Diversifying Your Business and Income

This part of my update is going to get a bit more personal.

I’m going to get really real and share both some information about my personal income and also my thoughts—and feelings—about how much I earn.

Whew.

Here we go.

As I mentioned in my earlier post, Optimist was not built to scale.

When I started Optimist as a first-time founder, I didn’t have a 5- or 10-year vision in my head. I didn’t imagine becoming fabulously wealthy. I never wrote down a clear exit strategy.

I was just building.

At the time, I had never even earned six figures and reaching that level of income seemed like a plenty-lofty goal. I certainly had no ambitions to make millions of dollars.

And we built something cool and amazing—a successful business that takes less and less of my time and provides a steady income for my wife and me.

But it’s important to put this in context.

We built an airplane. It flies and it works.

But it’s not a rocket ship. It will never go to outer space.

I will never become a billionaire from running Optimist.

I will never make a $1 million salary.

Looking back now, if I wanted to build a business to maximize my personal wealth or position for a future acquisition, we would need an entirely different business structure.

We chose a different path.

We chose not to prioritize profit, but instead to focus on quality of life for the team and me.

Optimist is a lifestyle business.

Keep in mind that this is according to design. Our financial model was built to cover costs, pay out a “reasonable” salary, and distribute most additional earnings to the team in the form of profit share.

I still believe in this.

I’m fortunate and happy that Optimist affords me a comfortable six-figure income, tons of freedom/flexibility, and work that I almost always enjoy. I feel great knowing that I am helping to provide an above-average work experience for dozens of people on our team; helping them buy homes, make investments, start or grow their families, save for retirement, and also have a low-stress, flexible work life.

Money has never been a primary motivator for me.

If I’m being really honest, what motivates me is the vision, the challenge of starting something new—the hunt.

It’s the same motivation that led me to start Optimist.

Before this, I was working as a freelancer with a steady roster of clients. I could have easily focused on stabilizing my work and maintained a perfectly good life doing freelance work and earning decent money.

But I was bored.

By the time I hit this comfortable place, I knew I wouldn’t be happy just treading water.

While I am an agency owner, a content marketer, and a writer, I am—perhaps first and foremost—an entrepreneur.

I like starting businesses.

I like building things.

The most exciting thing for me is not counting the money in my bank account—it’s starting stuff. Coming up with ideas, architecting solutions, and then creating a team that can execute on the vision. This is where I find joy.

So, as I look toward 2022, my goals are not entirely focused on building Optimist or growing our revenue.

My biggest goal for 2022 is to return to my roots.

I want to start and build things again.

That means making time for things outside of Optimist. It means keeping enough in the tank to do the things that fill me up.

Ultimately, my goal is for Optimist to become one business among many.

This has driven a lot of decisions that I’ve made in the business itself. Looking for ways to better scale our team, looking for ways to work “on” the business rather than in it—in part, these were selfish goals that would position me to reach my personal goals.

So that’s what this part of the update is about.

Making small bets

You’re all entrepreneurs.

So you know that starting and growing a business is challenging work.

And it can be all-consuming. Many entrepreneurs spend their entire lives starting, building, growing, and running a single business. They’re perfectly happy doing this because it fulfills them (or they just get stuck doing it.)

But this isn’t what I want.

As I just shared above, the chase of entrepreneurship is where I get the most joy.

I’m not allergic to day-to-day operations and getting my hands dirty. But it’s not the most fulfilling part to me.

So it’s obvious to me that I don’t want to go from spending 100% of my time on one business to splitting 100% of my time between two businesses. I don’t want to build a second company that will be just as all-consuming of my time and energy as Optimist has been over the last few years.

I want to start, launch, and build companies that can operate mostly without my day-to-day involvement. I want to maintain free time to start and build more companies in the future.

I want to make small bets.

As I shared in my post about lowering the stakes, I think it’s better—more sustainable, less stressful—to diversify my income and my work rather than concentrate on one or two big bets.

To me, this means creating a portfolio of several small businesses.

Likely, none of these will be billion-dollar enterprises.

But I also don’t want them to be fledgling non-businesses or simple side hustles that aren’t worth the time and effort it takes to make them work.

I’m setting a goal for myself to create some accountability.

I’d like to generate at least $100k in personal income in 2022 from sources other than Optimist’s core business (content marketing).

Since we’re now 2 months into the year, I’ve already made some progress toward this goal. I currently have 4 main business opportunities that I’m working on. Most of them are adjacent to the work we do at Optimist, but will ultimately become their own entities.

Here’s what’s in the works.

Juice: The first Optimist spin-out agency

One thing that I feel fortunate about is that many of our goals within Optimist—productizing our services and repositioning the business—actually open up opportunities for me as an entrepreneur.

For every type of work that Optimist will no longer offer, there’s demand waiting to be filled.

Each of those services could be turned into their own standalone business.

The key here is choosing the services that can be most easily turned into a highly-productized service business—something that won’t lock me into a full-time job to keep it running.

We are already in the process of launching a new specialized agency.

It’s called Juice.

It will specialize in specific linkbuilding strategies that Optimist previously offered in-house but is no longer focused on executing.

Best of all, Optimist clients already need these services—so it’s a simple cross-sell that means we have revenue on day one.

