Last week subscriber JK e-mailed me and said, “It sounds to me that the freelancer’s life is not it’s all cracked up to be.
“Although the money and the prestige sound important, getting clients and keeping them happy, along with knowing your craft and producing results sounds like the key. It involves LOTs of work!
“I may be dead wrong but correct me on this if I am. This e-mail is going to you and you alone…and not to put you on the spot.”
The short answer is: JK is right: Getting clients and keeping them happy, along with knowing your craft and producing results, is the key—and it involves lots of hard work.
JK is not putting me on the spot, because I have never claimed otherwise.
There’s an old saying: “An entrepreneur is someone who will work 60 hours a week for himself in order to avoid working 40 hours a week for someone else.”
Freelancing and any other type of small service business are labor-intensive, because they generate only active income, meaning you only get paid when you are working, whether you charge a flat fee or hourly rate.
Dentists have a saying about this: the more you drill and fill, the more you bill.
Internet marketing and other product businesses have the advantage of generating passive income, meaning you make money even when you’re not working.
For instance, I just returned to my desk from a 10-minute coffee break, and during that time my Internet marketing business received 3 orders totaling $291 in sales, even though I was not working.
By comparison, the income of my freelance copywriting business during that break was zero: I only make money as a copywriter when I am copywriting.
However, the notion that passive income requires zero work is grossly mistaken.
True, you can generate orders even when you’re away or sleeping.
But it takes an enormous amount of work up front—including building an e-list, creating or sourcing products, producing websites, writing e-newsletters and e-mail marketing messages, writing blog posts, writing articles, optimizing your website for search engines—before the passive income can start flowing. And at the beginning, when your numbers are small, so are your sales.
For instance, say you have a subscriber list of 1,000 names. The click-through rate on your e-mail to the list is 2%, so you get 20 clicks per e-mail sent to your landing page.
The landing page conversion rate is 5%, so those 20 clicks generate only a single order. If you are selling a $29 e-book, you made only $29.
On the other hand, when you build your list up to 100,000 names, those same performance metrics would result in $2,900 in orders for a single e-mail blast to the list.
If you then improve the landing page conversion rate to 10%, that single e-mail would bring $5,800 in sales.
To summarize, passive income businesses require a huge investment of labor up front in exchange for a stream of passive income, generated with relatively little additional labor, down the road.
Active income businesses require almost nothing to start up—you can begin with just a PC, phone, and Internet connection—but take continual labor to generate continual income.
Neither, however, is little or no work, as some promoters of “make money as a copywriter” and “make money in Internet marketing” claim. There is a lot to do for each type of business. Plus, you must learn how to do it, and then practice until you can do it well. All of which takes time.
A good rule of thumb for evaluating business opportunities: if it sounds too good to be true, it probably is.
I encourage you to be an entrepreneur if—and only if—that’s your strong desire. But go into it with realistic expectations and your eyes wide open.
Bob Bly is the author of “World’s Best Copywriting Secrets” and has written copy for more than 100 companies including IBM, Boardroom, Medical Economics and AT&T. He is the author of more than 75 books and a columnist for Target Marketing, Early To Rise and The Writer. McGraw-Hill calls him “America’s top copywriter”.