Knowing Your Numbers – Income and Overheads

How are you doing with your online business?
Have you made a profit or a loss in the last year, and how much?
What about in the last month?

We all need to know these numbers if we are to have successful businesses.

Do you have the figure for your monthly overheads? You can’t possibly know if you are making a profit if you don’t know how much you are spending on your business.

Let’s get down to basics with this:
Your overheads are amounts of money that you will spend regularly whether you do any work or not. These will include telephone and Internet access charges. It will include charges for your autoresponder account and tracking service, your website hosting costs and the annual fee for your domain names. It will also include any monthly or annual upgrades that you pay for. If you are paying an accountant or bookkeeper these are also overhead costs.

All of these costs are happening whether you are working your business or lazing around on the beach. You need to know what this figure comes to every month (for annual bills simply divide them by 12 so that you have a monthly figure). You have to earn this amount every month just to break even!

It is wise to keep these costs as low as possible, but not so low that your business growth is stunted. You will still want to upgrade in certain programs to improve your advertising reach.

Other costs are linked to you actually working, such as the electricity you use to run your computer for business use. PayPal charges and other bank charges may also come into this category. If you are a program owner the commissions you pay will also come here. These costs will usually vary from month to month.

The other figure you need is the amount you received in commissions and other payments. This figure less any costs incurred directly in earning this income is your “Gross Profit”

Subtract your monthly overheads from your monthly Gross Profit to find your Net Profit (or perhaps Net Loss).

If you are making a net loss or of you are making a net profit and you want to increase this profit
you can do one of two things (or both): You can find a way to reduce your overheads or find a way to increase your gross profit.

My suggestion is that you have a look at your overheads and remove anything that is unnecessary, but don’t obsess over this. It’s far more productive to grow your business by increasing sales and commissions. In the next post we will look at some more figures that will help us to do that.

Knowing Your Numbers

This is the first of a short series of posts about the business side of Internet affiliate marketing

Q. How do you tell a real business person from somebody who is just playing at running a business?

A. The real business person knows their numbers!

How much money did you earn (or lose) last month?
What is you projected profit for next month/quarter/year?
What is your best performing advertising source?
What is your best selling product or service?

The answers to these questions are vital to the success or failure of any business, whether Internet based or not.

As business people we need to be fanatical about the numbers in our business. We need to be in control of our outgoings and our income. YES, we do need to be in control of our income! We need to know what is working and what is not working so that we can be efficient with our time and our financial resources.

Internet affiliate marketing is a real business that will bring you real returns, but only if you run it as a real business.

So, if you are not doing so yet, commit today to learn how to run a real business. I’ll be posting again soon to help you to do exactly that.

Do you really want me to join?

A rant – with no naughty words 🙂

As a professional online marketer I choose to use an email address on my own domain. In fact I have several which separate my emails for me into different folders for different types of email.

For instance newsletters that I have chosen to join will go to one email address; membership emails from programs I have joined will go to another address and mailing list program emails will be collected at yet another address.

This is the way I choose to run my business. It is time efficient, it is easy to use and emails sent to me are always received, properly sorted ready for reading and are very unlikely to bounce.

So when I choose to join a program and then read on the sign up page “Gmail Only” I invariably change my mind and will not join that program. I have tried Gmail and have decided it’s not for me.

I already have my email application open and ready for a confirmation email or any other emails that are sent to me. I really don’t need Gmail as well. It is unnecessary and would not be time efficient for me.

It has been suggested to me that I have a Gmail address simply for joining programs that insist on it. Why should I have to sign in to another Website simply to click a confirmation link to join their program? How many of that program’s future emails do you think I would actually read anyway?

Running an online program is a business. Like any other business an online program relies on customers to create turnover and hopefully a reasonable profit. Why would any business want to turn away good potential customers by dictating to them which email address they have to use? If I tried something like that with my offline business I would very soon not have a business. So why do people think that an online business is any different?

In business it is important to make it as easy as possible for people to do business with you. It is perfectly acceptable to state a preference. “Gmail preferred” is fine, but “Gmail only” is putting up a barrier to any potential customer that doesn’t have, or doesn’t want, a Gmail account.

So here are my final points to some this up:

You are not doing me a favour by letting me join your program.
I can run my business perfectly well without joining your program.
I will spend money if I believe I will see a reasonable return on my investment.
I am your potential customer. Look after me!


A quick update – I have just checked both of my own TEs for members bouncing emails. There are just 4 members with bouncing addresses and every one of them is using a Gmail address!

Surf 4 Quality – My Newest Traffic Exchange

On 1st November last year I launched World Wide Traffic Exchange. Today I am launching my second traffic exchange “Surf 4 Quality”.

Surf 4 Quality is radical as it works in a different way to all other traffic exchanges. Surf 4 Quality is designed around the concept that if you have your site in rotation you would almost certainly like people to look at it! Surf 4 Quality is designed to eliminate idle clicking and to encourage people to take notice of what is being shown.

Diversity in advertising methods is useful as people respond in different ways to various advertising media. My new site offers eleven different methods of advertising. Some of the advertising is displayed off-site on Websites such as this one.

Whereas World Wide Traffic Exchange is primarily a paid to use program with a free option. Surf 4 Quality is primarily a free to use site with some paid options.

You can join using the form here.


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Are All Of My Eggs In One Basket?

In my last post I stated that if I could only pay for one thing it would be my RocketResponder account. In a comment to that post I replied that you should not have all of your eggs in one basket.

How then do I reconcile those two statements? Do I not have all of my eggs in my RocketResponder basket?

I need to point out that I do not rely on RocketResponder and if RocketResponder went out of business I would take my list and use a different autoresponder service.

