This is something a little different…So far, I’ve published 20 monthly income reports, and 1 annual income report. However, I’ve never posted anything in detail about my expenses, until today.
I don’t know exactly why I have never included them in my reports. Maybe it’s because when I first started doing these reports there were virtually no expenses to take into account. That being said, I do know that many of you are curious to see what a typical month looks like, so here it is.
The following is my expense report for June of 2010.
Standard / Flat Monthly Fees For Doing Business Online
These are fees that I incur each and every month, independent of how much I actually earn, or how many items I sell.
Hosting & Domain Fees: about $20/month
Using the hosting and domain services from Bluehost, I have a couple of accounts under the $6.95/month plan, and a number of sub and add-on domains that don’t even work out to a buck a month ($10/year, or $0.83/month).
Email / Autoresponder Fees: $66.15/month
A 12-month package from Aweber costs me $193.80, which comes to about $16/month. An extra $50.00 a month is added on because I have email lists that total between 5,000 and 10,000 people.
Shopping Cart Fees: $35/month
These fees are flat monthly fees for the tools I use to make automatic transactions happen with my eBook at greenexamacademy.com. E-junkie costs me $5.00/month, and Paypal’s Website Payments Pro is $30/month.
Side note regarding Paypal’s Website Payments Pro: I do understand that I could instead use the standard paypal checkout method for absolutely free. That will allow me to accept credit cards as payment for my e-goods, however, there are two major problems with the standard checkout method:
- When customers click on “Pay Now” or “Buy Now” (or whatever call to action you use), they are taken to Paypal’s website. Here, they can log into their Paypal account, or pay with a credit card. The thing is, the link to pay with a credit card is tiny and almost hidden, which forces a lot of people to think they need a Paypal account to purchase the product. Those who don’t have a Paypal account are more than likely to leave. Not cool.
- Secondly, the transaction happens off of your site. The customer actually leaves your site and is taken to Paypal’s payment processor. E-junkie allows the transaction to stay ON your site and include a little bit of branding during the checkout process at the same time, which is very nice. The more you zig and zag your customer around to different sites, the more chances there are of that person leaving with an incomplete purchase. Not cool either.
Online Media Storage Fees: $12.00/month
I use Libsyn to host my media files online, such as my podcast, my webinar replay, and actually my eBook as well. This ensures that my blog server won’t crash if there’s a sudden rush to download certain pieces of media, which I hear often happens, especially when new podcast episodes or new videos are published on the blog.
I looked at Amazon S3 for an online storage solution, but I felt more comfortable dealing with the flat rate from Libsyn, then with fractions of a cent per gig of bandwith transfer with S3. it’s much easier to budget for.
TOTAL FLAT MONTHLY EXPENSES: $133.15
And just as an aside, if you’re just starting out, you don’t need all of these things right from the beginning. You can host your media files on your own site, and if you’re worried because you want to do a lot of videos, host them on YouTube instead. It’s free, and you can get search engine traffic off of YouTube as well.
Also, you don’t need the shopping cart fees either. Like I said, there is the option to go the free route with Paypal, and really if you’re just starting out, you should worry about your content and building an audience, rather than how to make a buck from an audience you don’t have yet.
All this being said, it only takes a couple of eBook sales, or just one affiliate commission on some certain products to make up the entire flat monthly expense.
Standard / Flat Fees For Business Improvement (In General)
The following fees are all fees associated with things that can help my business even further. You don’t have to spend money on any of these things, this is just what I do – which you’ll see why below.
Bookkeeping Fees: $50.00/month
When I started to make good money online, I hired a bookkeeper to help keep track of all of my monthly income and expenses, and input them into Quickbooks. This is probably the best $50.00 I spend every month for my business.
Because my bookkeeper makes my life SO much easier. All I have to do is send her my files from my business checking account, my business credit card, and my paypal and shopping cart – and she does the rest. I spend about 5 minutes a month doing this, and I have numbers every month I can look at in Quickbooks to see how my business is doing. Oh, and this makes tax season seem like a walk in the park.
Because I have a ton of different income streams, it would seriously drive me insane to try and do all of this myself.
Certified Public Accountant: about $35/month
My CPA helps me with all things financial, including where to put my money as well. I’ve saved a lot of money thanks to my CPA, so the cost of such a service is definitely made up in the savings.
Internet Business Mastery Academy: $97/month
I joined the IBM Academy nearly 2 years ago, and I continue to pay my dues because I still continue to learn from it.
I have other fees in addition to the services mentioned in the previous sections. These fees, however, vary each month, but I just wanted to list them here so you know what I could be paying for. The fees that you see next to the item was how much I spent in June of 2010.
- The cost of hiring virtual assistants: $149.90
- The cost of developing iPhone applications: $700.00
- The cost of a piece of software for my business: $0.00
- The cost of new equipment that I can use for my business: $0.00
- The cost of memberships for something that I can use for my business: $103.00
- The cost of utilities because I do business from home: $23.54
- Paypal fees (they take a certain % of total cost of each product sold): $103.90
- Google Checkout fees (same as Paypal): $8.65
- Payouts to Affiliates: $450.00
I may have missed a few things, but I think I have most everything here.
In total, the expenses I incurred for June was about $1,853.24.
It’s kind of weird to look at my expenses, because $1,873.24 is a lot of money, and when I first started out I would never have fathomed spending that much on my own business in a single month. But, my experience over the past 2 years tells me that this is money well spent, and you can’t just look at the expenses alone without understanding why these expenses exist.
Also, you have to consider that I grossed about $13k in June and many of these expenses exist because I am making this kind of money. For example, the Paypal and Google Checkout fees, as well as the payouts to the affiliates – if I didn’t make any money, these fees would not exist.
Additionally, as I mentioned earlier, a lot of these expenses are not mandatory in order to run a successful online business, so don’t be scared of the total expense. I choose to pay developers to create new iPhone apps and I choose to pay for memberships that may help my business, because they are investments that will pay off for me in the future.
I hope you enjoyed this post and it helpful as you got an even closer look at what goes on in my businesses.
Lastly, if you haven’t already done so, please check out my podcast which is now live in iTunes! Ratings and reviews help the rankings, so thank you in advance!
Have a great weekend everyone!