Diversify your Income sources through self employment

I have been following a thread at Google Webmaster Central recently. It's a thread begun by Google themselves and (as you might have guessed) it concerns the "Big Panda" algorithm change.

Google asked for "feedback from site owners and the community as we continue to refine our algorithms". Well, they got that - over 700 replies through yesterday and I'm sure they are still coming.

Most of the posts are by unhappy people who have had their SERP (Search Engine Results Position) badly affected by this change. My purpose here is not to talk about that specifically, though I will note that certainly some richly deserved to be sent to the cellar of Google results and others seem to truly have been treated unfairly.

What I want to talk about here is those that seem to be devastated by this; those who say that their business is destroyed and their income is gone.

I don't honestly have a lot of sympathy for those people.

Well, that's not entirely true. I'm human, I can hear their pain. I can understand the anguish and I'm not at all cold hearted toward that. I do feel sorry for anyone who has been damaged by this.

However, I have to remind everyone of an old adage about eggs and a basket that you undoubtedly first heard at a very early age. In this case, Google search is the basket, and the eggs are the income that came from the visitors Google search was sending prior to the Big Panda update.

Don't put all your eggs..

Great advice, isn't it? Too bad so few of us pay any heed to it.

Seriously - how many of you have one skill by which you earn your living and one employer who actually provides that living? The economic downturn of the past few years has certainly put a sharp point on unemployment, hasn't it? Self employed people often are quick to point out that an employee is often just a line in somebody's auxiliary spreadsheet and when numbers need to be trimmed in the main sheet, big blocks of jobs can disappear with a quick select and delete. That can't happen when you are self employed, we say, and that is true.

But if your entire business depended on Google search and Google suddenly changes the rules, is that really any different than being in that now deleted section of the spreadsheet? It happens just as quickly: many websites had plenty of traffic on February 23rd and almost nothing on February 25th.  An employer might have given you two weeks notice; Google gave them nothing.

The Programmer

At one time in my life I did a lot of custom programming work. Most of it was quick, ad hoc work, but some of it turned into fairly steady work because of constantly evolving needs.

I never liked getting too tied in to one company. A company that demands too much time is dangerous because the time you spend with them is time you cannot be with your other customers. So, whenever one company started demanding too much of my time, I'd look for a way to pass them off to someone else.

That was exactly what I did with a Boston based company that rented out buses. They needed far more hours than I was willing to provide, so I introduced them to a fledging programmer who didn't have very many other customers. That worked out well, and he continued to work for them for several years.

Unfortunately, it worked out a little too well for the programmer. The company paid him well, let him set his own hours and he made a nice near six figure income just from them. Because it was so easy and well paying, the programmer neglected all his other customers and soon stopped looking for new work at all: he had all he wanted at that one company.

You can probably guess what happened: the company lost their bid on a major city contract and the programmer suddenly found himself with no work and no income. The few customers he had before this gig were long gone and he had not developed any new ones. He was effectively out of business as a programmer. The last I heard of him, he had gone back to teaching school (his occupation prior to starting his programming business) at a very significant salary reduction.

Diversification

My Adsense income has also declined since that update.

Strangely, this decline seems to be unrelated to traffic or SERP: most of my high SERP pages haven't changed position at all. I do have a few that have disappeared, but those were odd beasts anyway: I could never understand why Google thought they were a good match for the terms they ranked for, so their nose dive in the SERPS actually might be that Google finally has the same opinion. Those few pages were never a significant source of income and had very high bounce and exit rates, so I won't miss them.

But, for whatever reason, RPM (revenue per thousand impressions) has declined since that update. Related? I don't know, but I'm not panicking because that income is only part of what I do. I don't like losing any of it, of course, but even if I lost all of it (which is not the case), I'd survive: I have a lot of eggs spread across a great many baskets and at least half are completely isolated from the Internet - that income doesn't come from my web activities at all.

Not easy, but..

It's not always easy to be diversified. Pursuing alternative revenue streams may require giving less attention to important streams that exist now, so you may be understandably reluctant to do that, especially as that might even reduce your overall income slightly.

But if that main stream is critically important, it is also your weak link. Remember this: your greatest asset is always also your greatest liability and greatest weakness. If you are entirely dependent upon one income activity, you run the risk of losing everything at one fell swoop.

"Oh, that can't happen!", we tell ourselves. No matter how recession proof you may think your business is, no matter how capable you think you are, no matter how loyal your customers, the reality is that your business really can collapse over night. Beyond that, you can collapse yourself: the business might still be there but you can become physically or mentally incapable of working at it!

Remember those eggs. Diversification is NOT easy, but it truly is worth considerable effort.

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