I’ve entered my second full year of self employment in 2011 and rather than provide you with a typical income update as I’ve done in the past, I’d instead like to look at the other side of the balance sheet and detail my expenses for Q1 of 2011 (I’ll get to the income at the end).
Table Of Contents
How Much I Spent In Q1 2011:
I had to put together these reports because I had the “problem” of making too much money last year that my accountant advised me to start filing estimated federal income taxes on a quarterly basis. This requires me to keep track of my income and expenses every quarter. So what I’ve done is put together a couple pie graphs showing you my total expenses, fixed expenses and variable expenses (primarily one time costs):
Total Q1 2011 Expenses: $7,095.20
I’ve left out my tax expenses which were by far my largest expense of the quarter because my tax rate will vary compared to yours since my wife is working full time now as well.
Total Q1 Variable Expenses: $5,048.26
The variable expenses I had in the first quarter of this year were for primarily one time expenses like the consulting I received for some web projects I’m working on. The software development expense was for version 1 of an in house tool I had developed to help me buy websites. The conference expenses covers my airfare and hotel costs for some conferences this year (like ASW). The equipment expenses covers some ink I had to buy for my printer (boring I know) and my $500 Herman Miller SAYL chair. Before you ask – yes I can definitely tell the difference between my old $99 Office Max chair and my new $500 Herman Miller chair. Best $500 I’ve spent in a long time. The link services covers some directory submissions to Best Of The Web and another monthly service I was testing out. I paid for some staff finding services to help hire my first full time programmer (which so far has been a great success) as well as a job board posting on Problogger.net to hire some more writers for Photography Tips. I spent some money on some one time software licenses. I also spent a little over $100 on food stuff while I was at conferences. Lastly, I forgot to include the few hundred dollars I spent on domain names in Q1.
Total Q1 Fixed Expenses: $2,046.94
The fixed expenses I had for the three month time period of the first quarter were actually pretty low at just over $2,000. Payroll covers one of my outsourced employees who does some work on the websites I build such as WordPress installs, article writing and link building. My hosting provider is Softlayer and HostGator. I have a dedicated server with Softlayer which I use to host larger websites, but if you’re just getting started out you can easily get by with the shared hosting plan from HostGator which I use for some of my smaller websites as well. Aweber is my newsletter service and I’m about to re-hit $89 per month with them for having over 10,000 newsletter subscribers. For the price I love using Aweber and only wish I would have started using them sooner. Finally I have video hosting through Amazon S3 and because all of my sales pages are video based along with most of my course material I tend to spend at least $50 a month on that hosting as well. I suppose I could include a few of the expenses I left in the variable category down here in the fixed category but they wouldn’t add that much to the fixed total.
How Much Did I Earn In Q1 2011? $41,626.52
I made a total of $41,626.52 in total revenue from Q1 2011 which came from a combination of Amazon Associates, Clickbank, Consulting, Adsense and other affiliate earnings. So based on my first three months of 2011 I’m earning over $10k per month even after expenses are factored in. I still need to step things up a few notches if I plan to hit my 2011 income goal of earning 50% more than I did in 2010.
Online Businesses Are Cheap!
Instead of showing a typical income report I wanted to show you the other side of building a successful online business by highlighting the various expenses that I incurred during a typical quarter of business. The fact that I made over $40k from January to March with only $2k in “fixed” expenses is a testament to the low cost of online businesses. If you want to learn how to build a successful online business than I suggest you subscribe to my newsletter. I’m making significant changes this week and shifting the content to providing much more focused step by step tips for people looking to build their own online businesses.
Good stuff. I guess I have to start showing my expenses report too.
What did u use to create these pictures?
Regards
Adesoji Adegbulu
http://www.makemoneyonlineng.com
Hey Adesoji,
I used MS Excel actually.
Chris
You think paid directories really help or is that the first one you have done? I have never paid for any myself but would be willing to if I thought it would help solidify my rankings.
I’ve been doing Best Of The Web since 2008 and Yahoo Directory since 2008 as well, I think it’s just a cheap higher quality link. The tough thing is that with most things related to SEO it’s nearly impossible to be certain if there’s enough of a return on the investment. I just pay for these links where I see that my competitors are for the most part heh heh.
