Kaizen is a Japanese word that describes constant and never-ending improvement. You can apply it to your business, life, relationship, and website portfolio, among other things. It consists of two words Kai, meaning change, and zen meaning good. Goodchange, or as we would say improvement.
However, when Japanese say kaizen, they don’t exactly mean improvement. When we improve something, it is then fixed in this new and improved position. For Japanese, kaizen is a way of life, where you constantly return to this place and keep improving it.
I am an amateur of kaizen, so bear with me with this short article. I think that you will appreciate it if you apply this philosophy to your website portfolio.
Website portfolio, a portfolio of revenue-generating websites
There are websites that display your portfolio (photos, past clients, etc), and on the other hand, there is a portfolio of websites that make money online. I am writing about the latter. There are website investors that buy, manage and sell websites that generate revenue over time. Some own several revenue-generating websites.
When you own 5 or 6 websites, it is considered a portfolio, and more often than not, investors want to grow their portfolio. In our case, a portfolio of websites or a website portfolio. So, how do we grow it?
What is often paired with kaizen is lean methodology. For all of you book readers out there, The Toyota Way, Lean Startup, 2 Second Lean are the few I read on the subject and can definitely recommend. Why are kaizen and lean often mentioned together? Well, as far as I know, as soon as you start to apply kaizen, you start removing waste, and you get lean.
Let’s say you are overweight, which is the opposite of lean. If you apply kaizen to your body, which means you keep improving your diet, workout, and other life habits, you essentially keep removing waste and you begin to lose weight. In the end, you get lean.
If you have a messy office and a desk, and apply kaizen… Sooner or later, you will remove all the clutter, and have an organized and, drumroll please, clean desk. Ok, that’s not lean, it’s clean, but you get it.
Is kaizen about removing whatever is blocking your progress?
I suppose you could say that making improvements and kaizen in your life, business or website portfolio would be to keep removing whatever is blocking your progress. This could also mean, that you keep optimizing your procedures, keep optimizing your website, increase the security of your website or keep improving the website load speed.
At webmaster.ninja we are passionate about helping you to kaizen your website portfolio. So we tell you if your website is loading slower than it should, or if the website’s security is lower than it should be, and so on.
We believe that if you applied kaizen to your websites, you will get a better return eventually.
What exactly can you do?
To apply kaizen to your website portfolio, it would mean that every day, month and year you do the following:
- Add more content
- Add more backlinks
- Improve website loading time
- Enhance your website security
- Improve the website’s UX and UI
- Monitor your portfolio more efficiently
- Monitor your finances more efficiently
- Set better priorities
- Spend less time working in the business, and more time on the business
Ok, that’s enough for an overview. Now let me show you the next step. Let’s take one item from that list. Like website security. Now, you can drill down, and find kaizen (constant improvements forever) there.
When it comes to improving the security of your website you can;
- Install SSL certificates on all your websites
- Create an onsite and offsite backup
- Build a code repository
- Whitelist a handful of IP addresses that can log in to your system
- Improve the way you store your passwords
- Monitor your website for any phishing, mallware or SQL injections
- Monitor your email for blacklists
And then you can dive even deeper. Let’s take the first of the list “installing an SSL certificate on all your websites”.
Improve the way you install SSL certificates.
Maybe you installed free SSL certificates mannualy, and your sys-admin could do it for you. Or maybe there is a web hosting company that has a one-click solution that allows a non-techy to install the free SSL certificate with a click of a button. On the other hand, maybe your website is an online store, and you actually need a EV SSL certificate? What is an EV SSL certificate, and what are the benefits of installing one, you can read here.
Improve the way you monitor SSL certificate expiration
Once you install SSL certificates on all your websites, you will have to monitor their expiration dates. Just like you would monitor domain name expiration dates. Some web hosting companies have the free SSL certificates renew automatically, some don’t (at least that’s the case at the moment).
Also, paid SSL certificates have to be renewed every year, or longer depending on the contract. Either way, you have to make sure that the SSL certificate is renewed on time, or your visitors will get an error message instead of the website.
Improve your procedures around SSL certificates
In case you are thinking, I am making the matter more complex than it really is, the Japanese would disagree with you. The way you handle your SSL certificates, is the way you handle your website portfolio, is the way you handle your business, is the way you handle your life. Kaizen is not a one-click and I am done thing. It is a way of life.
So, there are always ways you can keep improving this. Maybe your website is now slower because you installed an SSL certificate and you need to change providers, or tweak something. Maybe you are paying $2000 per year for your EV SSL certificate, and you could be fine with $200 per year, or maybe even a free SSL certificate? Who knows these things? Well, ninja webmasters know them.
Dig deep into your SSL certificates
I bet you there is something you can improve about your SSL certificates. But here’s the kicker, your future success of your website portfolio doesn’t revolve around SSL Certificates. It’s not about the SSL certificates. I mean, it is, and it isn’t. I spent all this time writing about SSL certificates, and then I finish it by saying, it’s not about the SSL certificates. Way to go Goran.
Bringing it back home
We drilled super deep, so let’s get back to the surface, and let me explain what I mean by it’s about SSL certificates, and it’s not about SSL certificates.
Earlier I wrote how you handle your SSL certificates, is how you handle everything. So in a sense, it is about SSL certificates, but only to a degree that you need to handle every aspect of your website portfolio, the way you handle your SSL certificates. That’s just the way things are.
