Why you should treat your business like one

This post was written in La Defense, France’s business quarter (Pic by Bertranddo)

Internet marketers (IMers) are an odd group of people. Outside the IM world nobody truly gets what we are doing (did you ever try to explain IM to your friends?).  Some of us are millionaires while others are just starting out, but one common trait to all IMers remain: we BELIEVE in the dream that Internet Marketing can bring us true financial freedom.

Entrepreneurs at heart

It came to me that IMers are entrepreneurs at heart, we just don’t understand entrepreneurship (I’ll explain that point in a bit). We start with literally nothing but the belief that it is possible to make money from home, work when we want, and provide for all our friends and family.  And thinking that we can start with little input is the problem, or should I say, the challenge.

The odd thing with IMers is that we believe (or are led to believe) that we can get untold and instant riches, without any considerable time or financial investment. I too believed it at first, but the more I reflect on this business the more I realize that this is a major misunderstanding: nothing is neither easy nor free in life.

That is if you intend to build a real business which will provide for you in the long run of course.

Time, money and the right information


Listen to the companion podcast (pardon me for the background noise, I was attending a De La Soul concert when recording this)

The first two determining factors in making a business work are time AND money.

Time because a great deal of your time should  be spent on strategizing. Do you know what your exact objectives for this new quarter are? Do you know wher your business will be in 2 years time?

Coming up with satisfactory answers to these questions and following up takes a lot of time. You also need to dedicate some of your time to honing your business skills and networking with peers in your industry.

Consulting with financial advisors, incorporating and analyzing your sales volumes are also tasks that only you can tackle.

All this strategic part of your business can not be outsourced or purchased. You are the CEO and it’s your job to make sure that your business has a true purpose, and if you are ambitious enough, outlives you.

The second factor that comes into place is money. You will need some to pay yourself a decent salary, cover your marketing costs and pay your employees, or at first outsourcers.

There are different ways to manage cash flow in your business. You can start with what is commonly called cash from operations (the money your business makes) or with start up capital. Either way you will need to make some sacrifices in the early years in order to get running.

And third, having the right information is what will make or break your business. Actually I would even go as far as to say that the right information is more important than how much time and money you have.

Now having the right information has a cost in our knowledge-based society. You might need to take managerial classes from a local college, or to hire a personal coach to give you directions.

Or if you are lucky, you might know someone in your entourage who has a lot of business acumen. You might want to consult with that person, since the information he or she holds may be incredibly beneficial for your business.

We just don’t understand entrepreneurship

Having specific and realistic objectives is a must.

The problem with IMers in my opinion is that we just don’t understand (nor take the time to understand) what business truly is.

We often have wild dreams about making lets say $2k per month. But do we ever reflect on what does this figure represent for our business and at which point it will be profitable enough to really enjoy this evasive IM dream?

Let’s think about what making $2k a month really means for a second:

——————————————

Expenses

Hosting 10
Advertising  100
Autoresponder 20
Other business apps 50
Outsourcing (articles/graphics/etc.) 200
Salary 1000

Total expenses 1,380

Income
2,000

Balance
$620

——————————————

And these are very conservative figures, we didn’t even take taxes, hiring an accountant, or other costs like renting offices, buying PCs and software licenses etc. into account.

So as you can see just to run that first month of operations it took us $1,380 with a very low salary of $1k/month.

And we usually have to spend money on traffic, outsourcing and our salary upfront to get our revenues to the $2k level. That means we do have to shell out some money and leave on $1k a month for a while… which is not enough to leave the IM lifestyle unfortunately.

And to add to this the proceeds from the first month do not even finance the next month! This means that we are now face to face with a business and we need to start planning out to avoid future disappointments.

A word from Bill (gates)

Bill Gates used to say that he wouldn’t sleep peacefully at night until there is enough cash in his business to finance one full year of operations.

So at this rate we would need about $24k to get this business off the ground and to plan for one year worth of expenses,  unless we focus on extremely high yielding activities.

And even if you are financing your biz with cash from operations, and you make let’s say $10k a month, it will stay take a bit of work (and a great deal of planning) to make your business work in the long run.

So yea, my point is that anyone who loves IM for what it is, the freedom and great lifestyle should take some time off to think about this more like a business and less like a sidekick pocket-money activity.

Treat your business right and it will reward you and your loved ones many time over and for years to come,

To your IM success,
bertranddo

P.S. I’d love to hear from you in the comments. Do you think internet marketing should be treated as a business? Or do you think of it as a simple additional stream of income and that we don’t need to think that far?

14 thoughts on “Why you should treat your business like one”

  1. Hey man great post, I agree with you that we never seem to spend any time treating this like a brick-and-mortar business. But if we really look into it, there are indeed expenses in IM, whether it’s time or money, there is no way around it.

  2. Couldn’t agree more Bertrand. Just because our income is created from online activities, it doesn’t mean that we don’t have to do the real world tasks which any business has to do to survive. You’ve explained this really well for newbies who think there is a quick fix! Great post!

