I used to believe that the best way to be an online entrepreneur was to have a portfolio of 5-7 different online businesses. Each business would be responsible for a portion of your income and there would be some level of protection if any one of those businesses took a nose dive. This is the model that I’ve followed until about 18 months ago. I like the idea of diversification, so I’ve pursued a lot of crazy online business ideas in the last 10 years in order to create new income streams. Many of the ideas failed miserably, a handful of them had moderate success and Analyst Ratings Network skyrocketed.
The Danger of Side Projects
The wild success of Analyst Ratings Network left me with a conundrum. I could continue to start new projects in hopes of creating new income streams or I could double down on the one business that was growing by leaps and bounds. For a while, I continued to create new businesses from scratch using the skills I had picked up from previous businesses. When Analyst Ratings Network was first taking off and hit five-figures in monthly revenue, I was contemplating starting a WordPress consulting business that might have made, at most, $2,000 per month. While I built out the WordPress business called WP Mechanic (which never really got above $1,000 per month in revenue), I was ignoring Analyst Ratings Network, my business’s best growth opportunity. What kind of sense does that make?
Eventually, I got my head together and realized that all of the side projects I was working on (Matthew Paulson Consulting, Lightning Releases, WP Mechanic, Video County, etc.) were distractions that were preventing my company from growing. At one point, I had more than 60 different sites in my web-hosting account. It was hard to give up my side projects, because each and every one of them were my baby at one point or another. I had big dreams for all of my side projects, but those dreams would never be realized under my ownership because of the limited time I had to work on them. Complicating matters further, some of the business units I ran had active clients that would have been very disappointed if those businesses just went away.
Putting My Side-Businesses Up for Adoption
I decided that the best approach was to give away or sell my side projects. I effectively gave them up for adoption to other companies that could care for them and grow them in ways I didn’t have time to do. The service businesses that clients relied on (WP Mechanic, Lightning Releases, Matthew Paulson Consulting) would continue on under new ownership to keep existing clients happy. Since these businesses are still operating, I have the privilege of watching them grow and flourish (but I don’t have to worry about them anymore!).
The Adoption Process
I migrated my web consulting clients over to Media One, a local web agency that would serve them well. While some of my clients were sad to hear I wouldn’t be working with them anymore, they were happy to know that they were being handed off to someone I recommend and endorse. I sold Lightning Releases to a couple of other entrepreneurs that can focus on and grow the business. Since my name isn’t tightly associated with the brand of Lightning Releases, it was easy to migrate the business to their ownership with a minimal amount of pain. I sold the smallest of my service businesses, WP Mechanic, on Flippa. I also sold and gave away a handful of content sites I had built years ago to people that I met at Rhodium Weekend. There were only a couple of sites that didn’t generate any money that I ended up shutting down. I’m down to about 15 websites in my hosting account now.
I’ve sold or shut down four distinct business units that were part of American Consumer News, LLC in the last 12 months. Yet, American Consumer News, LLC’s revenue continues to grow because I’m giving my full time and attention to my most successful business, Analyst Ratings Network. While it’s only been a couple of months since I sold Lightning Releases, I’ve already replaced that income by moving ads around, improving my sales funnel, changing prices and making a few product improvements.
Optimize What’s Working, Shutdown What’s Not
If you have something that’s working, focus on it and optimize it. Do whatever you can to improve your numbers on a regular basis through marketing initiatives and conversion optimization. The results will compound exponentially over time. If you make 5 improvements that improve your sales funnel by 20% each, it’s not a 100% increase, it’s actually a 250% increase (1.2^5).
If you run a business that makes $100,000 per month and a business that makes $10,000 per month, it only makes sense to put all of your focus into optimizing the larger business. You’d much rather see a 250% increase on $100,000 than you would $10,000. Arguably, keeping the $10,000 per month business is costing you money because it’s preventing you from growing your larger business.
Focus on what’s working, give up what’s not working.