My wife’s grandmother thinks I’m a drug dealer.

Well, she did. I don’t know what she thinks now. She comes from a time and place (back in Russia) where the very concept of what I do for a living was completely unheard of. When she came and visited us a couple years back, she asked my wife if I was into something shady. From her viewpoint, I sat there and pressed buttons on some strange machine (my computer), and yet somehow our bills were paid and my wife wasn’t working.

My wife’s grandmother has since passed away (God bless her). She has one grandmother left, and who knows what she thinks it is that I do.

But, it puts things in perspective. What I do for a living is such a strange concept to most people, whether they are from overseas or live right here in my own neighborhood. And, I guess that’s OK. It is what it is. I love what I do. I’m lucky to be able to do it. And I enjoy helping others do the same.

2010 was a successful year for me. My family is doing well and we’re happy. And we’re looking ahead to a different (and better) kind of year in 2011.

In this post, I want to share some parting lessons from 2010, some thoughts on 2011, and (of course) those income figures that everybody seems so interested in.

2010 Started With a Bang

… and that bang was the launch of Blog Masters Club. Other than this last launch, the prior time I launched was January of 2010. So, I hit the ground running and the launch did pretty well for me. Then, a double whammy….

The birth of my son, Nathan. And with him came new joys as well as new stresses. I love watching the little guy grow up, and watching him interact with our daughter. On the other hand, it was some added stress for me personally. I now had 2 kids and I was the sole breadwinner for our family. I was making it work, of course, but it is pressure. Plus, there is all the noise that goes with working from home with 2 loud children (love ‘em to death, but they are LOUD).

It is always a tad interesting when I talk with some of my friends in this industry. Most of them don’t have children. Life is simpler when you don’t have children. I don’t live the jet-set lifestyle, I don’t travel all over the world, I don’t really do most of the things that people often associate with online success. Instead, I’m a father. And in the long run, it is far more fulfilling that way.

Also accomplished in 2010 was a re-design of PCMech as well as 3DayMoney. I began working with a new designer, Shawn, who has been awesome to work with. We also went to town on re-designing the Blog Masters Club, and you guys just got to see that handiwork in the launch that just ended. A lot of work and prep time went into that whole thing, and, of course, it was all done with long-term use in mind since I’m not closing Blog Masters down this time.

So, some things happened and it was a packed year. There were, however, some challenges and some things I intend to do better…

My Challenges in 2010

One might not have noticed from the outside, but internally, I felt like I hit a little bit of a wall in 2010. As you’ll see below, my income for the year was up a bit from the prior year, but not by much. What it shows me is that my business didn’t really GROW in 2010. It just kinda maintained the status quo.

And it isn’t as if the status quo sucks. But, the Internet is a fast-changing thing, and if you’re not growing, you’re actually shrinking. That’s just reality.

The big lessons I take away from 2010 are:

• I need to be more active when it comes to creating lasting assets for my business. As an example of what I mean, I launched Blog Masters in January of 2010, then I didn’t do it again until just recently. That was a year without my flagship product even being on the market. Not only that, I didn’t really create anything new. So, I haven’t been nearly as active on that front as I should have been. My sales funnel needs to be developed out more.
• I need to finally get my outsourcing strategy honed and working. I have Lisa, who consistently does everything I throw her way and she’s awesome. The problem is… I’m not having her do ENOUGH. I still have a bit of the old do-it-yourself mentality going on in my business, and I know this is something which bottlenecks me. Essentially, people aren’t being managed entirely, and the buck stops with me on that one.
• I need to put in more organization which will support the growth of my business. With all lines going through me, I hang things up. Not only that, my efficiency ebbs and flows. Quite frankly, sometimes I just don’t feel like doing what needs to be done. The solution, as I see it, is to set up systems which are repeatable then put somebody else in charge of that.

