How to Think About Business Expenditure
A client recently asked me the following question, and I’m reprinting it (expanded a little from my original email answer) here with her permission. This is an issue that we ALL have to deal with – “How much should I invest into different areas of my business?”
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One thing I would like to know is what percentage of your money received from your business should go to what? For example, after you pay your recurring bills, what percentage should you set aside for marketing, for continuing education, and for taxes and for yourself to use as income for your household. I don’t know if there is a definite answer for this but some sort of guideline would be great so that I can create good money habits.
Here is what I replied:
I’ve heard a lot of numbers tossed around, like 20% of profit goes back into marketing, you should be spending around 10-20% on education, (I think those were the figures) but to be honest it’s a very individual decision.
Ideally you should have a budget forecast as part of your business plan. In an ideal world that would happen, and you’d stick to it and/or have more profit than was forecast and less expenses. But we live in the real world where things are neither so simple nor so black and white.
Some questions for you to consider:
How is your household budget? If you’re scraping to have enough to pay for groceries then that’s where your business money is going to go. Even though they’re in separate accounts, (you DO have a separate business account, don’t you?) if you’re struggling financially then that’s what you’re likely to spend it on. Your money habits in your personal life will be the same as your money habits in your business.
When that’s sorted out:
Assuming your personal household budget is in good shape and you’re not scraping from week to week:
How much do you have to put aside for GST/VAT or other taxes? Put it in a separate account until you have to pay it. Put away more than you think you’ll need and for heaven’s sake don’t touch it for anything else. The ATO/IRS/whatever your country’s tax office is called will chase you down and make your life h**l if you are short on your taxes.
Make sure you have enough aside to pay any ongoing costs such as stationary, coffee with clients, website hosting, phone or fax accounts and any other recurring type expenses. Put that away as well in a separate account if you can – you don’t want to have a hundred different accounts but a tax account, a bill-paying account and a general business account are fine to manage.
Then it’s the hard decisions – the how much do I put into marketing, education etc.
Depends what you need
Does your marketing plan include a lot of costly advertising? Marketing will be higher. Is your marketing plan mainly free stuff online? Much lower cost. You don’t HAVE to put a lot of $$$ into your marketing, there are ways to market for free or low cost. However, for some types of businesses, they need to be advertising etc.
Only you can say how much your marketing budget should be. Time wise, you should be putting as much time and effort into marketing as you possibly can.
Education is the biggie for most businesses, WAHM or not. You could spend thousands and thousands on education and not bring a single extra client in.
This comes back to your long term plan for your business – where do you want it to be in one year, three years, five years? What do you need to learn in order to get there?
What skills do you need that will increase your value to clients? Will those skills justify the cost? Are you in the catch-22 of needing a skill to make money, but can’t afford to pay for the course? (time to drink the cool-aid and sell the kids)
Also, you can’t forecast a lot of what you’ll need to learn because technology changes so fast. You may have to pay to keep current, you may be able to find it free. But there’s no point thinking that you’ll decide everything as you go along, you have to have somewhere and something to aim for so you have a measuring point to aim at to decide if a particular skill or course will help you or not.
Everyone’s answer is individual
It really comes down to a combination of your personal situation, your goals for yourself and your business and what you’re doing at the time. There’s no definitive answer that suits all businesses and business models.
I sent this to her with the comment “I hope this helps” and she replied back “No this didn’t help at all. You are suppose to say you have to do X Y and Z. Just kidding, this was very informative actually. The best information I’ve received so far on searching for answer to this kind of question.” LOL.
The Basics of a Good Blogsite – Part Two
Last Tuesday was part one of Basics of a Good Blogsite and today I give you Part Two.
1. Don’t make your visitors think. When a visitor lands on your site they should NEVER wonder
- What’s this site about?
- Where do I go?
- How do I find things?
- Where is …?
- What’s that…?