On the list earlier, you have a small sample of what you could do to improve, to kaizen, your website portfolio. Improve website security was one of them.
You could do this with every aspect of your website portfolio. Let’s try another one from that list. How about “improve website loading time”. Google confirmed that “Speed is now a landing page factor for Google Search and Ads“. So let’s use that.
In case you are beginning to understand what this is all about, and I hope you do. You are probably wondering where to start. Do you really have to start with website security, or website speed?
Well, good thing I put “Set better priorities” on the list, and so can you.
What do we want? Kaizen!
When do we want it? Now!
A week from now, a month from now, or even a year from now, will your website portfolio be better or worse if you start to apply daily improvements to it? Not sure? Tell me this.
If you did 100 pushups every day, for 365 days, would your body be more masculine, or less masculine? Considering everything else remained the same. If you keep applying kaizen, you will see productivity improvements, guaranteed.
Compounding revenue, theory
In one of my earlier posts “How to get rich online“, I showed an example where theoretically you could get earn $300,000 in profits in 5 years.
You buy a website that’s making $1,000 per month. Current market conditions show that you should be able to get one for $24,000 (approximately). After 6 months you should recoup your $6,000, and you buy another website for $24,000, and this one is also making $1,000 per month. You repeat the process 5 times, until you have 5 websites making a total of $5,000 per month. In 36 months you should recoup all your website investments, and after that, sky is the limit. With the $5,000 per month in 5 years (60 months) you should be $300,000 in the plus.
Now, remember, this is theory. Market conditions, among other things, change. In the past, perhaps you could find a website that’s making $1000 and buy it for $24,000 every 6 months. Now, that could be every 12 months. Or, you buy it for $30,000, or, you have to work harder and smarter (kaizen) so that it grows to $2000 per month revenue.
But the theoretical logic remains. You buy a website, and you keep doing it, until you have 5 websites, or maybe even 10 good websites that satisfy your appetite. Also, with the example above, at one point you are $60,000 in the red. Not many people have the stomach or the finances to go through that. So here’s an updated theory.
With this plan, you are buying websites that are making $333.33 per month, for $10,000. That’s a 30X multiple and that will change over time, but you can always find deals above or below the 30X multiple. I can’t write about multiples here, because I would get off-topic. Besides, multiples are complex and can’t be explained in a paragraph.
With this table, you can play, and enter whatever numbers work best for you. In case you want to work as a private equity company, and up the ante, then you can buy websites for $100,000 and make $3,333 every month. It’s a different process altogether, but in theory, this is how it would look like.
The most important thing to understand is that these numbers are not fixed in stone. On the 5 websites you buy, one could go bust, one could triple in value, and 3 could go ok. How do I know?
I once bought a website for $6375, and proceeded to invest $3800 into various marketing activities. This website is now making $10 per month! OUCH! I also bought a website for $2159, spent $600 on marketing and got a return of $9.458 in 2.5 years. I also bought a website for $4400, spent $3600 in marketing and got $10.039 from September 2018 to February 2021.
Are multiples going up?
My personal examples show that these numbers in the tables above are possible. However, the thing that’s going to change is the multiples. In the past few years, they have gone up and up. I know I wrote that I won’t go into multiples, so I’ll just mention that the market still hasn’t figured out how to value websites properly.
You have 1 year old websites being sold for 40x multiples based on last 3 months profits. I would never buy into that, but who knows how it will go over time. Perhaps it makes more sense to build a website for scratch, grow it to $333.33 in monthly profits, and then sell it for $10,000?
Enough about website multiples, what about kaizen?
Multiples are an interesting topic, but I would rather return to the topic of kaizen. Why? That’s what will enable us to fight the high multiples. If you spot the right opportunity and have the ability to take action, it doesn’t matter what the multiple is, you will get great returns!
If you bought a website at an insane valuation at 50X multiple, this won’t matter if you doubled the revenue in 6 months. Increasing productivity will always help you get better returns. Making better decisions, and doing what you can, with what you have.
3 steps to doubling your business
If you want to double the revenue of your portfolio of websites this year, there are certain areas where you can focus your attention.
- Number of clients
- Product price
- Frequency of purchase
If you have 100 clients, and they buy 1 product worth $100, you made $10,000.
If you increase these 3 numbers by only 26% you double your business.
This is the essence of kaizen. You have 3 key areas that you need to improve. Getting more clients. By providing more value, you can charge them more. Increase the number of repeat sales.
Let’s use the kaizen approach I already showed you.
Increase the number of clients
- Create a newsletter
- Advertise on Google
- Advertise on social media
- Create more content
- Call or email potential clients
Increase product value
- Build a new feature
- Remove any bugs
- Add a bonus
- Improve your packaging
- Build a second product
Increase repeat buyers (frequency of purchase)
- Send automated emails to past buyers
- Upsell, cross-sell
- Get referrals (if it is impossible to make your clients to make a second purchase)
- Create a promotion that entices multiple purchases (buy 4 get 5)
- Create a loyalty program that encourages clients to make repeat purchases
In conclusion, I am sure that you can do a much better job than me in this short time span. After all, I am writing an article, and you are on your way to doubling your business. I hope I got you off the couch.
With that, I leave you for today. I’ve given you more work than some can handle in a month or a year, but I put my faith in you. I believe you can do what you read here.