In order to get the AEReS project off the ground I need to get to $20 million. As I currently have zero dollars I have to necessarily start off small. When I was looking into business loans a couple of years ago I was told by the commonwealth bank that in order to obtain a business loan you need to have security for the amount you lend. So if I wanted to borrow $20 million I would need to have $20 million. It doesn’t quite make sense to me since if I had $20 million surely I wouldn’t need to lend it, but the capital you put up as security may be equity that you have in some other asset or assets and therefore is not available for the use you want to put it to. The problem with using a loan to finance the AEReS project is that it is primarily a research station, and therefore not necessarily generating a revenue stream which it would need in order to pay back the loan. The best way forward then, I thought, was to set up a series of companies which would generate an income to finance the project. But what companies.

As mentioned in my post on the 28th of March, on the 13th of March I registered my first company, a holding company which I would then use to own and run the various other companies and businesses I set up.

So at the moment my company business summary is:

Number of Companies: 1 (Allbutt Holdings Pty Ltd)
Number of businesses: 0
Income generated (annual): $0.00
Number of Employees: 0
Number of Partners: 0

So we have some way to go yet before we reach $20 Million and can open AEReS.

In the scientific way this is the problem we have to solve. How to make $20 Million from nothing?

That should be easy enough to solve. One option would be to put the minimum amount of $5000 into a savings deposit. If I did this, with a yearly compound interest of 8.10% (the current rate at the Commonwealth Bank) it would take 108 years to make $20,812,260.70. I don’t have quite that much time on my hands so I would like to find a faster way of doing it. I will put a time constraint of 10 years onto my plans, so that way I can set up AEReS then still have time enough to actually use it to develop sustainable agriculture in an arid environment.

So I need to make $20 Million in 10 years, how can I do that? I don’t have any start up money so need to start something that doesn’t need an initial investment.

When I was in the US in February I picked up a copy of the February edition of Entrepreneur Magazine, in it was an article describing how some of the World’s most popular bloggers make good money off their blogs (pg 52). See for example www.johnchow.com, who made $30,616.35 in Jan 2008, up from $3440.66 in January the previous year. He does this by publishing a blog where he tells people how much money he has made by telling people how much money he has made. As a result of that he receives 253,227 page views from 134,931 unique visitors (as of February 2008). Just as with a commercial radio or TV station, a viewing public that large is worth money.

People pay John Chow very good money to advertise on his site, or for him to come and review their site because they know that 134,931 people are going to see it. In addition, John knows that a good percentage of those people are also going to click on the various ads he has around his pages for various products, or web sites. There are various companies he uses to do this and he tells everyone about these companies on his web site so they too can do it. For each click or purchase made through the ads on his web site John collects advertising payments. The point being that a large readership is a saleable commodity which can earn you a very healthy income. To convert John’s January income into an annual income that is around $360,000 per year.

While I probably won’t copy John Chow’s model of web income it is well worth thinking about how to generate page views. Exactly how do you get people to want to come and look at your site.

Answer: Content.

The reason people come to see your site, whether it be JohnChow.com or ninemsn.com.au (which I think is the most viewed Australian web site) is because you give them something that they need or use or that interests them.

My aim then is to develop a set of web sites which have great content on them which is really interesting or really useful and that will attract readers. I have some ideas for these and it will be interesting to examine them in the coming months, try them out and see what works. I will post the results of those experiments here.