One of the biggest differences between online and offline business owners that I have noticed is financial planning, or lack of it in the case of an online marketer.
Whenever anyone starts a business offline, there is always a significant amount of financial planning. How much capital are you investing? What are your monthly running costs? What are your initial outgoings? What will your monthly income be? How much money do you need to borrow?
All of this is vital information because it is more than likely you will either be investing a significant amount of your own capital in your business or borrowing money to get your business started.
Online though, financial planning seems to go out of the window with starry eyed dreams of instant riches and mountains of wealth available to anyone who can upload a website.
Sadly, most of these dreams are quickly dashed on the rocks of reality when they realize that they have spent tens of thousands of dollars and had no return. Debt has a habit of making you see reality very quickly.
Whenever I coach anyone in their Internet businesses, I always stress the need for financial planning. I want you to imagine it now in bright red 72 point bold letters flashing in front of you with dancing elephants pointing at it, “Make A Financial Plan”.
Unless you are extremely fortunate, you are not a bottomless pit of money. Even if you were, there would come a time when you would stop pouring money into a project and cut your losses. You, like the rest of us, have a life in the real world and need to pay for food, a roof over your head etc.
In order to continue to do this, it is vital that you create a financial plan for your Internet business. You must ask yourself questions like:
“How much start-up capital do I have?”
“How much do I need to spend to start-up?”
“What is my monthly budget for my Internet business?”
“What are my monthly running costs?”
And so on. When you understand these, so you can begin to budget your expenditure and make purchases. If you can only afford to spend $50 a month on your business without struggling financially, then there is no point signing up for every flash service in town and having to find $357 a month to pay for them.
If you only have $500 to start up your business, it’s pointless spending $5000 getting a product and website designed.
If you do not understand how much capital you have to invest and how much you can afford each month, then your business is sadly doomed to failure and to burn cash endlessly. Budget and plan and you have a much greater chance of success.