Wow, nice ROI!
Yah, I’m not really a paid affiliate dude and I don’t buy $500 chairs that often either so these numbers may be even more healthy next quarter hopefully π then again my business model is more difficult to scale unless I’m buying websites that are earning money (which I am :D)
WOW. It’s insightful to see that you have scaled up your business in this way. I was shocked initially to see you spending $7000, but the income was inspiring. Again, it tells me internet business is potential.
I love to pay Aweber $200 – it means I have a huge list to market to. I love your NPC and hope I could make more out of Amazon.
Hey Kent,
Glad you liked this format. Perhaps I’ll do it again next quarter π
Chris
Having a large list is one thing and most important and another is having a responsible list.
You can broadcast to 10,000 people and you will not make anything from it.
I hope to get a nice list soon.
Cheers!
That’s cool that you put up your expenses as well as earnings. I’m in process of getting more organized and tracking EVERYTHING and yikes my expenses are too high! Great income for the quarter!
Hey Lisa,
Yah, I try to have all of my expenses go towards projects that will generate an income and very few expenses are on superfluous items like my silly $500 chair (even though that was my present to myself after selling a website last year for six figures).
Chris
That is awesome! Well it is when you consider that I only pull in around $500 a month. π
Reinvest that income into more cash producing things and just keep building it up slowly π
This is really a comprehensive way of monitoring your expenses. It’s quite shocking to see how much you’ve spent this quarter alone. However, after seeing how much you’ve earned, i’m sure it was all worth it. Kudos!
Hey Chris, curious where you found your outsourced worker — elance, craigslist, or elsewhere?
Craigslist, but I hired another one through a staffing service recently as well.
That is awesome! Well it is when you consider that I only pull in around $500 a month.
WOW! Great results!
Its very inspiring to see what can be done online.
Maybe I will finally get my act together and start on this online malarky………….’huge sigh’.
Any tips on where to start Chris?
I was a member of the Keyword Academy a while back and understand their ‘methodology’ and followed Griz and his story for a bit too.
Im sure I can do it, but its about focus and having faith in what you are doing….and the gazillion ways to make money bantered about the lethal WEB certainly doesnt help.
I really dont know where to start as I have officially drowned in the online sewer of trying to make money online.
Help…..anybody?!
DP
Far more informative than just showing big cheques and traffic stats. Keep the expense reports comin!
I appreciate this post very much, Chris! At times, what IοΏ½ve been reading on some other blogs are only income reports without the expenses. I think that itοΏ½s good to know both, the incoming and outgoing cash flows so that itοΏ½s easier to balance everything (and I realize how much you can really earn if you do the job!) Online business really rocks!
Great income report, Chris, awesome work! π You are doing very well and those are some great margins. Thanks for sharing!
Thanks Ian… yah I feel like a douche writing these but people keep asking me via email to keep doing them.
Chris
You shouldn’t feel like a douche at all. These reports are definitely motivating and show what CAN be accomplished online if you put in the work. Maybe someday I’ll be buying myself a $500 chair too π
Chris,
U have got a nice site there. I just came in for the first time.
The question I will lost to ask is, How do you keep record of your expenditures? This seems to be a major problem for me.
Hope you can help me out here.
Thank you,
Roy!
MS Excel
Inspiring post! Most bloggers will not even show their expenses like you did here. Most will only show gross profits and such. Subscribing now! Thanks for your share. Looking forward to reading your ebook. π
Inspiring Post! I am new in IM and trying to learn as much as I can and this post is inspiring me to do a lot π Thanks for sharing your details. π
Hey Chris impressive number I enjoyed it so much I signed up for your book I look forward to hearing your wisdom.
Good for you! You deserved it. Keep it up!
I’d love to see a breakdown of the earnings as well as expenses, although I know that is personal. In particular the volume of income from AdSense versus Amazon and Clickbank. But otherwise this is very informative stuff!
Got tired of making graphs lol. Perhaps I’ll do it in the next one π
WOw, this is awesome. Imyou are so right, online businesses are cheap. with the initial investment of $100k worth for an off line business, there is no Garantee that the return will be as much as a $2 k online business. With the rapid expansion of the Internet, working online is THE smart thing to do;) thank you. This blog rocks!