How To Make Money Online: 6 Steps To A $200,000 Automated Business

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If you’d like to learn how to make money online and are sick of useless posts about regurgitated ideas and zero actionable information, this will the most important post you read all year.

In this post you will learn exactly how I started, grew, and automated my online business to the point where it generates $200,000 per year and requires 2 hours a week of my time.

Unfortunately that’s not $200,000 in my pocket, that is our revenue so expenses and taxes still need to subtracted. Even still I have replaced my corporate salary and it is a passive income.

Anyone can do this, and since I’ve taught this to hundreds of people you can shortcut your success significantly by following the process laid out in this post, and actually sticking to it. Do not deviate.

how to make money online

How I Make Money Online

Let me show you how my business works. Don’t worry about my website, I will show you it later on in this post. Focus.

I run an animation agency where we create explainer videos for B2B clients.

When I started this business my goal was to offer a premium product, at a premium price, but I quickly found out that the only companies that could afford premium priced services were companies that I generally didn’t like working with.

Bigger budget usually means bigger company, which also means there are many people involved. This caused sales cycles to be several months long, but the more troubling issue was the simple fact that there are WAY fewer companies with big budgets, than there are companies with low budgets.

Luckily it turns out that lower budget companies typically only have 1 decision maker, which means they can literally visit your website and make a purchase right then and there.

So once I flipped my premium price premium service model on its head and went for the masses, I quickly found that this model was much better suited for me as my goal was also to make money online.

The reason I wanted to make money online was so that I could travel, and work on my own terms.

When I was working with big budget clients I just didn’t seem to progress towards that goal.

But like I said, one day we flipped our business model on its head, started offering more template based videos which allowed us to decrease production cost and delivery times significantly, and start targeting companies with smaller budgets.

This was the day I unlocked the potential of my struggling video agency. Most online business owners actually start out that way, they think that the more they can charge for their service the better, but the truth is that is not always the case.

One important distinction to make here on your make money online journey is whether you want to be a freelancer or an agency owner.

The freelancer cares about how much they charge per project as they deliver the work, the agency owner cares how much profit he makes at the end of the month, regardless of what their pricing strategy is. He doesn’t charge for his time.

how to make money online

I was a freelancer, but when we flipped business model I became an agency owner.

Rather than spending all my time trying to manually acquire the next client, my focus became how to build systems and procedures that would acquire new clients (and deliver to them) on autopilot.

Now my video agency averages 8 clients per month and we do just shy of $200,000 a year. Since I’ve automated and delegated pretty much everything this means I also work less than 2 hours a week on that business.

Hence my book title 2 Hour Agency where I go even more in depth about how I built this business.

So the way I make money online is simply by having advertisements running to my website (which you will see later in this post), this gets decision makers to buy videos from us, and then we sell them add ons and get them to come back and buy more in order to maximize our profits.

You will learn how to do all this in this post.

how to make money online

How You Can Build An Automated Online Business

Throughout this article I will try to explain how I’ve built my agency and simultaneously teach you how to build one yourself.

I started offering explainer videos as a service simply because I saw others doing it with success. This is generally a good strategy.

Often times we tend to think that the way to start a business is by coming up with something new, by fixing an existing problem in some new way.

If you want to be an innovator. If you want to start the next Google. By all means, go for it.

If you simply want to make money online in order to replace your salary and allow you some freedom in your life, then I suggest simply looking at what’s already working and doing your own version of that.

There’s a couple of ingredients you need to build a digital agency, especially if you’d like to automate it.

Here’s what you need:

1. A target audience, you need to be able to get in front of them with ads
2. The target audience’s problem
3. The solution to that problem

Ideally, this is actually the sequence that you should follow in order to get started as well.

Most of us erroneously start with #3.

We say “hey I wanna sell this thing, does anybody want it?”

The problem with that is that it’s starting with what you want, not what your audience wants.

If you start with the audience, and figure out their problem, the WHAT is typically very obvious.

Example: your target audience is life coaches.

The problem: they don’t know how to get new clients

The solution: done-for-you webinar slides (this is one component of a whole system).

I just came up with something to sell based on a very real problem, which is more likely to sell successfully, than if you just came up with a service on your own, and then started looking for buyers.

The other thing to keep in mind is that you should always

“Sell people what they want, give them what they need.”

What this means is that the life coach above might actually need webinar slides, but maybe he doesn’t know it.

He might actually be in the market for something else. He might be looking for someone to create his website, but in reality that might not be what he needs.