  3. The very best “about” page I have ever seen! What did you use to make it.
    Inspiring site. I receive literally dozens of I.M. emails every day. I only
    open a handful….and yours is one I never miss.

    Thanks again, Phil

  4. “a sidekick pocket-money activity” – sounded very clear on my ear! I can’t agree less with you Bert. Unfortunately, I am guilty of this too. But it’s time to man-up and take responsibility… that which is worth doing is worth doing well! Thanks friend 🙂

  5. Bertrand, You always give out great information that makes me think what I should be doing. If I am nose to the grindstone working on websites and backlinking then I won’t be able to see ahead clearly enough to make sure it is somewhere I want to end up.
    To set some lifestyle and business goals definitely would help. Time to dig out that copy of “MindWarrior” and actually implement it rather than skim reading it. Hey at least I read it and not just downloaded to sit on my hard drive!

  6. Hi, isn’t the problem that most people do not know how to get organised? It’s like you say you have to treat it as a business but that means getting organised. I struggle with that all the time.
    Derek

  7. Hi Bertranddo,

    Are you certain that picture wasn’t Photoshopped? It’s a beautiful picture, absolutely love it. I couldn’t agree more. I will divulge what I think was my biggest deterrent. “Hope”, yep, that word that is supposed to carry nothing but positiveness in it, hope. I think I just got out and did thing online with the hope that someday things will work out. Until I woke up and realized that it is after-all, a business, like any other. So, I started to organize my activities.

    Now, the first thing I do when I get to my laptop in the morning is open my ‘online journal’, which is a simple .txt file written in Notepad. Ok, am now getting to a level where I strictly follow what’s in my ‘planned activities’ list before I venture off into other matters.

    Tx,
    Kabelo

  8. Hey Kabelo it wasn’t photoshopped, i actually took that from an iPad. I find the quality to be pretty average to be honest, but im very glad u liked it : )

    @Phillip, I got a designer to draw out the “about” page for me, he’s a very talented artist!

    @Derek That’s a good point.. and I think it’s all boils down to our mindset. I am the most disorganized person, but because I dont want another job I’ll do whatever it takes to make my business work, even if it means forcing myself to get a little organised. I guess it’s got to start from ‘the reason why’ we are doing this in the first place.

  9. This is awesome, I love this post! I recently did a video with similar information like this for my subscribers 🙂

    It’s amazing how practically NO ONE is talking about the things you shared.

    The following things would really help us:

    What financial software do you use to track your business cash flow?

    Is your business set up as an LLC (filed as an s-corp) or sole proprietorship?

    REALLY excited to hear your response, again it’s so great to hear an IM’er actually talk about treating this as a real life business!

  10. Hey Bertrand …

    Enjoyed the post particularly the audioBoo insert … that’s a tool I must make more use of …

    I think most of us are singing the same song. I’ve definitely come at this with a “Pie in the sky” mentality in the past and it’s only recently that I’ve convinced myself that I need to really treat my IM efforts as a business and a business with a strategic plan …

    I’ve recently been looking at all the material that I’ve bought over the years and realised just how little I’ve put into practice. I know that I need to approach my business, (notice I’m calling it “My Business” now!), with much more discipline, planning, investment and help! There’s so much more to it than that I know … but one step at a time for me … 🙂

  11. @Chris Hey thanks for the feedback.. would u care to share that video of yours u referred to sometimes?

    To answer your questions I use the good old Paypal export function (messy), a software called Putler (http://www.putler.com/) and another tool called Terapeak (https://analytics.terapeak.com/) to keep track of finances and also to analyze customers. Putler is particularly fascinating to work with.

    I am currently a sole trader in the process of setting up a LLC in Ireland with my brother as a partner and shareholder for mid-august. The corporate taxes are pretty low in Ireland (12.5%) and the institutions are far easier to deal with than in france hence our choice.

    I don’t come from a business background/family at all so all this nonsensical number crunching, taxes, business planning etc. is pretty new to me. At the moment the plan is to finance everything with cash from operations.

  12. Hey Michael,

    Yea Audioboo is pretty cool, it’s available on portable devices too so it’s pretty handy (and pretty easy to use). I think the recording limit is 3 minutes for free accounts, and if you upgrade for 60 bucks a year or something you get a lot more time to record your podcasts.

    You have a great point about calling this “your business”. This is what we are all trying to build here, a business, although we might have different strategies and different objectives. It’s more than just trying to ‘make money online’, there must be a purpose and a plan to what we do. I guess that’s how I tend to see it too.

  13. Love your post! I agree with everything you say. It’s all too easy to get the mistaken idea that internet marketing doesn’t need attending to in the same way as more traditional businesses…because that’s the way it’s “sold” to the uninformed and the naive. (Can you think of any other business that’s sold in this manner?)

    Then add the allure of “working in your pajamas anywhere in the world” while the money magically rolls in, and you have people falling by the wayside once they realize there’s actually work, real work involved.I certainly didn’t realize it would be as hard as it is when I first started.

    And the right information? Oh my, how true that is! For me that’s been the number one difficulty. The sad part of this is that it eats away at the trust you need in i.m. in order to be successful.

    Linda

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