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Unless you are well established or independently wealthy to begin with, you have a budget that you need to work within for starting your blog and online business.
While this “magic number’ is different for everyone, a lot of things surrounding your blog have or will have costs associated with them. While I can’t speak for everyone – people use their money differently – here is where my budget goes both for the little things and some larger expenses relating to my blog.
I realized early on I wasn’t going to be able to do the tech work myself. As I have often said, making that decision had a lot to do with the success I have experienced.
With time put in I could have done some of the technical things myself, but I think if I were able, I would have tricked myself into believing that there is value in saving money by doing it myself. The reality is I don’t believe doing your own tech work is something that saves you money unless you are super-quick at it. Tech work is an expense and it is a cost center, time is almost always better spent doing things that will directly make you money or bring you traffic, which you can convert into money. There is very little tech work that can do that.
My first blog I had built for me was I believe around $900. My current redesign is $12,000 and to be honest the changes you see on the outside won’t be anything too drastic. Aside from this redesign project, I probably spend about $1,000 to $2,000 a month generally with enhancements here and there. I know when my redesign ends my monthly expenses will be the same as they were.
I don’t touch any technical jobs myself, yet I always want small changes here and there and the costs for doing them can add up. I have definitely learned to weigh what is a want and what is a need, and how to prioritize.
I will share my not too complicated method for making the determination of what tech work is going to be done and what isn’t. If it is imperative to keeping my site up or improve security, it will be done immediately. If it will make me money, it will get done. If it will just look cool, it’s going to have to wait or get combined with something else later.
Once I started making money, I knew I was already a little behind as far as forming a corporation. There are a lot of tax benefits and legal benefits of doing things this way. I’m not a lawyer and I certainly can’t tell you what’s best for you but I have heard some horror stories about people who didn’t take certain steps. I’ll share what I know on this end and what is involved, bearing in mind this shouldn’t be treated as legal or tax advice and I don’t give you this information in any official capacity.
Firstly, if you are self-employed in the United States, you are subject to a self-employment tax which can be avoided if you form a corporation, fill out a few forms and make some elections. I am not an accountant but my accountant explained this all to me and it made sense.
It isn’t too expensive to become or corporation or LLC or whatever entity works best for you but the money it may save can be big. If you are a corporation everything runs through there and then you pay yourself a salary. Of course you also get the benefits of deducting all of the expenses the corporation incurs. Like I said, there is a lot more to this than I can understand. I trust my lawyer and my accountant and they both said this was a must.
Another thing I did was I trademarked my brand. I have heard several really bad stories about people who didn’t do this. If you don’t own your site’s name, someone else can beat you to it and in essence own the space and have a right to all of your content and income and also they may have other damages that they can be awarded that can go well beyond that. While getting the trademark itself isn’t expensive, there is a search that is done to see if someone else already owns it that will cost several thousand dollars. This isn’t a fee for attorney charges, this is just the fee for the application process.
I figured while I was there, I would also trademark the little catch phrase that goes a long with my site. If this isn’t something you haven’t done and you have already made a big investment, you may want to talk to a legal professional.
I also get a ton of contracts that go along with advertising deals I sign or other partnerships. I also have my own contracts I issue to people who write at my site. All of this stuff costs money. Lawyers usually go around $200 to $500 an hour plus any fees associated with what they are working on.
Some people say you need to read everything, I don’t read anything, my lawyer does.
I used to get by with a relatively inexpensive hosting plan that cost less than $10 per month. Those days came and went long ago. Hosting is something I am continuously updating and it never gets cheaper. Currently I have my site broken up into three pieces with subdomains all hosted at different places, none of them use the base plan. Hosting can be as little as five dollars but it can run to several thousand dollars as your site grows. By the time it gets there it’s all relative.
I don’t spend a lot on software but there is a cost that comes up once in a while. I use Sony Vegas for editing videos and converting video files. There are things like anti-virus software and other tools, and I also bought Quick Books Pro, but I think I used it twice.
Much like tech work I don’t spend a lot of time watching the money that goes into my business. I follow it closely enough to know if I need to move things around in preparation to send money out. I hired someone who tracks all of this stuff for me and feel pretty good about it.
When I first started on July 1, 2008 I would have never thought I would have more income streams than I could keep track of but this is definitely the case. Of course I could probably do it but it would take several hours a week that I would rather spend doing other things whether it is work related or taking one of my few breaks.
I also have an accountant who handles all of the taxes. I never planned on owning my own business and when I started blogging, none of the structures were in place to be a business, hence the need for my bookkeeper and accountant. I really find most of this money stuff pretty boring and to be honest I don’t understand most of it. When they try and explain it to me I just nod my head, it’s going in one ear and out the other. That’s what I pay them for.
Blog Mastermind is a deductible as an educational business expense so if you haven’t signed up for Yaro’s courses, I’m not sure what you are waiting for (yes that’s a non-affiliate plug). You can either give the money to the government or put it to use.
One day a week I have someone that comes over to my house and cleans. During that time I go to a local coffee shop and work. I saw a person there who had a Mac Book Air, an iPad, and an iPhone all out on the little table at the same time. To me it looked like he had left two of the three for dead and they were just a conversation piece or something. I was going to ask if I could borrow the iPad as all I had was one notebook with me.
I have a lot more equipment than I used to when it comes to stuff for my site and none of it gets left for dead. If it isn’t getting used, it goes to Goodwill or the Salvation Army. Not all computers, cameras, lighting, etc. are expensive, but mine isn’t too cheap. I don’t buy things like an iPad to show off at a coffee shop, but if I had one I would use it much the way I use my second and third screens at home, to display references so I don’t have to page back and forth while I write.
Equipment is tricky because you don’t want to go low end but you don’t want something that isn’t going to be paid for by the income from your blog pretty quickly. If it’s something you “might” need, take that money and spend it on something you do need, something that will build your brand and make you money.
Like most people I have a smart phone, which more than 20 times I have used to go into the back end of my site and fix something. Using a smart phone to make a quick fix isn’t ideal but it beats having to find a computer if you aren’t near one. All of this is a business expense.
Because Sports Chat Place is all about sports, I have all of the premium sports packages for television and I have satellite radio. I go to a lot of live events like the big boxing matches in Las Vegas, all for the sake of work. Hey, someone’s got to do it.
If you have contributed regular content that has led to the building and the success of my site, you get paid and in some cases you have a profit sharing plan. There are a few ways which this works and to be honest, none of them currently work too well.
Once again, I never expected to make money and run a business so this is something that will have more structure in 2011. One thing is one hundred percent certain; there isn’t one person who contributes to my site whose sole purpose for being there is to make money. If you aren’t passionate about a particular sport or sports in general, you aren’t part of our crew.
Expenses pop up out of nowhere all of the time but it usually fits one of the above categories. These always happen at the worst possible time but at this point, I am usually grateful it isn’t something worse, as I have had it all happen.