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Starting A Side Business: Making Money From Blogging

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From time to time I get questions about blogging from friends and family members.   They know I've started a couple of blogs and made them somewhat successful, and they want to  know how they might go about setting up their own successful sites.

At this point I usually start talking to them about how much work it is to blog, how you have to constantly be writing content, promoting the site, networking and researching SEO.   After I've been talking to them about this for a few minutes usually their eyes start to glaze over, and they begin to realize that making a blog successful isn't an going to be an easy project.  Most of them ditch the idea before they even get started.  To me that's a big mistake because starting a blog, while it is a lot of hard work, can also be extremely rewarding – both monetarily and in other ways.

If You Treat Blogging As A Business, You Can Make Good Money

Once they've heard just how hard blogging can be, they often move on to the question of how I can afford to spend so much time doing something that is essentially just a hobby in their mind.   At this point I have to explain how I started blogging as a hobby, but after a year or so of constant effort I realized that it could be so much more.  Blogging has the potential to become a nice side income, and if you work especially hard and have a bit of luck – you can turn it into a full time income.  Because of that I started to treat my blogging more as a business.  I think without that added benefit of being able to make quite a bit of money from blogging, I may have stopped writing quite some time ago.

While I haven't matched my day job income yet from my blog, I am blessed to say that it has been enough to replace my wife's day job income so that she could stay home with our son that was born 5 months ago.   To me that's huge, having the peace of mind that this extra blogging income creates is priceless.

A Blog Has Almost No Startup Costs

One of the great things about launching a blog is that it has almost zero startup costs, but has the potential to make quite a bit of money.   What costs can you expect to incur right at the beginning?

  • Domain name:  You can usually find a domain name for anywhere from $7-10 a year.  That's dirt cheap.
  • Hosting:  You can find a cut rate hosting plan for about $5-10/month.  That's only a few cups of coffee!  I'm on a higher tier plan now with Media Temple, and that costs closer to $30/month.
  • WordPress: The standard for blogging software, the self hosted version of WordPress is actually a free product!
  • WordPress theme: You can find a ton of free themes to start with (which I recommend), but premium themes like Thesis, Genesis,  Catalyst or Headway will cost you anywhere from $70-165.

Those are the main things you'll need to pay for.   So for anywhere from $67-$200+/yr you can start your own money making business. That's not a bad deal!

I actually started another site last weekend. In about 1 hour I bought a domain name, added the domain to my hosting account, installed WordPress and the Thesis theme.  Now it's up and running and being indexed by Google!    Once you have done it a couple of times, setting up a new site is a breeze!

The Main Blog Costs Are Related To Your Free Time

To me the biggest cost that there is related to blogging is the free time you'll lose to writing content, promoting your site, getting backlinks, tweaking your site, networking, engaging in social media, etc.  There are endless tasks to perform with a blog, and if you don't enjoy it, you could burn out pretty quick.  For me I would probably have blogged as a hobby anyway, and doing it for money just made it all the more attractive.  I don't mind spending 20-30 hours a week on my sites because I actually enjoy the entire process.  For others it might be more of a chore. Make sure you go in with eyes wide open.

How To Make Money With A Blog?

Making money with a blog isn't easy, and it takes time.  In order to make real money, you'll need to start building up content, get plenty of backlinks by participating in carnivals and writing for article sites, guest posting and a variety of other things.

As a general rule, however, if you do everything the right way, you can probably expect to be making at least something by your 5th or 6th month.  My first site didn't take off until the 6th month, and at that point it's been a money maker ever since.  This site you're reading this post on started making money it's second month because I already had some contacts to sell advertising to from my other sites.

So what are some of the biggest sources of income for some of the bigger sites?

  • Google Adsense:  by far the biggest. to do well with adsense you have to write about the right topics though.  Check out other successful sites to see what they write about.  I suggest adding Adsense right away, better to have the ads there from the start, and possibly make some money!
  • CPM ads:  If you can find a premium ad network that will accept you – and if you have enough traffic, CPM ads can pay pretty well.
  • Direct sold banner ads:  If you can sell ad banners directly, it can do pretty well.  The key is finding people who want them.
  • Affiliate sites:  sites like shareasale, flexoffers.com, linkshare.com and a variety of credit card sites do pretty well for me as well. Promoting these works best with posts usually -reviews/etc.  Banners in the sidebars don't tend to do as well.
  • Your own info products: If you can come up with an ebook or other info product that people are willing to pay for, you'll have a nice source of recurring income.
  • Get paid to sites:  If you have a blog it's a good place to promote “get paid to” sites like cashcrate.com, swagbucks, ebates and others that will pay you for referrals.
  • Paid posting:  I have become a staff writer at a couple of places in exchange for payment for each article. Usually in the range of $10-75 /article depending upon how long you've been blogging and the quality of your work.
  • Use your blog as a launching pad to write a book:  I haven't done this, but I know of several bloggers who used their site as a means to write and publish a book.

What  it really comes down to is that your income opportunities are only as limited as your imagination!

Some Things To Remember About Blogging

I won't go in depth in this post as far as step by step instructions on starting a blog, but here are a few tips for things I've learned about blogging.