If you log in to RocketResponder and click “Manage Lists” next to each of your lists you will find a button that says “Export”. Exporting your lists should be done regularly.

Backing up data is the security in my business. I could never rely on any one program to provide my financial future.

If I Can Only Pay For One Thing, What Should It Be?

That’s a great question and I don’t even need to take any time to think about it.

The answer is; a good follow-up auto-responder service.

The one most important thing in your online business is your mailing list.  If you don’t already have a mailing list you need to start one today.  Stop doing everything else right now and get your mailing list set up. (You can finish reading this though :-))

I’m not holding any punches here.  If you haven’t got a list you haven’t got a business.  If you think you can’t afford an auto-responder you are not serious about building an income online.  Tough words, but I will stand by them because my experience in this business tells me that it’s true.

You cannot afford not to have a good follow-up auto-responder.  It is a fundamental, must have tool for any online business.

You could go for a free auto-responder service, but it will be expensive once your list begins to grow- which it will if you do it right.  If you go free you will definitely regret it later.

The best auto-responder service that I know of right now is RocketResponder.  It is so simple to use that you can have your first list set up in just a few minutes.

RocketResponder will let you have as many lists as you want and as many subscribers as you wish for just $20 a month.  That’s about 65 cents a day and you even get your first month for free.

So if I had to cancel all of my subscriptions except one, everything would go except my RocketResponder account.  I would even shut down my traffic exchange rather than cancel my auto-responder subscription.

So there you have it.  Your one must have online business tool which you can never be without is your follow-up auto-reponder service.

Why Not Use Some Text Ads?

Text ads are possibly the oldest form of marketing other than the spoken word.  However most marketers disregard these as a waste of time.  I believe this is a mistake.

Text ads are highly effective if used wisely.

It’s true that text ads are not often clicked, but they are being looked at every day by thousands of people.  Therefore they are perfect for branding.

Don’t worry about the clicks just use them to show your name, your tag-line and, if you are a program owner, the name of your program.

This will drip feed your branding onto people in a polite non-obtrusive way and will reinforce your other marketing efforts.

When you do get a click, take them to your blog, your twitter profile or even a sign-up form for your mailing list so they can get to know you even better.

They are amazingly easy to set up and most programs are giving them away in abundance, so it truly is simple, free advertising.

 

My New Traffic Exchange

I haven’t been updating my blog for a while because I’ve been working on my Traffic Exchange which launches on Saturday 1st November.

It is a paid only TE, but free members are welcome and can advertise – I guess that sounds a bit strange as to my knowledge it’s not been done before.

Of course the best results will be for paid members. You can be a paid member for as little as $2 a month.

Members can collect CTP badges and a prosperity coin every day, and the Excited Brit badge which is available one time only here on my blog can be collected daily by upgraded members.

So come on over to World Wide Traffic Exchange and see what it’s all about. you won’t be disappointed.

A Generous Traffic Exchange

Yesterday I discovered a traffic exchange which is extremely generous to it’s members.

This TE is offering 400 credits per month to free members!

It also has a surf ratio that starts at 0.5:1 and increases each 50 clicks.

Generous isn’t always as good as it sounds

Offering free credits each month encourages people to join (over 700 members in this case) but it doesn’t encourage people to surf.

If few people surf, all those free credits are not used up which causes members to surf even less.

The TE owner has to encourage surfing somehow.

Offering a better surf ratio or credit prizes won’t work as members already have an abundance of credits.

So the only other option I see is to offer cash prizes for surfing.

In order to offer cash prizes there needs to be cash available, so it is important to sell upgrades and advertising.

However few people will want to upgrade or buy as they already have an abundance of unused advertising.

This shows the importance of TE owners balancing the credits earned with credits used.

I like to encourage TE owners and I would be very happy to help and encourage the owner of “A Simple And Fast TE”, especially as the owner is generous and clearly passionate about helping people promote their websites.

Unfortunately this particular TE has been founded on a poor business model and considerable changes would need to be made to make it successful.

So Should You Join?

Well you won’t get a lot of traffic as delivery is very slow, but you will get some traffic and with very little if any surfing.

I joined out of curiosity. I’m pleased to be a member and I’m happy to get my websites seen by a small but potentially new audience. I will also be doing a small amount of surfing from time to time to see what is being advertised.


Claim Your Copy Of the Traffic
Exchange Owners Hand Book



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In What Ways Can I Earn Money?

I have been asked another question:

“In what ways can I make money?”

This is a very good question that usually receives a very poor answer.  Many affiliate marketers when asked this question will reply with a link to their latest program.  That isn’t really an answer; it is just promotion and very bad and misleading promotion at that.

In any business you make money when somebody pays you for a product or a service.  In affiliate marketing the same rules apply.

Affiliate marketers make money by promoting paid programs, upgrades and digital products.  When people buy, commissions are earned.  If nobody buys, no money is earned.

I know you can earn a few cents here and there by surfing, but you have to do a huge amount of surfing before you will even reach a payout threshold.  You need to ask yourself how much your time is worth.

If you are serious about making money in this industry then you need to recognise that you are running a business.  A business involves your time and also some financial investment.  Thankfully the financial investment is tiny.

Internet affiliate marketing is the cheapest way that I know of starting your own business.  However, a low priced start up doesn’t mean the rewards are low.  This industry can be financially rewarding if you do things right.

So the answer I would give to this question is:

Find something to promote.  Ideally it should be something that is only available by paying for it.  (You are unlikely to make much money, if any at all, by promoting free stuff.)  Pay for it yourself and get to know the product thoroughly.

Start learning how to promote it effectively.

When you are able promote one product well and start earning money you will be able to extend your range to other profitable products and services.

Eventually you might like to take the option to create your own product and become a program/product owner.