Make everything on your site clear, simple and easy. Tell visitors where to go and what to do. “Click Here”, “Buy This”, “Subscribe Here”, “Now Read This”. And try to keep down the number of clicks the visitor has to make. There are some statistics floating around that say you lose 7% of people for every click they have to make. Based on my own experience and anecdotal evidence, I personally think the percentage may be higher.
2. Check Your Spelling. Personal rant coming up! I detest sites where there are spelling and grammar mistakes all over it. I know that mistakes creep in, and there are probably one or two on my own site, however I have seen websites and blog posts that are full of them. It’s unprofessional and shows a level of disinterest on the part of the business owner. It’s distracting to the reader.
Every computer has a spell checker – use it. Then proof read for words that are spelled correctly but out of context, ie: check correct usage of words like ‘your’ and ‘you’re’. The spell checker won’t pick them up because they are spelled correctly, however they are the wrong word to be used there.
If you know your spelling ability is lacking, ask a friend to read over your work first. Some mistakes will always get through. Correct them when you find them, don’t stress too much over them, however don’t send out any mistakes that you could have prevented.
3. Keep Statistics. Ok, I know this isn’t something that visitors will see, however it’s really useful for you. Have a look at this recent post for what and how to measure your business statistics.
4. Popular Posts. As Marc mentioned in his comment on the last post, Popular Posts is a great way to let new visitors know what other people on your site enjoyed reading. I personally don’t use it because of a lack of space in my sidebar. I don’t see it as being essential, however it’s certainly very nice to have. A good plugin to use is Easy Popular Posts.
5. Subscribe to comments. Please, please, please install a subscribe to comments plugin on your site. Nothing is more annoying than being forced to revisit a post to see if anyone has posted a comment after you or answered your comment. I’ve seen this on sites I’ve guest posted on, and it’s really frustrating to have to check it a couple of times a day in case there’s been a comment. I use Tempus Fugit Subscribe to Comments, it works well and I’m very happy with it.
6. Ads – Who are you promoting or selling? Ads on blogs… There’s two things I’m going to say about this:
i) Never advertise someone who sells the same products you do. Why would you send your site visitors to a competitors site? Therefore, be careful of Adsense. It places ads according to keywords on your site – which means that the ads are for businesses using the same keywords as yourself. I’m not saying don’t use Adsense, just be careful of what is being promoted.
ii) Always promote your own products or services first. If you have more than one advertisement then your products and services should be at located at the top. The first ads that a visitor sees.
7. Know why you’re doing what you’re doing. Writing blog posts – why? What purpose are you aiming to achieve with them? Setting up a newsletter list – why? What are you going to use it for? Are you doing things simply because you’ve been told ‘that’s how it’s done’ or do you know your reason behind it? Everything you do should have a clear purpose defined before you start.
Well that’s it for this two part series. Feel free to add your own suggestions for improving or tweaking a blogsite in the comments.
Also, beginning next week, we’ll be back to posting three times a week – Monday, Wednesday and Friday. 
The Basics of a Good Blogsite – Part One
A lot of work at home mums put together their own websites using WordPress, and this is great. Most of the A-lister bloggers I know also use WordPress – you’re in great company! However, there’s so many possible options that you can include on your site. How do you know what to include and what to leave out?
One of the things we’ve been doing recently over on Virtual Coach Forums is website critiquing for people just getting their sites up and running.
I’ve put together some of the basics that need to be considered when planning and setting up your site.
1. Is your website Business or Personal? If it’s a business site, then that needs to be obvious. Your business, what you do or sell, needs to be front and centre on the home page. It is more important that people landing on your page know what your business does than that they read your latest blog post. A good compromise is to have an excerpt of your latest post on the front page if you really want it there.
Include a fantastic tagline in your header, or somewhere very prominent, so a first time visitor can see it, read it easily and know what your site is about.
If your site is a Personal website, then this is not an important consideration.
2. Have your own Domain name. I can’t say this often enough. A .com domain name will cost you around US$8.00 per year to register. It gives your business credibility, increases your search engine ranking, brands you. Using free sites such as blogspot or wordpress.com actually costs you money. The site and hosting may be free, however you are paying for it as you lose customers. It looks amateurish and unprofessional, don’t do it. This is a post I wrote several months back on the advantages of having your own domain name.
