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. The simplest is probably to open a little
spreadsheet in Excel, with headings for a few columns, but
first decide a limit for your monthly business expenses.
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. The essence is to keep it as
simple as possible. 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. If you were
fortunate enough to do a little book-keeping at school,
this exercise will be a breeze, and if so I apologize for
boring you with silly details! 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. If that income is sufficient for you to
live on, then someone will come looking to tax you one
day... 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. Your little spreadsheet, combined with the copies
of invoices will make that task much easier.
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.
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About the Author: Mike Muir has personally been through
these experiences and has invested both time and money in
selecting those options which are most effective at each
stage of getting a new online business on track. He is
happy to share these with you. Please visit his site at:
http://www.mikeshomebiz.com
and visit his blog at:
http://www.mikeshomebiz.com/blog
for more articles in this
series.
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