  • Less is sometimes more:  I've found that my adsense ads do better when i have fewer ad placements on a page. I put one or two ads in a well placed location, and it tends to do better than say 3 ads on the page.
  • Do your research:  take the time to do some research as to what the popular and newsworthy items of the day are. Write about those things because people are searching for them. Do your keyword research.
  • Content is king: having good content is key.  The more you write, the more content that you have that gets indexed by google – and the more chances you have for coming up in the search engines.
  • Do blog carnivals: participate in blog carnivals, they're free backlinks, and backlinks are like gold.
  • Don't expect huge money right away, it takes time:  I think it was 6 or more months before i made any real money.  Have patience, it will come.
  • Network with other bloggers and help each other:  Sometimes blogging may feel competitive, but actually it's more of a team challenge.  If you can cooperate, give each other links and promote each other's content -you all win.

So there's my brief intro into blogging as a business.  I'll probably be writing more about this in the coming weeks.  In the meantime, however, if you're interested in starting a blog, here's a comprehensive ebook on how to make money with a blog.

You can get  $5 off by using this coupon code for a limited time: som5

Have your own blogging tips, or questions that you'd like answered? Tell us your thoughts in the comments!

You May Need To Pay Estimated Taxes If You Make Side Income Blogging Or Via Other Avenues.

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I started blogging here on this site only a few months ago, but the site is already starting to generate some income.  While that's a wonderful thing, it also means that I need to start thinking about keeping track of my blog income and expenses for this site, in order to start paying taxes on the money I'm making.

If you're making enough income beyond your regular day job, you may need to start thinking about paying estimated taxes 4 times a year as well!

Today I want to look at who needs to pay estimated taxes, and how exactly it works.

Who Should Make Estimated Tax Payments?

In the U.S we have what you call a “pay as you go” type tax system – in other words you need to pay your taxes throughout the year, instead of paying one lump sum at the end of the year.

If you have a day job your taxes are already being withheld for you in the form of payroll tax withholding.  If you have it setup just right, your tax liability should be covered for the  year through withholdings. If you're off you could end up paying more than you owe (which is why so many people get refunds every year), or you could end up owing more at the end of the year.  I usually end up at this end of the spectrum, although I'm usually pretty close to not owing or being due a refund.

When you add in side jobs (or investment income) to the equation – or if you are otherwise self employed, you're probably going to need to think about making estimated tax payments throughout the year in order to cover your tax liabilities, and avoid penalties come tax time.

So how do you make sure that you don't have to pay penalties when the year comes to an end?  If you're only making a small amount of income you can meet tax requirements through increased tax withholding at your job.  Otherwise, you'll probably need to make estimated tax payments – or do a combination of increased withholding and estimated tax payments.  You'll want to research your own situation and figure out what's best for you.

Safe Harbor Requirements To Avoid Tax Penalties

In order to make sure you don't have to pay penalties at the end of the year, you must meet one of the safe harbor requirements at the end of the year.

  • Owe less than $1,000 for this year’s taxes.
  • Withhold 100% of last year’s tax liability.
  • Withhold 90% of this year’s tax liability.

To get started on the estimated tax process, just download tax form 1040-ES, and fill in the blanks to figure out approximately what your estimated tax payments should be for the coming year.  If your income isn't stable (as it isn't for most bloggers), you may have to make a bit of an educated guess.  But don't worry – that's why they have the safe harbor requirements, so you can avoid penalties if you’re off.

At our house we're going to withhold 100% of our last year’s tax liability to avoid any penalties.  We’re also saving up a bit of extra money for any extra tax we may owe at tax time.  We'll be saving it in a high yield savings account until tax time comes around.

When Are Estimated Tax Payments Due?

Estimated tax payments are due 4 times throughout the year.  They are due on:

  • April 15
  • June 15
  • September 15 (coming soon!)
  • January 15

Please remember that estimated tax payments are NOT due every 3 months, but are spaced unevenly throughout the year.   Because of that it can be easy to forget when they're due, and miss a payment.  Set up a reminder for yourself in google calendar or other software, so that you don't forget.

Where Do I Send My Estimated Tax Payment?

You hav a couple of different options to send in and pay your estimated taxes.

  • Mail your payment in: You can mail your payment in.  Figure out where to send your payment here.
  • Send your payment online:  The Electronic Federal Tax Payment System allows you to send your payment in online.   Keep in mind that you'll need to register in advance, and it WILL take you a while to receive your required PIN number via snail mail.

State Estimated Tax Payments Are Due As Well!

When paying estimated tax payments it can be easy to forget that they're due for both state and federal taxes – so don't forget to pay both!

Some of the things you'll be paying in estimated tax payments:

  • Federal estimated taxes
  • State estimated taxes (if your state has income tax)
  • Self-employment tax of 15.3% (the social security and medicare portion of your tax).

So remember, you're going to owe taxes on all that income you're earning online, and taxes take a nice big cut out of that money.  Even if you meet your safe harbor requirement, it can be easy to far underestimate how much you’ll need to pay your tax bill at the end of the year.

Don't get caught flat-footed.  Plan ahead and set your money aside in a high yield savings account, and have that money ready to go at the end of the year!

Do you pay estimated taxes on side income that you earn?  Are you just starting to do it this year? Tell us your thoughts on making estimated tax payments, or give us your tips for remembering how to pay at the right time!