Same goes for hotmail and yahoo free email addresses, don’t use them. Gmail is good, but that’s the only one. If you’ve got a freebie site and freebie email address you’re going to look like a fly-by-night business who may not be around for the long haul.
3. Recent posts. Have only five to seven (preferably only five) posts showing in your recent posts. Any more and a visitor is given too much choice and it takes up too much space. The top of your sidebar is prime real estate, use it well.
On a related note, limit the number of posts to only having two to three posts showing on one page. It saves time when loading up and makes reading easier if the visitor doesn’t have to scroll through twenty screens to read your posts.
4. Get rid of the clutter in your sidebar. In the same vein, get rid of any clutter in the sidebar. Your site needs to be easy to read, not have the visitors eyes pulled every which way and distracted. Blogrolls, Tag Clouds, Calendars, twitter updates, if they’re not adding particular and measureable value to your site then get rid of them. They provide a distraction to someone browsing your site.
If you have two sidebars (three column theme) be very careful what you put in your left hand sidebar. Search engines read from left to right and give more importance to those things it reads first. So if your left hand sidebar has your twitter updates, the search engine may rank them as being more important than that beautifully written, keyword rich blog post you have there.
For myself, I prefer sites with only a right hand sidebar. I find them easier to read and find things. When a person looks at a page or a website, their eyes move in a Z fashion. There’s a saying that a confused mind will always say no. By keeping your sidebar clean and simple visitors are more likely to stay and keep reading and looking around.
5. Navigation. K.I.S.S. Keep It Simple Silly. Have your navigation organised so the more important pages are listed on the left and least important on the right. The exception to this is your Contact page (yes, you MUST have a contact page.) which is generally on the far right. Label your pages with easy to understand names, easy for first time visitors to understand that is.
Whatever you do, don’t use Flash or Javascript for your navigation. More and more people are using Adblock, pop-up filters and the like, plus the vagaries of all the different browsers. A lot of people cannot see javascript or flash without changing their security settings. If your navigation is in javascript then they can’t see anything beyond the home page. Bad move….
6. SEO. SEO is an ever changing beastie, the bane of all business people and pretty much anyone who is not an SEO expert. Here’s a series of blog posts on SEOwritten by a friend of mine, Marc Pieniazek who is an SEO copywriter. If you want to do your own SEO and want a brilliant step by step guide to SEO at an affordable price (US$39.00) and that has been written for small business owners, then buy Naomi Dunford’s ebook Ninja SEO School. It’s a great ebook. I’ve got it, use it, and highly recommend it.
7. RSS. There’s a couple of things I’d like to say about RSS. First up, please, please, please, offer an email option for people to sign up for. A lot of people don’t like using web-based Readers and prefer an email option.
Use Feedburner to disseminate your RSS. It’s very efficient, it’s free, you can optimise it with your branding and it’s easy. I’ve written about RSS before, about using RSS to keep readers updated and also about branding your Feedburner RSS emails
Send your feeds as a full post, not an excerpt. People are basically lazy and normally won’t click through to read a full post. Make it easy for your readers, don’t make them work for the information. If you’ve gone to the effort of writing a post, full of useful information for your readers, make sure it gets to them. Don’t waste your efforts by depending on readers to click through to read it.
8. Remember that not everyone has adsl or high-speed internet. There are actually people in the world who are still on dial-up. I know…, it sounds unbelievable. But trust me, there really are people who are still on dial-up. Don’t load your pages up with huge graphics, keep your posts down to a reasonable number. If you have a lot of graphics use thumbnail images for faster loading.
Forget about using Flash on your site. It uses up a lot of bandwidth to download and search engines don’t consider it. Same with video and audio. I’m not saying don’t have them on your site, just don’t have them auto-playing when a person lands on the page. Give the person a choice to listen/watch.
