If you’ve had your online business for a while, there is a good chance that you’ve started making some money with it. If you have, the next thing you may be wondering is how you can make more money with it. I definitely don’t blame you. Once you’ve started earning money with your business, you’re going to want to figure out how to grow it even more.
The Pareto Principle
The first question you should ask yourself, is how are you earning your money? The second question you should ask yourself, is what are you spending your time doing? In other words, you need to figure out what’s working and what isn’t. After that, the easy thing to say is to do more of what’s working, and stop doing what isn’t.
You need to think of the 80/20 rule, also known as the Pareto Principle. This says that 80% of your results come from 20% of your work. That sounds great, doesn’t it? If you can figure out what part of the 20% of your work is making you money, it’s possible you can stop a lot of the other 80%. You can then spend more time on the 20%, and earn more money!
While that sounds easy, the problem is that you first have to know exactly what’s working and what isn’t. The best way to do that is to track everything. From there you can look at your data and make a plan for what you should and shouldn’t be doing going forward.
Tracking Your Time and Income
Your first step will be to decide what you want to track. This will be different for each person as it depends on exactly what you do in your business. A good place to start is to look at your income and expenses. You can look at what’s making you money. Do you have your own products? Are you making affiliate sales? Are you getting paid for writing posts? You also need to figure out how long it’s taking you to do each of those things.
Let’s say you start to track where your income is coming from. If possible, go back and look at the last twelve months of financial data. If you can’t go back that far, try to go back at least six months so you’ll have a decent amount of data to work with. Where is your income coming from?
Look at Your Expenses
Next you want to look at expenses related to that income. You’ll have some fixed expenses like hosting your website, but things like that should be ignored for the purpose of this exercise. You’ll have expenses like that no matter what you’re doing in your business. Take a look at the costs that are directly related to each source of income that you have.
In other words, if you needed to hire a copywriter to create a sales page for the course you created, that counts. If you hired a virtual assistant to create some graphics for you to use in an ebook, that counts. If you hired a virtual assistant to post on social media for you to promote affiliate products, that counts. You may also be paying commissions to affiliates promoting your products. Don’t forget about that. Then go and subtract these costs from the income you made, and you’ll get a good feel for your actual profits.
Some of your sources of income will have little or no expenses. Others might have quite a bit! Once you’ve adjusted your income figures to reflect the profit you made, then you can start to compare.
Look at the Time Required
After you do that, look at the amount of time that you’re spending to generate the income. It make take you over a month of working eight hours a day to launch a new course. On the other hand, it might only take you an hour to create a new post on your website that promotes an affiliate product.
Consider Future Income
Make sure you don’t forget about the amount of money that you can expect to make from these items going forward. You might have launched a new product in the past month or so. If that’s the case you most likely spent a lot of time working on it, but might have not made much money from it yet. Based on your past experiences though, you know that there is a good chance that you’ll make a certain amount of money going forward. Make sure you take that into account as well.
Decide What to Do More of, What to Stop Doing
Once you look at this information, it should be easy to decide what you should be doing more of and what you should be doing less of. You’ll hopefully find some things that you can stop doing right away too as they aren’t helping your business. Focus most of your time and energy on the most profitable products and income sources. Work on it for a good six months and look at how much your profits went up. I wouldn’t be surprised if this strategy allows you to double your income. You’ll also find that you might be spending less time to earn this income as well!
Enjoy,
