One of the hardest parts to starting an online business is to identify realistic goals. With so many stories about some internet marketing guru who made a million in the first six or twelve months, it can be rather depressing when you are struggling away to make $20 a month after 3 months and perhaps only $200 a month after a year.

I have been online for about 18 months now, and since I had taken two years leave from work to set up some passive income streams, it is rather pathetic to see the income I am making now compared to the 500,000-600,000 I would have made from staying at work. BUT.....

Online income is a long term strategy - not a short term. I look at it this way. I may have foregone a significant income, but I was burnt out and had little passion left for my work. The money would have been invested - returning at best 9%, so accounting for tax, that would have been an annual income of say - $32,670 [363,000*9%]....assuming I don't spend the capital, and do spend the interest.

My main focus has been building a solid base of niche sites - with very little effort in marketing. Now that I have that - I am eager to return to work and continue on a more marketing focused path. My current site income is only a few hundred dollars a month - but I only have to get that to $3000 a month to be just as well off - and it has the potential to keep growing. The fixed return deposit is at the mercy of interest rates which are starting to decline.

My site traffic is building nicely every month - even with no additional marketing efforts [ I have only just started article marketing]. My sites are well optimised [ many of them are on the first page of Google results, with several popular keywords at #1!!. Even more are either #1 or on the first page of Yahoo.

Once I generate sufficient income I will outsource as many tasks as possible, but I really enjoy the writing and communication with the readers so don't feel the need to offload it all. What else would I do with my time - there is only so much golf to play and so many lunches to attend before it all gets a bit of a bore.

I chose to come online because I love the medium. After a year of reading about top internet marketers I find that most of them have been online since the mid 90's and most of them made little income until about year 4 [inspite of their claims!!!]

So here is what I have found from my own experience, reading blogs and listening to other IM's - I hope it makes you feel better [you are not hopeless, it just takes time and continued effort]

Expect it to take 2-3 months to get going. It takes that long to learn how to build a simple site and optimize it, let alone get indexed.
You don't need fantastic graphics to get started - instead, focus on making your sites look clean - take a look at these examples: The IQX, or Smart Buying Audio
Use blogging.com to get a first link to your website. Once you have one site indexed, you can link of the home page to any subsequent site to get that indexed within a few days.
Don't go all out of super hosting to start. The are some very good web hosting packages under $10 a month - once you have sufficient traffic and income, consider moving to a a dedicated host if you need more speed.
You may see your domain drop in search results after the first month - Google tends to rank new sites highly for a few weeks. Don't let this discourage you - you will crawl back up again. This doesnt always happen. I have one site that was #1 on Google from day 1 and still is.....and it's a good ranking keyword phrase.
You should start making sales within 4-5 months, but don't expect to make any real income for the first 6-12 months. Once your domain has a little age on it, you will find your rankings improve. As traffic builds, so will your income
Expect CTR to drop as you get more traffic. This is a natural response to higher numbers.
Don't expect any income for 6 months
At about 9 months you should be covering your hosting costs and making sufficent to invest back into some PPC advertising.
PPC ads work, not only to boost your traffic, but the links to your site also boost your rankings, meaning even more traffic.
Use other traffic building methods such a blog posts or forum posts [focus on ones with a PR of 4+] - but don't spam. One a month is enough!!! If you want to post more often - leave your site out of it or use the proper signature tags spread between your sites.
Unless you have a well optimized PPC campaign, you can expect sales to be erratic for the first 18 months - don't worry if there are patches of no sales for 4-5 days. Expect sales to decline in summer - when everyone is more likely to be outside or on holiday than in front of a computer screen.
Don't get too hooked up on your own page rank to start - and forget Alexa rankings. Unless you are in the top 100,000 I have found their ratings very unrealiable above this - I had my first site drop from 95,000 to about 3,000,000 almost overnight - yet both my traffic volume and pages per unique visitor climbed steadily.
If your site is basically an Amazon store or other affiliate product site you will not attract much support from Google - so bump up your site with highly targeted reviews and blogs. It's good for your visitors as well as Google.
If you are not breaking even at 12 months - don't fret. Remember the effort you are putting in to build your site foundation, rather than in advertising, will pay off handsomely in 4-5 years. If relying on natural traffic, making $150 a month in affiliate income after a year puts you in the top half of marketers. Just keep building content month after month and ENJOY IT!!
Watch your stats - the AWSTATS the come with your hosting plan will give you everything you need - and its fun to watch those bars climbing every month
Don't put all your faith in Google - there are many other search engines out there that can drive traffic - the best of course being Yahoo and Ask.com
Track your performance and test, test, test. At the start you are struggling just to get those pages out, but after 6 months you should be starting to manage your business as well as your site. And performance tracking and testing and the most overlooked weapon in your arsenal.
Don't be afraid to ask for help - you will be surprised how many other internet marketers will be happy to share their wisdom - remember, they have been through the pain of the first year also. Accepting they are not permitted to disclose income information [even if they are willing], they can and do often give you good guidelines
NEVER GIVE UP!!!! - I you can ride out the first two years, you will be in the top 5% of Internet Marketers - most give up around 18 months....just don't give away that day job too soon. And enjoy the journey - it has its own rewards far beyond the dollars.