Decide whether or not to stick with your blog when you’re just starting out
When first started blogging, I wasn’t too sure if I should stay on or give up.
Sure, I got some views but the point of starting up a blog was to make a bit of money on the side because I’ve got bills to pay.
My initial idea was to use a discounted cash flow model to value my blog. So, with an annual income of $3600, at a discount rate of 5%, and an annual growth rate of 2% for 5 years, that’s a valuation of $77,500.
Except could I even trust this figure?
My research and experience taught me that people are often overconfident in their prediction skills, and their predictions often fall flat. This is something the famous psychologist, Daniel Kahneman, advises us often.
So, I had to decide on different criteria about whether or not I should stick with my blogging startup.
This is the criteria.
1. Do readers have an incentive to even read your stuff?
I like reading financial blogs and news but I don’t have much interest in reading stock analysis pieces.
I’m probably too much of a value investor to care about getting ‘special’ financial insights. It doesn’t mean these authors don’t do a good job, it’s just not for me.
But, when I first started blogging, I tried to emulate those stock analysis authors that I don’t often read. You know what? No one read my articles.
Then, I pivoted my writing style from analysis to how-to articles with a bit of storytelling.
Instantly, my views jumped from nothing to something. That gave me some excitement.
I think the reason for this is that there are already many articles that provide company analysis but not enough articles that exactly explain how to do analysis.
So, what you need to do is figure out if your blog actually incentives people to read it.
You can do this by experimenting with writing various article types and checking your stats from these articles. You’ll need to write a lot and fine-tune your writing over time.
This is time-consuming and takes on average 1 year of blogging to achieve substantial income.
But, once you achieve it, your blog will be a cash cow because you’ll be raking in more money than you’ll be spending.
2. Can people easily copy your work?
One piece of advice you often get is to see what your competition is always doing. I read a few blogs but I’m not too sure who I admire.
My inspiration comes from books more than blogs. So, my writing tends to emulate the chapter of a book rather than blog pieces of other writers, or so I think anyway.
Over time this has paid off because my writing is unique to my style and I think readers see it. I don’t have a massive fan base but I have enough readers for consistent income.
To know if someone is copying your work, all you need to do is read the works of people in the same industry as you are.
You can even use writing AI tools to check for plagiarism as well if you want to go that far. However, there’ll be overlap, so you can’t necessarily jump on every writer.
The takeaway point is that cash cows do things differently from the competition, so if your writing style can easily be emulated then you don’t have a cash-generating blog on your hands.
3. Are you generating a profit?
I’m quite minimal at blogging. All I need is a phone and a platform and I’m all good.
But, there was a time when I paid for self-hosting, advertisements, and other overheads.
Despite all of the money being put into the blog, not even a dollar of revenue was made. This was a tremendous loss.
Nowadays, I don’t have this issue. I’ve found a good platform to write on and I don’t even have overhead ever since writing on Medium.
There are no special accounting skills to figure this out. Tally up how much you’re making in revenue in a month and minus it from any costs you have in the same month.
For example, if you make $50 a month and pay $5 for subscription fees, then that’s $45 a month in profit monthly. If you’re knowledgeable about accountancy, you might also factor in depreciation costs too.
The takeaway point here is that cash cows are always profitable businesses, you just need to make sure that your expenses don’t outweigh your income.
Conclusions: Why you should figure out if your blog is a cash cow?
Blogging without a purpose is good if you’re an altruistic person. I’m not.
I’ve got bills to pay, and for some reason, they seem to pile up every year.
It’s important to figure out if your blog is going to become a cash cow even before any real money is made because at the end of the day what’s the cost opportunity? Instead of blogging, you could be working as a consultant instead.
Anyway, use these tips to figure out if you want to keep on blogging or if it’s time to give up.
If you also have ideas on knowing if your blog is a cash cow, feel free to comment below and if you’re not a Medium member already consider joining up to read more articles.
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