Making Your To-Do List a Habit
Last week we talked about your To-do list, Coffee and Rocks – fitting in the truly important items so they get done before the less significant items.
Getting things done is a habit, and so is prioritising what is the most important thing to work on first. When our to-do list is too long, it unintentionally becomes a habit not to finish the list, and then not to finish all the way through something on the list that we’ve started.
There’s also the small matter of what do we work on first. This one is actually fairly easily answered: What’s most important? What will have the biggest effect? or, What will bring in money the fastest? Answer these three questions and you should have a good idea of what you need to be working on first.
Firstly you need to realistically work out how much time you have available that day. Then grab a blank sheet of paper, and look at your long, overwhelming to-do list. Ask yourself those three questions until you have enough tasks to fill the time available – preferably with a bit of time left over because projects have an inherent tendency to expand and take more time than we thought.
Then simply start working on the first priority on your list and cross it off when it’s totally completed. Take a short break and then move onto the next item on your list. If you’ve estimated your time and tasks realistically, you should have enough time to complete everything on your list.
When everything on your list is fully done, look at your list and allow yourself to feel pride that you completed everything you set out to do. This is important. You’re building a habit of getting tasks completed and you need to acknowledge yourself for achieving that.
This is the time that someone generally asks “What about everything else on the list, that’s important too!” Yes, I agree that it’s important. Ask yourself this “If you hadn’t set priorities before working, would you have done everything on your list anyway?” The answer is invariably no, because we never actually complete our list – because it’s too long, doesn’t take into account the time available or what is most important.
By prioritising what is most important, you’re choosing to work on those tasks simply because they are the most important. When our to-do list is pages long we feel overwhelmed and tend to start work on the most fun items, the easiest items or the fastest items. These are not necessarily the most important or the one’s that will bring in money the fastest.
Getting back to the habit. If you follow this process each day – or the night before ready for the next day – then you are setting yourself up to succeed. Every day that you complete your list and allow yourself to feel that pride in achievement you reinforce the habit, you make it stronger and you increase the chances that you’ll do the same the next day and the next day and the next.
Habits generally take about twenty eight days to become ingrained, and that’s when you’re reinforcing them seven days a week. Since I don’t recommend working every day, you need to set up some kind of daily reminder to write your day’s priority to-do list. I use the calendar on my Outlook to throw up a reminder first thing in the morning. Whatever works for you is good. A post-it note on your bathroom mirror is fine as long as you see it!
Are you working on what’s most important for you right now?
Your To-Do List, Coffee and Rocks
Hands up everyone who has a to-do list, be it paper, electronic or in your head? If your hand isn’t up then you’re kidding yourself. We ALL have a to-do list of some type. Hopefully it’s not actually in your head, because that’s a guaranteed way to drive yourself crazy. Whether you use paper or some form of an electronic to-do list, anything from Outlook, a PDA, your iphone, whatever, capturing your tasks and getting them out of your head is important.
Now that we’ve established the fact that everyone has a to-do list, hands up anyone who ever fully completes it and has NOTHING to do? I’m guessing there’s not many hands up there. If you’re running your own business, the chances are that your To-Do list is about three pages long, in size 8 font. It’s a long list, yes? Now here’s the bad news. You’re never going to complete it.
The solo entrepreneur typically has a busy and creative mind, which is a blessing and an enormous asset. And that creative, innovative, interested mind is always busy thinking up new ways to work, things to do, products to create, website tweaks to make, emails to send. It’s doing what it does best, creating ideas.
And like good little people we write it all down on our to-do list. And the list gets longer and we try and cram more and more into our day until our health suffers, our brains are tired, our bodies are tired and our families don’t know us any more. Not good.
We need to realise that we can’t do everything. Not everything that we write on our to-do list truly needs to be done. Some of it can be delegated to a VA, if that’s what you want and/or need. However a lot of items on your list are going to simply fall by the wayside.
