When I first started working online I used the fact that I was a newbie to comfort myself when I wasn’t making any money.
And then I saw others coming in, who were newer than me, making their first $100, or getting their first 10 sales, while I still had nothing to show.
And panic set in. How could I be getting it so wrong?
So I did the rounds, buying every ‘secret system that the gurus didn’t want me to know about’. And still didn’t reel in the money.
Looking back now, I wish I’d had someone who’d told me that those ‘newbies’, who’d started after me and were making money, had probably been working away at this for a couple of years.
Their ‘overnight’ success was actually an ‘over-2-years’ success.
But, because all the messages that hit me at that time spoke about earning $5,000 a week within a month, I figured that a) they were true and b) that was normal.
But they weren’t and it’s not.
This is a business and, like any business, it needs work, perseverance, patience and application.
It also needs to be properly planned and properly funded.
You see, earning $5,000 a week isn’t much good if it’s costing you $6,000 a week to do it.
So you need to look at what you’re selling online and understand very clearly a) what revenues you can expect and b) what costs will be involved in getting them.
It’s no good, for example, hopping onto Clickbank and picking up a product on which you’ll get $20 per sale, if you’re paying $15 on Adwords and $5 on Yahoo Search Marketing to get it.
You still need to eat, after all.
So you need to develop a proper business model into which you can put all your fixed costs (rent, telephone, hosting charges, membership fees) and all your variables: Pay Per Click costs, classified ads, and other costs involved in getting traffic to your site.
You can then work out how many of these $20 products you need to sell just to cover your costs.
And, since any budgeting process is basically a stab in the dark, you’ll need to track the actual performance of your business to see how accurate your projections were.
Because, if they were way off, you’re going to need to make changes. Unless you want to end up earning $5,000 a week but spending $6,000 to do it.
So please – look beyond the surface. If someone says they’re making $5,000 a week online, don’t imagine they’re rolling in cash while working from the beach.
Try to work out what they invested to earn that, and how much work and planning went into it.
I think you’ll find that a lot of work went into it and their actual profit (the real measure of success) is a lot less.
Update – 10 August, 2010
I just read a post on Men With Pens that echoes this point – far more eloquently that I did. Discover why a Six-Figure Income doesn’t count.