Thursday, January 7, 2010

Rent-Based Businesses

Rent-Based Business Model

Advertising/Renting: You might think that advertising and renting are totally different concepts, but I think they are quite similar. I am a landlord. I spent a ton of money up front and bought an apartment building. As long as I make more in rental income than my monthly mortgage, I can make a profit. Lots of businesses work this way. Buy a building, then rent it out to others. As long as the renters pay more than the regular costs of ownership, you make money. The risk is that you can't find renters.

Advertising is similar. Lets say you buy a billboard on the highway. All you have to do is find a "renter" who is willing to pay money to post their ad on your sign. You are essentially renting it to others. Or TV. If you own a TV station you can show whatever programs you want. If you can find people who will pay money to use some of your television time for an ad, then you can make money. If you can't find enough advertisers, you lose. Thats why I think advertising and renting are the same thing. The only difference is what your people do with the space they rent from you.

The Internet can also be rented. Think about Google. All Google is is a massive search engine that rents space to advertisers. Advertisers pick a word that they want to rent, and everytime someone searches for that word, their ad appears. Its not a building, its not a billboard, and its not a television station, but its the same principle. As long as enough tenants are willing to pay for a spot, you make money. The key is to keep your space well maintained. If my building falls apart, no one will rent it. If Google gets outdated, no one will advertise on it.

If you own something, chances are it can be rented. Many people rent out advertising space on their cars. Its called "Car Wrapping." Lots of agencies will pay you decent money to drive around for a month with a big corporate logo on your car. You can't make a living this way, but you may be able to make $200/month.

A very popular way to make money on the internet is advertising. All you have to do is create a website that people visit often. If enough people visit your site and click on an ad, you can make money. A second way to do this is called "Affiliate marketing." In affiliate marketing, you create the ad yourself. If you have a blog that gets (lets say) 1000 visitors per day, you can offer to write up a blog post that  endorses a certain product or company. If you do this very often, you will probably lose your regular internet traffic, but if you do it once a month you should be able to keep your regular readers while also making decent money.

1 comment:

  1. Small Town Welding Shop now employ's Robotics
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