Gross and Net Income in Information Marketing Business
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I’m in the process of watching a video on the benefits of going after “natural” search engine listings.
They make some good points but they continually refer to “how much money they are making.” When they discuss these figures they are referring to their GROSS figures. This is absurd.
When you discuss numbers you need to get me excited by talking about your NET numbers. This guy doing the video is constantly talking about how he is “making” $225,000 a month. Great number IF it were your net. The problem is that he’s discussing his GROSS.
So he may be 1000% honest and be losing money every month. So you can gross $500,000 month and actually be losing money. This is true in any business. I don’t give a cr** about what you’re grossing. In fact, it takes more time and money to generate a larger gross.
I concentrate on the net. Net in terms of dollars and in terms of time.
Here’s an example: I would prefer to make $5,000 month using WebMarketingMagic than make $10,000 a month selling some of my own products. Why? I have a license for WMM (www.WebMarketingMagic.com) and get 50% of my gross sales of that software. BUT, I have to do virtually NOTHING. No customer service, no fulfillment, no nothing, except to vigorously promote people to sign up for the $3.95 30-day trial. Please do so now if you haven’t already! lol
My mental computation on where I spend my time in my business relates to the two things everyone thinks about: TIME and MONEY.
Yes, $10k is greater than $5k. If all I was interested in was money, then I would opt to be making the $10k. If my decision as to where to spend time in my business also has to do with how/where I spend my time, then we MAY have a different answer. In my case we DO have a different answer.
I would MUCH rather spend NO time and make half as much money. No time isn’t quite accurate. I should qualify that statement by saying NO TIME on what I don’t like doing. I do NOT like doing customer service of fulfillment.
Luckily, I have someone who does the fulfillment for me. Bret Ridgeway at www.SpeakerFulfillmentServices.com. Tell him I sent you. I do NOT have anyone helping me with customer service. Well, that’s a bit of a fib as well. Johann, a Peruvian college student who I “sponsor” helps me with some things.
Those things that he doesn’t help me with aren’t worth (to me) the additional $5k per month. I just don’t like doing those things.
Why not hire someone to help me? Also not part of my business model. I WANT to operate as a “one man band.” Some of my colleagues are appalled at this. Too bad. I’ll run my business my way, you run yours the way you want to run it.
My model is built around creating virtually automatic money making streams.
I would RATHER be an affiliate for a great product that I truly believe in than tout my own and have to do service for those products.
So ask yourself this question? What kind of a life/lifestyle do YOU want to lead/live? I want to be able to go anywhere I want, at virtually any time and not have to worry about “running a business.” I’m basically a creative type who has a good grasp of business. Heck, my parents refused to finance a degree in Theatre so I got all the way through with business degrees.
Don’t get me wrong, I love business. BUT, I love the creative side of business. I HATE doing the tax stuff, I HATE doing the accounting. I LOVE all the marketing and more creative stuff.
See you next time! Look for Part 4 of the 4 part series coming soon!