All in all, I think my business is doing well, but it is at a bit of a crossroads. Certain things need to be reorganized, and certain ways I do things changed, in order to allow things to move to the next level. And therein lies my focus for 2011.

But, before we talk 2011, let’s talk income for 2010. How’d I do?

The Annual Blogging Income Report for 2010

As I alluded to above, my income for 2010 was up from 2009, but not by alot. Now, before I jump into this, I always remind people that these numbers are gross income figures into my business. Many people equate this to “take-home pay”, and that’s an employee way of thinking. These numbers are not my personal paycheck. OK…

In total, my business brought in $210,284.60 in the fiscal year 2010. Here is the general source breakdown…

• Advertising on PCMech.com:
  • $39,041.20
• Affiliate Marketing (various sources):
  • $35,416.88
• Blog Masters Club:
  • $77,701.87
• PCMech Memberships:
  • $47,099.54
• Inner Circe/3DayMoney:
  • $5,887.30
• Misc Consulting:
  • $2,040.00
• Other (mostly old product sales on PCMech which are no longer on the market):
  • $3,284.24

This is in contrast to 2009, where I brought in $204,629.79. So, my annual gross increased by $5,654.81.

Here is a general monthly breakdown:

Now, there is a strong lesson to be seen right there in that graph, which I will address below. But, another interesting thing to look at (at least for me) is how my income distribution has adjusted. Here is a breakdown by source for 2010:

And here is that same breakdown, but for 2009:

So, in general…

• My revenue from PCMech memberships dropped.
• Revenue from ads on PCMech has dropped.
• Affiliate marketing became a little bigger segment of revenue in 2010.
• Blog Masters Club grew quite a bit.
• All in all, income from DavidRisley.com and related properties increased while revenue from PCMech has decreased.

On the expenses side of the equation, it remained almost exactly the same in 2010 as it did in 2009. The total expenses for the business came out to $122,660.43. While I won’t get into a full dollar-by-dollar breakdown on this (namely because it would reveal things like what I pay people, and that’s not for public consumption), I will say that my two biggest expenses are payroll and commissions.

Commissions, you might ask? Yes, when you have affiliates, you have to pay them, too.

I paid about $7,700 in business-related travel, $11,620.23 in web hosting costs, $3,500 in education investment for myself, $6,900 in credit card and merchant fees. I also had some utility charges that I pay out of the business, postage, equipment purchases, development services, etc. I also, privately, paid out $3,400 from the business to a charity of my choice (which will remain private).

One thing I freely admit (and I plan to pay attention to in 2011) is that my business expenses are too high. For one, I’m overpaying for web hosting and I know it. I have 2 dedicated servers that I pay through the nose for, all in addition to fees I pay for Amazon S3, 1ShoppingCart, GotoWebinar and various other services I subscribe to for the business. One of my projects is going to be to streamline things, and very likely abandon one of my dedicated servers. I think I can easily get everything onto 1 box, perhaps also picking up a cloud hosting account to play around with.

OK, there you have it. More figures than I’ve revealed in quite some time.

Lessons From 2010…. Taken into 2011

Every year is a learning experience, and I’m learning new things all the time. I mess things up just like everybody else. I’m not always Mr. Effeciency, and sometimes things don’t operate internally quite as well as I would like.

The trick (if you want to call it that) is to periodically take off the worker hat and put on the executive hat. When I’m wearing the exec hat, I take the time to look at my business from a bird’s eye view. In a way, I had to put on my exec hat to even write this post, as I got a large 2-year trend idea on what’s going on in my business. If you don’t look at things from this perspective from time to time, you don’t learn and you miss what’s going on.

So, in looking at 2009 and 2010, what did I learn? And how do I plan to bring that into 2011?

#1 – Follow-Through Is Super Important

I follow through on many projects, and those are the ones you guys see. Behind the scenes, I sometimes drop the ball. One example of that is when I launched Blog Masters in January of 2010 and then waited a full year to do it again. That wasn’t smart at all. In fact, if you look at my monthly breakdown on income above, you’ll see the huge spike in the first 2 months of the year, then things tapered off. That was Blog Masters Club.

