How to Budget For Internet Marketing Tools Services and Products
Several years ago my father went into the retail shoe business by purchasing an existing shop from a man that had lost a ton of money gambling. He really lucky to know one of the best CPA’s in the region. While he was setting up the company and accounts for his new venture, this genius of accounting sat my father down and shared a secret with him.
“John” he said, “there is a very specific formula to ensure the success of any business, large of small and I want to share it with you now…”
My Dad was thrilled! Here was a man that had been involved in all sorts of businesses for his entire career, and he was about to share information with him that CEOs paid him big bucks for as a consultant! So he sat down, and pulled his chair up to the CPAs desk and got ready to take notes. This amazing businessman waited until my Dad was set, and was paying rapt attention to the word’s of wisdom that he was about to impart. Then he said:
“John for any business to succeed THE INNIES MUST EXCEED THE OUTIES…”
And then he leaned back in his chair done with what he had to say.
If you haven’t figured it out yet, you could bankrupt Halliburton buying all of the bells and whistles and chimes and foghorns available under the innocent little heading of Internet Marketing Tools. First last and always Internet Marketing is a business. In order to succeed in this business you have to make more cash than you spend. Yes: THE INNIES MUST EXCEED THE OUTIES!
There are enough educational programs out there selling in the neighborhood of two grand that you could spend more than your average salary just on those! A lot of the information found in these high priced courses can be found for free in forums and in online communities. Am I saying the information in these isn’t worth the price you pay? No, but I am saying that it may not be a good idea to pay for these out of pocket until your online business is able to foot the bill.
Yep, what we are talking about here is budgeting the cash flow of your online business. You need to have a monthly budget written down that spells out exactly how much you pay for each of the expenses your online business has.
Mine has three sections. One of them for the expenses related to my websites themselves. The second one is for the Internet Marketing Tools and Advertising costs to promote those sites. And the last section is for educational expenses to expand my knowledge base and skillset.
Each item in the first two sections are fairly easy to justify financially. Some are fixed costs that you can’t avoid, and others will either prove their worth monetarily or will fail to do so and can therefore be eliminated. It is frequently the last category that gets people in this business in trouble.
It is an excellent idea and just good business sense to invest in continuing education for whatever business you are in, and Internet Marketing is no different. What the most successful people in Internet Marketing do is to make this particular area of their budget limited to a specific percentage of their profits.
Please note that I specified profits, and not total receipts. This is an important distinction. If you don’t know what your profit margins are, you need to learn this information and keep close track of it. Why?!
Why, to ensure that THE INNIES EXCEED THE OUTIES!!
Budgeting your Internet Marketing business expenses on a monthly basis is the only way to make sure that it succeeds.
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