7 Steps to Set Financial Goals for Your Online Business
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Title: 7 Steps to Set Financial Goals for Your Online Business
Word Count: 1060
Author: Peter Dobler
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7 Steps to Set Financial Goals for Your Online Business
Copyright 2006 Peter Dobler
Every internet marketer wants to make as money as possible.
But how much money do you really need? What are the
financial goals you want to achieve with your online
business? These are the fundamental questions you have to
answer when you start an online business.
Like many others you probably stumbled into the demanding
task of managing an online business by accident. You bought
some ebooks, signed up for multiple affiliate programs, set
up your own website, subscribed to several membership sites
and at the end of the day you realized that this all costs
a lot of money.
You are in desperate need of more income from your
business. Common sense tells you that you need to advertise
for your business. So you go out there and buy any kind of
advertising. This leaves you with even more expenses and
like many others not much to show for.
Now you are at the turning point. You have substantial
expenses, but not enough earnings to support these
expenses. The foolish continue what they are doing and hope
for the best. Thereís a better way to get your business
finances under control. The following 7 steps should give
you an idea how to straighten out your business finances
and how you can prevent a financial Waterloo for your
1. Create a business plan.
This sounds like a broken record, but without a clear
business plan you are setting yourself up for disaster. A
business plan can be as simple as a few pages describing
what you want to do, how you want to do it, how much profit
you plan to make, how much money you have to begin with and
how long you can survive before you run out of money or you
break even with income and expenses.
The idea of a business plan is not to predict the future,
but to create a roadmap for yourself, in case you get lost
on your journey and need directions to save your business.
2. Separate your finances
It doesnít matter if you operate your online business as a
real incorporated business or if you just want to test the
waters. Mixing your business finances with your personal
finances is a bad idea period. Create a separate checking
account. Use it to deposit the checks you will receive and
as the linked account for your business PayPal account.
Yes, a separate PayPal account is necessary to track your
business finances and to provide a more polished,
professional image for your business.
If you donít have a separate credit card for your business,
use one of your personal credit cards and use it for your
business expenses only. This way you can easily track your
expenses. Knowing the exact financial situation of your
business is vital for your survival. If youíre loosing
money you need to know right away to make necessary
adjustments and if youíre making money you donít want to
wait until tax time to get a rude awakening.
A rule of thumb is to reinvest 75% of your earnings back
into advertising for your business. In the beginning it can
be as high as 100%, because you need to get the word out.
Without customers you are not making any money. You do know
that an online business is by definition a sales business?
You are selling either a product or a service. If you
donít, you donít have an online business.
Of course a startup online business has no income to be
reinvested. However the same rules apply to the startup
capital that every new business needs to get started. A new
computer and a fancy new car wonít get you any new
customers, but good advertising will.
4. Keep track
You need to know where you spend your money at all times.
In order to do this, a simple spreadsheet will get you
started. Later you need a little bit more help from a
professional finance program. Either way this will keep you
on track with your spending and you will know how well
youíre doing at all times.
Keep track of your advertising. You need to know if your
advertising is working or not. Like a real store you need
to know why a visitor entered your store and if they donít
buy get at least their contact information. Hardly anybody
sells to first time visitors. Repeat business from visitors
and customers are the bread and butter for any online
This is not only for tax purposes, but you need to organize
everything youíre doing with your business. Nothing kills
your business faster than not knowing what pays your bills
and to whom you owe money. Imagine you forget to renew your
domain name registration. A few bucks could cost you a
million dollar business. So do yourself a big favor and get
organized with your business.
Readjust non working advertising immediately. If it is not
working, dump it. On the other hand repeat a profitable
advertising campaign. Rule of thumb, if it brings in more
money than it costs to run, keep doing it. This seems to be
a simple rule, but many online business owners simply
ignore this rule. Instead they are chasing the white
elephant and end up with nothing to show for.
If you have a successful advertising campaign, keep it
running and build a new campaign next to it. Never drop a
profitable campaign, always expand. This is your safety
net. In case the new campaign fails. In marketing thereís
never a guarantee. Be creative, track and repeat. Thatís
the only way to get something going.
If your business is not growing your business is dieing.
Unfortunately this is reality in todayís business world.
This means that you need to adjust your financial goals for
your business to allow for expansion. Consult your business
plan to determine what went well and what went wrong.
Whatever you do, always aim higher.
There you have it, 7 steps to set the financial goals of
your online business. I know that it takes more than
filling out a membership application to run a successful
online business, but you can do it if you keep these steps
About the Author:
Peter Dobler is a 20+ year veteran in the IT business. He
is an active Real Estate Investor and a successful Internet
business owner. Research online business ideas, collect
free software and download bonus content for your own web
site at www.online-business-idea.com