When you build a nice momentum like that, you want to keep it going. And, in my case, I dropped the ball. The Club lost momentum and it was doing absolutely nothing until just recently. The monthly payments of the January class ended around June, and I never replaced the income stream.

So, the lesson there is to build leverage and build momentum, and once you’ve got it – KEEP IT.

And this leads me into my second lesson…

#2 – Make New Products – And More Often

After I relaunched Blog Masters in January, I created nothing NEW for the rest of the year. Well, I did launch Inner Circle, but that wasn’t even really a launch. I just kind of opened it and I still, to this day, I haven’t really taken the time to fine-tune that funnel.

So, one of my goals for 2011 is to create and launch at LEAST 6 new products. I just started off the year with reopening Blog Masters Club again – this time permanently. I did it so as to kick it off again and let it be a permanent part of my sales funnel. Plus, it will allow me to orchestrate some ongoing promotions for it both internally and with affiliates – something I couldn’t do before.

My next product will likely be coming out in February. None of them will be nearly as big as Blog Masters. I’ve learned some hard lessons regarding product creation that you guys will be seeing over the coming year.

#3 – Build My Team, Hone It Down

My business needs to reorganize to the degree that I am not the hub of it all. My internal projects to finally create repeatable systems for most things need to be completed. I need to find people to fill those missing gaps in my business. And people will need to be evaluated as to their effeciency and how much they add to my business bottom line.

One of my biggest stumbling blocks has been properly harnessing the power of others. Sure, I do it… it just isn’t always pretty. And that needs to change. I’m still doing too much myself, so this area is going to get attention this year and decisions will need to be made.

#4 – Turn My Business Into a Lean Mean Machine, Dammit.

This covers people (see above), but also systems. There are holes in my system right now. There are leaks. My business leaks money due to some inefficiencies (for example, paying for far more hosting resources than I really need). There are also things which aren’t being done properly or at all, because of lack of systems.

One thing I am looking into are changes in my shopping cart system. I ran into limitations with 1ShoppingCart that bug me. Plus, there are even limitations with the followup and targeting capability of Aweber (as powerful as they are). I’m actually pondering systems like Infusionsoft, but still have research to do on whether it is the ideal system for me.

But, I need to cut expenses, increase overall effeciency, all while making 2011 more productive than 2010.

And Lastly…

There you have it. A big HONKER blog post for you today, with far more detail than I usually go into on such matters.

I have a lot of projects on my docket for this year. In addition to the 6 new products, I have some plans for PCMech.com, a book I’d like to write and release, plus a desire to be more “out there” when it comes to guest posting and things like that. So, I’ve got a busy year ahead.

Here at home, things are going to change. A big change for us this year is that my wife is going to be re-entering the rat race. She’ll be going back to work as an engineer and she’ll be doing pretty well there, too. She’s interesting in that she is NOT entrepreneurial – AT ALL. I could be making a million dollars per year, and she’d still want to have a 9-to-5 job. So, I’m happy for her because I know SHE’LL be happy. We don’t really need the extra income, but it will be nice to have her contributing to things financially.

This, of course, means I won’t have the kids home all the time. They’ll be in daycare until at least mid afternoon. We think it will work out quite well. The kids will get more variety to their day, both my wife and I can focus more, and our evenings will be much more dedicated to simply spending time with the kids rather than trying to multi-task.

Coming full circle, though…. I really love what I do for a living. I love that I can do it while helping others at the same time.

I really think we’re all in the same boat, on a level playing field. I don’t have any special magic powers that allow me to do what I do…. I just do it.

So, all of my best to you and your family for 2011. I value every one of you more than you can imagine (even if i haven’t met most of you in person yet)…. and I truly THANK YOU.

Yours in Blogging Success,
David Risley