3 Key Ingredients that Help You Build a Business Around Your Blog

Your ingredients are so important!

[This is a part of the "Getting Started with Blog Advertising" and  "Escaping the 9-5: My Road to ProBlogging" series.]

Once you get a taste for what it’s like to bring in a consistent stream of revenue through your blog you’re not going to want to stop! It’s exciting to earn a little here and there especially if you enjoy what you write about!

But it’s been proven time and time again that the difference between those that stay at a very “casual” financial level of growth/return and those that continue to grow consistently and successfully is simply this: Their ability to make decisions based on a business perspective.

The thing here though is you don’t have to go “pro” to have a business perspective and you don’t have to see your blog as a business wholesale to do it either! All it takes are a few very important ingredients:

1. Financial Management and Reporting

The first thing that you’re going to want to do is to start tracking religiously what comes in and what comes out. Technically this is called ‘Profit and Loss’ or what you earn and what you spend!

Any good business keeps a detailed log of their financial state and so should you! You can do this in a number of different ways, from Microsoft Excel spreadsheets to full blow desktop software like Quicken or many of the fine web services (like Freshbooks) that exist.

Heck, you could use pencil and paper if you’d like! But the point here is that you should begin seriously tracking both where you earn your money, how much you earn, and then (of course) what you’re spending (in anything).

One great suggestion for a web service that I’ve helped other new bloggers use is BudgetSimple.com:

It’s a free service and you can quickly create a list of expenses as well as income and add the values in quickly. It’s super-lightweight and you can access it anywhere!

Some actual expenses you might have that you could put in BudgetSimple:

  • Web Hosting
  • Domain Registration
  • License Fees for web services, products
  • Capital costs for software purchases
  • Design/Development

And of course your income lines could be categorized as some of these:

  1. Advertising Networks
  2. Affiliate Marketing
  3. Paid Reviews, Sponsored Posts
  4. Blog Networks, Guest and Paid Posting
  5. Selling Products, Merchandise, and Expertise
  6. Services and Business Development
  7. Premium Content, Auxiliary Sites, Donations, and More

Or, you could even dive in more specifically and just list out the businesses or sources directly:

  • Amazon Affiliates
  • Standard Theme Affiliates
  • Direct Sales from X Company
  • Paid Reviews from Y Company
  • Product Sales for Z

And more! Try it out and see if you like it. They even have some simple reporting tools as well:

Not too shabby looking! Simple and clean.

2. Goal Setting

Set the bar high!

After you create your financial management workflow and/or system you’re going to want to set some very strategic goals for yourself as it relates to your earnings.

It might be tough to be both realistic as well as challenging since you want to make a very educated financial goal based on your traffic numbers, engagement, and more and yet you’ll want to push yourself to really go above and beyond just a mediocre earning, right?

You’ll eventually land somewhere and that’s the most important thing: Set some financial goals based on your budgeting and financial management in step 1 and then write them down some place.

Then get started on completing (and beating) that goal! All businesses have financial goals and your blog (as seen from a business perspective) should too!

If you’re interested in hearing some thoughts about how you might want to price an advertising slot per month so as to get an idea of a year-long financial goal, check out my post here on pricing.

3. Review and Refinement

As iron sharpens iron...

Finally, any good business will systematically and consistently review how they are doing as a company and refine their strategy after reviewing the cold, hard data.

You need to do this too. I review my financial goals every quarter (every 3 months) unless something has dramatically changed (won a huge contract partnership, launched a new product for sale).

Not only do I review but I also spend time refining the goals as well as focusing my efforts more strategically.

For example, if I had the following 10 affiliate marketing channels with the following breakdown of the previous quarter in terms of earnings…

  1. Affiliate 1: $0.59
  2. Affiliate 2: $$11.32
  3. Affiliate 3: $169.95
  4. Affiliate 4: $0.11
  5. Affiliate 5: $5.85
  6. Affiliate 6: $384.18
  7. Affiliate 7: $87.38
  8. Affiliate 8: $17.31
  9. Affiliate 9: $34.96
  10. Affiliate 10: $2.23

… I would focus my energy and time in the next quarter on just Affiliate Programs #3, #6, and #7 which grossed the highest so far. My goal would be to focus all my energy and time that was being given to the other 7 and instead increase already-profitable channels to really maximize earnings.

Review and refinement is critical to your financial growth for your blog! Your goal is to work smarter, not harder!

Finally, remember that your blog is your blog and if it becomes too much of a business then you might have gone too far! It’s about maintaining a good and healthy business perspective as it relates to your blog and unless you’re going to become a Full Time Blogger or Professional Blogger then you’re best to keep it simple!

Good luck and happy blog building!

[This is a part of the "Getting Started with Blog Advertising" and  "Escaping the 9-5: My Road to ProBlogging" series.]

  • http://www.mutantminds.com Mutant Minds

    The point of Financial Management and Reporting has made me think about the legal aspects of blogging.

    I understand that this is important not only to make sure you are not losing money, but that you are also reporting properly on taxes.

    My question is, is there a time when a blog should become incorporated or one of the other forms of business structure?

    I have the blog mutantminds.com for fun, but I also have a domain name that I have a business name to that is incorporated and even a registered mark. This is left over from a previous website I had created for my former business. I am thinking about putting the domain back in service and use it as a blog this time.

    If you have the time to comment, I would love to hear your thoughts on this.

    • John Saddington

      that would be a great post. i’ll put it in the queue!

  • http://bcox.me Brandon Cox

    Refinement. I like that word. I just wrote about it because I needed it quite badly. Don’t skip this. There are times when evaluation of our brand should lead us to ruthlessly cut and slash that which doesn’t fit.

    Thanks for da’ good word.

    • John Saddington

      sure thing brandon. you’re doing a great job but we all make mistakes and over-extend ourselves. i know this first-hand…!

  • Tazmin

    Love the blog! I always look forward to your helpful content. I would have loved to print this (and other posts of yours) for my personal stash of good advice. Ever think about posting a “print this” option?

    • John Saddington

      there is a print this option if you click the orange plus sign to the right….!

      but i will make it more obvious in the coming update of the design!

  • Tazmin Ivey

    Jon,

    I was looking through the WHOIS database and searched a few of my favorite urls out of curiosity (You may or may not recall me asking on twitter if private domain registration was necessary). Somewhere, I saw Saddington, Inc. and it got me thinking – for folks that aspire to build a business from blogging, when’s the right time to consider incorporating or llc-ing? I’m hoping to take my first step into the “serious” blogger world soon, and I wanted some advice from ya.

    • John Saddington

      this is a great topic and i’ve got a post queued about it!

      • Tazmin

        Can’t wait to read it!

        • http://john.do John Saddington

          just want you to know that i still have this queued up. haven’t forgotten!

  • Jimmy

    Awesome Stuff! Thanks for posting this!

    p.s. Loving the Standard Theme so far!

    • http://john.do John Saddington

      jimmy,

      your site makes me LOL.