Online Business Money Managementby Gorav H. Digital Marketer and Pro. Blogger An online business can be a rewarding opportunity. If you put in the effort, you can create a substantial cash flow and build your business accordingly. However, one thing that many Internet entrepreneurs miss out on is the benefit of a good business plan.
A business plan helps outline both the income stream and the costs associated with running your venture, be it online or in a brick and mortar setting. Creating a business plan also helps you establish goals and lets you see how profitable your online business really is.
If you’re running your business from home, your expenses might be quite small. However, you still have the price of your Internet connection, possible repairs to your computer, hydro and any advertising or marketing you may engage in for your business.
Listing your expenses and breaking them down both yearly and monthly gives you a better understanding of how much revenue you need to generate just to cover the cost of running your business. Wages are also an expense, so if you need a regular income, you should include your weekly or monthly wages as an expense your business must cover.
Revenue projections are how much money you intend to earn each month and year to cover the expenses of your online business. Anything in addition is profit. When calculating your projected revenue, it’s important to factor in the full year, so you can have a carry-over on lean months.
Make sure you include all sources of revenue for your online business. If you primarily sell products or offer services, but also have some Google ads or affiliate links on your site, include these in your revenue projections.
Creating a Positive Balance:
In order to understand whether or not your online project is actually profitable, you can look to the yearly totals for expected expenses and revenues to see if your business comes out on top. It could be that you need to work on tweaking areas of your model to make it more profitable.
Expanding residual income streams, such as Google ads might be enough to boost your bottom line. Perhaps the cost of advertising is low enough that increasing it will help you earn more money. You must also account for the time you spend working on your project.
A business plan can be modified and adjusted as you grow and expand your business. Basically it’s a money management guideline to keep you on track and focused. It will help you keep track of goals and make sure you are implementing changes to your online business on schedule. For example, being a month late setting up a new marketing plan will decrease your expenses for that intended month, but also affect your projected revenues.
A good business plan does not need to be complicated. However, the more details you include, the more effective it is. You can expand on different areas, making notes about the amount of man-hours you will need to put in to reach a specific target and the anticipated outcome. Therefore, if your actual business performance isn’t keeping up with your original business plan, you can take steps to correct it before your project starts incurring losses.
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Created on Sep 11th 2017 08:34. Viewed 302 times.
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