Playing the six-figure income game (Earnspiration Report Issue 10)

Subscription on smartphoneA game I sometimes play in my head during moments of tedium on the daily commute is to try and answer this question:

If I could get 500 people to pay me £20.00 per month, I would earn £120,000.00 per year; but what product or service could I entice them with so that they are happy to part with their hard-earned money on a monthly basis?

Subscription business model

It sounds pretty simple and essentially I’m talking about a subscription-based business model here.  It could be reselling web-hosting, providing online training courses or taking a monthly retainer for business services.

However getting somebody to part with £20 (or even £15, £10 or £5) each month is not that easy.

To begin with, you need to provide something that is either essential (such as home insurance) or highly desirable (such as Sky TV or Spotify).

You also need to have access to an audience who will be interested in your service.  That means promoting it sufficiently so that people not only become aware of the service, but also develop enough interest and trust in you to part with their money.

The folks over at Copyblogger recommend building an audience first – even before you develop the product or service.  Not only will you have a better idea of what people will want to buy, but you’ll also have a ready-made group of people to sell to.

Just as important as points one and two, you need to have sufficient technical and logistical capacity to be able to process payments, deliver the service to your customers and respond quickly to any issues that they might experience.

Pricing the service

Price is a big factor too and if you can charge a higher monthly subscription you won’t need to find as many customers:

  • 200 x £50 = £10,000 x 12 = £120,000 per annum
  • 100 x £100 = £10,000 x 12 = £120,000 per annum
  • 50 x £200 = £10,000 x 12 = £120,000 per annum

Or you may be happy with a smaller income to begin with:

  • 250 x £20 = £5,000 x 12 = £60,000 per annum
  • 250 x £10 = £2,500 x 12 = £30,000 per annum

The income figures above don’t of course account for costs and taxes, which if too high could make the business model unworkable; but I don’t tend to dwell on these aspects during the initial brainstorming!

Can I get a million people to each give me a £1?

The other variation of my entrepreneurial daydreaming is to ask myself how I could get one million people to each give me a £1.

The most obvious solution so far is to write a book or create an app that generates a million sales – no insignificant feat then and either the book or the app would have to be an absolute corker if they were to go more viral than the ice bucket challenge and achieve that many sales!

So how would you persuade people to pay you £20 or $20 a month?

Top links and resources

Every week I scour the web for new interesting and inspiring articles and videos.  Here is the latest selection:

Career

Ask the experts: How do I ask for a raise?

Leadership & management

The dullest, most vital skill you need to become a successful manager

Entrepreneurs

Former English teacher attracts half a million visitors a month to her website explaining the rules of grammar – and it’s making £25k a year

Personal branding & online profile / platform

The key to a killer LinkedIn profile? Just ask Reid Hoffman

Freelancing

How to earn $250 per hour as a freelance writer

Personal development

5 presentation tips from the world champion of public speaking

The simple secret to having good luck

Business skills

A predictive analytics primer

4 odd yet effective ways the smartest people prioritize their days

Strategy

The man who made Louis Vuitton, Louis Vuitton

Marketing & media

How I write ebooks, and why you should steal my process (free structure guide)

It’s totally normal to watch other people play video games

Investment

108-year-old investor: ‘I doubled my money in 1929 crash – and I’m still winning’

Barry Ritholtz: Time, not timing, is key to investing success

Wealth

The two phases of wealth building

Peter Thiel disagrees with you

The village stocks

Barclays is going to dock pay for its most disliked senior bankers

 

Image from: Johan Larsson

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