However if life coaches are out there looking to buy websites, that’s what you should sell them, and once you’ve sold them a website you should offer what they REALLY need, which in this example was a webinar.

A great way to find what people are already looking to buy is to go create a freelancer profile on upwork.com and go through the different categories to see what kind of jobs people are posting.

Take note of this and design your offer around one of the most common job posts.

Do the above and you should have a good idea of who your target market is, what their problem is, and what it is that you should sell them, but let’s get more specific on what to sell them in the next section.

how to make money online

Architect Your Sales Funnel

In my opinion every agency should at least have 3 things to sell.

A front end offer, add ons, and a back end offer.

The front end offer has one goal: get you new customers.

You should not worry about making a profit from your front end offer. Your goal should be to break even.

As your customers also purchase add ons, and a small percentage pick up your back end offer, you end up being profitable whilst having created a machine.

The reason I say “machine” is because the idea is for you to be able to advertise your front end offer, have people buy it without phone calls, emails, meetings, and proposals. Once you got customers, selling them more stuff, and therefor making a profit (since the cost to acquire the customer has already been absorbed by the front end offer) is easy.

Pretend you want to make money online by selling web design.

What most will do is decide to charge $2,000 and go out there looking for people willing to pay it.

They’ll spend the vast majority of their time looking for prospects, cold emailing, cold calling, going to meetings and crafting proposals which mostly get rejected.

They’re in a constant chase of getting the next client.

Now let’s transform that business into something that we can scale and automate.

Let me take that $2,000 web design offer, make it $500. Find a freelancer to deliver it to the clients for $250, which leaves me another $250 in “profit” that I will spend on advertising in order to find people wanting to buy this $500 offer.. without those cold calls, emails, meetings, and proposals.

Once I got them to buy the $500 web design offer, I will offer them some add ons such as a new logo, done-for-you copywriting for the site, and professional images.

Now maybe the average order value goes from $500 to $600 allowing me $350 in ad spend in order to acquire a client.

But again, my goal is actually to break even, so I will keep advertising to more and more people until my cost to acquire a customer is actually $350.

So even if I start off only paying $200 to acquire a customer, I will push my ads to more and more people until the point it reaches $350.

Then, as you know, we have customers coming in, but no profit.

That’s where the back end comes in, so in this case there’s a few things that make sense.

The first that come to mind are ongoing support/maintenance which could be a monthly retainer. Probably wouldn’t be a massive fee as the workload wouldn’t be too dramatic, but a really good back end would be helping them with SEO as well as Pay Per Click advertising from for example Google and Facebook.

There you go, we just designed an agency that can be automated and profitable, where you can outsource most of the work, and the client acquisition can be put on autopilot.

Do you see how much better this model is than just offering a $2,000 website and spend all your time trying to get a new client?

how to make money online

Getting Your First Clients

Okay so you have an IDEA of how you can make money online, what your business model is, and what the offers are going to be.

IT NEVER WORKS OUT COMPLETELY THE WAY YOU PLANNED IT!

Realize this right now. If I took the offer above to the market I would quickly start tweaking everything!

I would learn more about my target market. I would learn more about what they want to buy. I would learn more about the language they use. I would learn more about what add ons they’re asking for, and what else they need help with that I could offer as a back end.

Everything will change from your original idea, so stay open minded here.

The reason I bring this up is people will do what I did above, and outline their offers, create an ad and send some clicks to it.

Then they come back to me and are confused that they didn’t make $2 million dollars after 28 minutes.

WHAT’S WRONG?! NOBODY BOUGHT!

Dude. You JUST started.

It’s not that easy.

You have a starting point, now you have to tweak everything based on the response you get from prospects.

For this reason I always advise people not to try to close sales automatically from the start.

You want to talk to your target market on the phone in order to LEARN.

What are they looking to buy?

What language are they using?

Gather information to tweak your offer.

So although our goal is make money online, I advise getting your first clients manually even if happens to be offline.

I got my first client by walking into local business with the following pitch

“Hey do you guys need a website?”

Yes, I started off selling websites, and guess what, I got my first client on day 1 of trying that strategy (after months of not getting any clients trying to get it done from my bedroom).

So put in the work in the beginning and automate later on.

The best way to get started with almost no money is to do cold emailing and trying to get people on the phone from your email.

If you’re selling websites to local businesses find their emails through the yellow pages or something like that, and email as many as you can (probably don’t do more than 50 per day to start as your email address will get blacklisted).

