6 Money Management Tips For Your Online Business

When it comes to brick and mortar stores, every business owner, prospective or otherwise, has a lot of expenses to consider.

For the store itself, you can take rental costs — if you’re not buying outright — and the utilities. Factor in any renovations needed, plus there’s also stuff like property and fire insurance, applicable health permits, local government permits and the corresponding taxes, etc.

Then there are also the physical assets used in the business: aside from raw materials, there are the tools and any machinery used in production, which also come with their eventual depreciation.

Adding employees means allotting money for compensation and benefits, plus health insurance and any government-mandated pension plans, which are also included in the cost of running the business (overhead). That’s a lot of slices in the budget pie.

In an online business, you can bypass a majority of these bills. Because it’s a virtual enterprise, you can run one out of your basement, your garage, even your living room or a closet.

You’ll need reliable equipment, but most everything else can be outsourced like data storage, website design, virtual assistance and even administration. There’s no real need to buy the latest thing only to see it depreciate in value after only so much time.

In running an e-business, things get really different because of its very nature. The first and most basic requirement is a computer and a reliable (and fast) internet connection.

Anything you want to do, whatever it is you want to build, is based on having these things — whether you’re selling something (being a merchant and an e-store proprietor), having someone else sell something for you (affiliate management), establish a presence or a brand (blogging and social media), again, your most basic tools are a reliable computer–with good backup, don’t forget — and a steady internet connection.

Things to consider:
For someone just starting out,investing in powerful systems you don’t fully use to their capacity is a money drain. Push yourself to maximize what you have before paying out anything. Trust me, it’s much easier to let the money leave your hands than it is getting it there.

If you already know what you’re doing and the tools you have aren’t helping you do that, then you can invest in equipment upgrades. Just remember:

  • One, it’s not the tools, but the user’s mastery and discipline that determines how well the work gets done with what’s at hand.
  • Two, don’t use money you don’t have and aren’t sure you can actually pay for (as in credit). It’s very easy to get credit card debt get out of hand, and if you don’t think it out thoroughly and crunch the numbers, that can eat into your capital if you aren’t careful.

As with any serious business, large or small, the bottom line to survival comes down to money. You need to know how to read the numbers, and make what money you make work for you. That’s where scary things like pricing, inventory, readerships, commissions and pay-out come in. So what do you do?

Develop a budget. First, think of what you’ll need. Then, take a good long look at what you have on hand, then you think about how much of that you can use to support your business until it starts making enough money to support the whole shebang. You throw everything in, what do you have to fall back on?

Know how to use your money to its best effect. This includes being able to use credit card payment due dates to fall to your advantage, knowing how to compare the costs and advantages of different loan agreements when you need additional capital (the devil is in the details), and being disciplined enough to control any impulsive reaction to bad news. Throwing money around doesn’t solve problems.

Be accountable. Check your records consistently. At any given point you should be able to pull up an accurate assessment of how much money you have in the bank, how much you expect to come in –and this is important, when it’s supposed to come in (talk about counting chickens before they’ve hatched).

Collecting payment for supplies and services can be a major pain — you need to know how much will be coming out to pay for the bills, how much is supposed to go to taxes, and and how much money you need to put back in to keep the business running.

Try bartering and partnerships. It’s a virtual economy: people make all sorts of deals, whether it’s accruing points at websites, swapping services, or making guest contributions in exchange for exposure to a wider audience…anything goes. Joint ventures, partnerships and collaborations are what makes the internet possible, and they can help you leverage your talents and labor to get you going to the big leagues.

Prioritize your expenditures. What are you paying for, exactly? Peace of mind? Guarantees? It’s very easy to be seduced by the advertising of goods and services promising amazing returns — but you have to get emotions out of the way if you are to think clearly.

If you tell stories about how getting this or buying that will make your situation worlds better, then you may be over-invested emotionally. That’s not a very good state to be in when it comes to handling money or business.

Know what you have and how best to use it. Time, energy and money are assets. Getting the best, full use out of them gives you a much stronger foundation to build on.

You can be your own boss when you run your business online, even as you’re everything else — designer, copy-writer, packager and driver/mailer, accounting and billing and customer relations — especially during start-up.

Getting intimately familiar with the ins and out, and ups and downs of all the aspects of your business makes you appreciate all you have to learn, and your capacity to learn them.

You won’t take labor for granted when you work in the directions of your goals, and you’ll work smart, as well as work hard, when it comes to managing your money.

Like this article? Found it helpful? Bookmark Jrox Resources for more helpful articles, and visit Jrox.com to learn more about Affiliate Marketing and get access to your own Affiliate Software and eCommerce Shopping Cart.

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