I’ve heard the story of a college professor who stood in front of his class with a large glass beaker. He filled it with large rocks and asked “Is it full?” The class agreed that it was. He then poured in gravel that filled in the spaces around the large rocks “Is it full now?” he asked. “Yes” the class agreed again. The professor then poured sand into the beaker, which filled in all the tiny spaces around the gravel, and once again asked “Is it full?” “Oh yes, it’s definitely full now”. However, the professor then picked up a jug of coffee, and poured that into the beaker. The coffee filled all the gaps and filled the beaker to the brim. “Now the beaker is full” he said.
The professor’s demonstration was to show that we can fit a lot into our lives, as long as we choose to fill our time with the important things – the large rocks – first. Tasks of secondary importance then fill around the rocks, and the sand, the ‘nice to do but not essential tasks’ fill in the rest of your time.
One of the students asked the professor about the coffee “Ah” he said with a smile “That’s to remind you that no matter how busy you are there’s always time for coffee with friends.”
Decide what is your priority – what’s your current essential tasks and projects – and work on them first. Fit the rest of your to-do list around them. Then enjoy your coffee.
If you’re after a system of organising yourself and tasks that really works for the creative entrepreneurial mind, then I recommend you check out Todoodlist which is simply one of the simplest and best organising/to-do systems I’ve ever seen. Unlike all the thousands of complicated systems that cost a fortune to set up and are so complicated you’ll never use them, Todoodlist is simple and easy to use. With a pencil. Click the graphic below to read more.
Next week we’ll chat a little about training yourself to finish things, and choosing what to do next.
Hands up everyone who has a to-do list, be it paper, electronic or in your head? If your hand isn’t up then you’re kidding yourself. We ALL have a to-do list of some type. Hopefully it’s not actually in your head, because that’s a guaranteed way to drive yourself crazy. Whether you use paper or some form of an electronic to-do list, anything from Outlook, a PDA, your iphone, whatever, capturing your tasks and getting them out of your head is important.
Now that we’ve established the fact that everyone has a to-do list, hands up anyone who ever fully completes it and has NOTHING to do? I’m guessing there’s not many hands up there. If you’re running your own business, the chances are that your To-Do list is about three pages long, in size 8 font. It’s a long list, yes? Now here’s the bad news. You’re never going to complete it.
The solo entrepreneur typically has a busy and creative mind, which is a blessing and an enormous asset. And that creative, innovative, interested mind is always busy thinking up new ways to work, things to do, products to create, website tweaks to make, emails to send. It’s doing what it does best, creating ideas.
And like good little people we write it all down on our to-do list. And the list gets longer and we try and cram more and more into our day until our health suffers, our brains are tired, our bodies are tired and our families don’t know us any more. Not good.
We need to realise that we can’t do everything. Not everything that we write on our to-do list truly needs to be done. Some of it can be delegated to a VA, if that’s what you want and/or need. However a lot of items on your list are going to simply fall by the wayside.
I’ve heard the story of a college professor who stood in front of his class with a large glass beaker. He filled it with large rocks and asked “Is it full?” The class agreed that it was. He then poured in gravel that filled in the spaces around the large rocks “Is it full now?” he asked. “Yes” the class agreed again. The professor then poured sand into the beaker, which filled in all the tiny spaces around the gravel, and once again asked “Is it full?” “Oh yes, it’s definitely full now”. However, the professor then picked up a jug of coffee, and poured that into the beaker. The coffee filled all the gaps and filled the beaker to the brim. “Now the beaker is full” he said.
The professor’s demonstration was to show that we can fit a lot into our lives, as long as we choose to fill our time with the important things – the large rocks – first. Tasks of secondary importance then fill around the rocks, and the sand, the ‘nice to do but not essential tasks’ fill in the rest of your time.
One of the students asked the professor about the coffee “Ah” he said with a smile “That’s to remind you that no matter how busy you are there’s always time for coffee with friends.”
Decide what is your priority – what’s your current essential tasks and projects – and work on them first. Fit the rest of your to-do list around them.
And enjoy your coffee.
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The web's business planning expert - just for work at home mums. Together we'll find the time for you to make money.