Send them a simple email like this:

“Hi. I create awesome websites for local businesses. When do you have time for a call this week? Robert”

Get yourself 3 clients, do an awesome job, and offer them a discount in exchange for a testimonial (important).

how to make money online

Create Your Salesman Website

The reason you want testimonials is that your website needs proof and evidence that buying from you is a good idea, and carries very little risk.

I cover how to create a salesman quite extensively in my book the 2 Hour Agency, but I’ll tell you briefly here what you need to know as your website is a crucial component of making money online.

The thing is most agencies don’t use their website the way they should.

Your website should get you new clients, or leads in the worst case scenario.

The goal is not to show your portfolio, the goal is get new clients.

The difference here is that most agencies simply use their site as a portfolio, which doesn’t require much.

What we do differently is that we actually make an offer on the website, and for that reason we need to answer every single question they’ll have in order to make the sale.

I’ve made a video, and an automated agency template that you can check out here.

how to make money online

Create Your Email Autoresponders

If you are able to get email addresses on your website in exchange for some valuable information that’s a good way to continue to bring value to them in hopes of eventually becoming a customer.

I recommend having at least 7 emails going out offering valuable information with a pitch at the end of the email.

I’ve already written a blog post about how we use Active Campaign to get more business, so you can read that here.

how to make money online

Creating Your Ads

Once you’ve got an offer that people have taken you up on, you’ve gone through the process of creating an awesome salesman website that actually provides all the information needed to close the sale you’ll want to drive some traffic to that website so you can actually start to make money online.

Typically this comes down to Google and Facebook, but there are many other platforms that you can try out.

One thing to keep in mind is that you should absolutely always always have retargeting ads in place.

These are ads that show to people who visited your site but didn’t buy.

Those ads always convert the best and my best performing ad ever was simply a slideshow video made in Keynote that had 11 testimonials from happy customers of ours.

That ad had a 1400% Return On Investment.

Apart from that I typically like to create content and then just have a pitch at the end of the video.

Again, this is something I’ve already written about, and I even have a 1+ hour long video where I show my whole process for making Facebook video ads, which you can check out here.

how to make money online

Automating Your Fulfillment

So you were able to automate client acquisition? You are GOOD! Most people simply give up too soon.

The thing is you want to make money online consistently, for the long term.

What that means is you have to deliver, and you have to also remove yourself from that process if you want an automated business.

The good news is that at that time you are probably extremely busy delivering results to your clients who hired your agency, so we need to help you escape the day-to-day operations of your business, or you’ll be stuck forever.

The main thing most agencies can benefit A LOT from is having a project manager.

I typically set up a project management software like Basecamp and then get a project manager to work 3-5 hours a week for me to free up some of my time.

I’ll train them by recording videos on my computer on how to do certain tasks in our agency, which means pretty soon they can take over the whole responsibility of delivering to our clients, which frees up my time tremendously!

Chances are you will need other freelancers involved as well, depending on what the service is that you offer.

What I do once I’ve delivered our service a few times is break down the whole process from when they find out about us to when our service is delivered to them.

Once I got a list of every little thing that has to happen, I’ll go through the list and ask myself:

“Can I remove this task entirely?”

If not, then I ask..

“Can I automate this using computers?”

If not, then I ask..

“Can I delegate this using other people?”

99% of the time you’ll be able to get something off your plate with one of those solutions.

how to make money online

Setting Up Your Post-Delivery Essentials

Another thing that I find to have a big impact on your ability to make money online with an agency is making sure your post delivery is not only a good experience, but something that benefits your business.

You should be asking for testimonials. You should be asking for referrals. You should be checking in after a few weeks in order to hopefully start another dialogue about buying more things from you.

Most of this can be automated by simply using email, which again you can read more about in my blog post about Active Campaign.

Make Money Online Summary

So we’ve covered how to make money online without investment by creating a digital agency.

Rather than going for high end pricing and competing with everyone I prefer to have an affordable front end offer that we can sell on autopilot and then upsell our back end in order to maximize profits.

You should architect your front end, add ons, and back end with the knowledge that they will all most likely be tweaked, and you should want to talk to your target market and close sales manually in the beginning because it will help you learn essential pieces of information to tweak your offer, your messaging, and your approach.

Once you get your first 3 testimonials you should built out your salesman website using my template, and start driving traffic to it and hopefully get your first sale on complete autopilot.

At that time it is crucial for you to build systems and a team that can deliver the service without your involvement.

Don’t forget about post delivery essentials like asking for reviews, referrals, and trying to sell them on other services that you have to offer.

This should be enough information to keep you busy for a while.

Check out my book the 2 Hour Agency if you want more details, and let me know in the comments below what questions you have.