An extremely important aspect of running any business, whether it's a huge multinational or a little one-person operation run from home, is that of tracking and containing costs. There absolutely no point in running a business which costs more than it earns, other than during a period of establishment. It goes with out saying that most new businesses require some investment to get started, but controlling costs during this phase must be carefully monitored.
This need not become a major chore, but the process of keeping simple records, once set up takes only a moment to update regularly. Decide on a limit for your monthly expenses, then open a simple spreadsheet in Excel, with just a few columns.
In an earlier article we discussed the importance of carefully considering your personal finances before commencing the business start-up steps. Given all other expenses versus income it should not be too difficult to arrive at an affordable monthly amount. It is also important to gain the commitment of your spouse or partner, so that there is agreement up-front regarding a monthly spending limit, and also for the period that you wish/are able to carry these costs, before you reach a break-even point.
If you have Office or similar on your computer, there are numerous ready-made templates available for your use, and if not, a quick search on the internet will find many options freely available. Keep this simple and straightforward. You basically need one side of the spreadsheet for income, and the other for expenses.
A date for each entry with enough space for brief details - the amount carried forward to a column for each type of expenditure and a total at the end. Excel will do the arithmetic for you, as you simply add up each column at month-end, and carry totals to the monthly figures at bottom-right for income and expenditure. Many people understand basic book-keeping, and if you're one of those more fortunate ones, please bear with those who don't have the knowledge! In the interim, a little time spent each month will enable you to keep track of how well you're doing, and enable you to have a little celebration when you start to make a profit!
What we're doing in this exercise, is laying the foundations for later on, when your business really gets going. It's also important to keep copies of invoices safely stored somewhere. You may not need them now, but you will need to show income for your version of Internal Revenue, one day.
Remember - you're not doing this for fun! You're starting your business with your own goals in mind, and your plan is to work from home. When that income is enough for you to live on, then expect a visit from the tax authorities quite soon thereafter... One of the few things certain about life is that you will pay tax! If you have kept your records carefully, you will be able to show that you have incurred legitimate expenses in generating your income. (Won't this be a nice problem to have, anyway?)
Tax laws vary around the world, and you may need to take professional advice one day to keep on the right side of the law. Keeping copies of invoices, for recording in your spreadsheet, will make the job much simpler.
Now that you've signed up for your affiliate programmes, and you've hopefully worked your way through the "getting started" training provided by each, we'll discuss some more steps to take to make things start to happen.
Mike Muir has been through the selection and decision making processes involved in setting up a home business. He invites you to visit his online business at: www.mikeshomebiz.com and he asks you to visit his blog at: www.mikeshomebiz.com/blog for more articles of interest.
Click the XML Icon Above to Receive Internet Marketing Articles Via RSS!
