand dollars a year), you could probably start and maintain a very good blog. Focus on generating good content - this is the world’s most cliched statement ever, but it makes sense. Contradictory as it may seem, you should stop blogging for money if you want to make money. Blog for generating good content if you want to make serious money. You should also keep in mind that even with great content, it is not guaranteed that a good blog will earn a lot of money - it depends on how successfully you monetize a good blog (interestingly, it is guaranteed that bad blogs will never earn good money).
- Believe me, blogging for a few thousand dollars a year is a very tall order (although very much achievable) and will not come without persistent hard work and great content. If you follow this approach, the safest thing to do is keep your day job and blog alongside; wait for a couple of years and see where things are heading - if you have not made much headway with your blog income till that point - quitting your day job is probably not going to work for you.
- By the way, don’t get too optimistic after reading about extremely high income numbers from Google AdSense or other advertising programs, unless they come from a popular and trusted blog - there is a general tendency to showoff inflated advertising revenue numbers.
So, finally, is it wise to quit your day job and depend on your website for income?
If you are an average person, just looking for a break from the boring day job routine, my honest answer is - No, it’s not a wise thing to do. You can work hard on a website and really make a lot of progress in a few years, but till that time don’t even think of leaving your day job.
If you are really passionate about blogging or love working with websites or have a brilliant idea for a product (or a service), then you probably have a better chance at making it big sooner - but even in this case, make sure you consider all the issues raised above before you call it quits.
The wisest thing you can do is to make an informed and well calculated decision (either for or against your day job), and work hard and excel at whatever you ultimately decide to do.
To end this, I will once again make the message very clear - it is foolish to assume that you can make a ton of money just by creating a website, without putting in a lot of hard work and dedication into it.
Although, in this write-up, my thoughts were specifically directed towards someone wanting to start a website to make quick bucks, you could easily generalize them to any other entrepreneurial foray. There is no such thing as easy money.
Feel free to share any additional comments you may have on this issue.