I’ve spent about 3 months architecting the basics of the company:

• Creating an operating system for scalable linkbuilding
• Documenting and creating workflows
• Building and adjusting systems for the team to use
• Vetting and hiring for key roles

Learning a lot from my experience at Optimist, this time around I focused heavily on removing myself from the equation on day one. I built systems that could be operated and maintained by competent people without my input or involvement.

Again, this is the value of perspective.

I’m starting Juice from a completely different place than where I was when I started Optimist.

I’m thinking long-term about the growth and stability of the business—about how to make it scale effectively without taking up too much of my own time.

Now we’re on the cusp of an official launch and things feel much different.

Rather than hunkering down in the storm, I feel like I’m looking down from a birds-eye view, seeing and orchestrating all of the moving pieces and acting more like an entrepreneur than an employee of my own company.

I think Juice will generate $30-50k in income in 2022.

Formal partnerships and referral commissions

As an entrepreneur, you sometimes have ideas or opportunities that keep constantly getting pushed aside—even if you know they have huge potential.

For me this has been referrals.

Optimist receives about 10 inbound inquiries per month from prospective clients. And every few weeks we receive a referral from a past or current client.

But Optimist only works with 15-20 clients at a time and we generally only onboard a few clients each quarter.

This means the vast majority of those leads end up finding another solution, hiring another agency, or changing course entirely.

From our perspective, they just vanish.

But, obviously, they’re looking for help—they’ve made the effort to contact us. And, presumably, they have some kind of a budget to invest in marketing.

There’s a lot of money on the table here.

If we were able to connect all of these leads with a suitable partner and had a commission agreement in place, this would be a significant revenue stream.

Doing some quick napkin math, I’d estimate that there is at least $100k/year in revenue that could be generated from referrals. And, of course, it’s the best kind of revenue—nearly pure profit!

So, 2022 is the year that I want to finally make this a reality.

I’ve already brought someone onboard to help with Biz Dev and Partnerships. Now we just need to build the operations to make it a reality.

Again, I’ve focused on creating a system and putting the right person into the role—then handing it off to them.

This is a work in progress, but we’ve already made a lot of progress and have a good rhythm heading into Q2.

This has the double benefit of freeing up some additional time for me, since this person will now both be playing the role of Biz Dev for Optimist (fielding ~8-10 sales calls per month) and handling referrals and partnerships.

Account for the time and commission paid for this role, I think I can generate $30-40k from referrals in 2022.

Monetizing our community

A few years ago, we launched a digital community focused on content marketing and SEO called Top of the Funnel.

Originally, we did this mostly as a way to bolster the core Optimist business:

• Generate leads
• Grow our talent network
• Open up potential future revenue streams

Since then, I’ve continued to invest a few hours each week in creating content for the community, driving engagement, and growing it.

We now have nearly 1,500 members and a pretty active group of marketers, freelancers, and agency owners.

But this community is a pure cost center for us.

To date, we have not generated a single dollar of revenue from the community directly. Nor have we truly made an effort to launch any other new revenue streams from inside the group. As far as I know, we haven’t even signed a client for Optimist based on the community itself.

So, again, 2022 is the year I want to change that.

To start, I made an investment in bringing someone else in to help with day-to-day management of the community itself.

Obviously, this converts some of my time investment into a monetary investment.

Meaning, now we’re not only not generating revenue—we’re in the red each month.

But we have some ideas and plans in the works.

My current goal is to hit breakeven by the end of Q1—about $1,000 per month in revenue would cover the costs of our community manager.

By the end of the year, I’d like to be consistently profitable. Honestly, I view this more as a slow burn. I’m not going to crank the dial to 11 and try to squeeze as much as I can from the community. It’s not a cash grab and I don’t want to burn the place down trying to make money.

I think that Top of the Funnel can generate about $10-15k this year.

Drinking my own Kool-Aid

Finally, I have another potential business that’s been on a slow simmer for some years.

Affiliate sites.

Like many people in content marketing and SEO, I know there is a huge opportunity to apply my skills and knowledge to build a network of money-making websites.

I started this process about three years ago when I launched 3 small sites.

Since then, they’ve gone mostly neglected as I’ve just been too busy to spend a lot of time with them.

Even so, these fledgling properties have gained a little traction from the initial investment I made. Right now, they generate a few hundred dollars a month with almost no effort on my part.

In 2022, I want to carve out time to really push.

Seeing the progress, I’m really optimistic that these sites could turn into a pretty successful business. Most of them have already started to rank for a few high-dollar keywords and investing in more content and linkbuilding work should pour some gasoline on the fire.

To make this happen, I’ll need to focus on operations and building out systems and processes.

Just like with the other businesses, I want to establish a team that can run the sites without a lot of work on my part.

In terms of potential revenue, I want to be conservative here. But I still think these sites could generate $20-30k in 2022.

All told, I think I have plenty in the works to reach my income goal for 2022.

But, most importantly, I'm excited.

I’m excited to start from zero (or near zero) and build things once again.

We often talk about entrepreneurship as a path to freedom. We talk about being your own boss, owning your own time, and setting your own schedule.

But to what end?

Certainly, most of us aren’t just trying to take control so we can do nothing with our time. I struggled with this for a while. But what I realized is that I truly enjoy coming up with ideas and building something from nothing. So my goal is not to just own my time—it’s to spend as much time as possible doing the things that make me feel fulfilled.

I hope you all find the same.