Most new businesses require a settling in period where start-up costs exceed income. It is vital to keep tight control of this process, so that losses don't run unchecked. This principle applies equally to any new business, whether it's a tiny one-man show, or a huge company, making a new investment. 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.
We've already discussed the importance of weighing up your financial situation, before you get going on setting up your business. 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. Keep this simple and straightforward.
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! For now, a regular spell each month will help you to track your progress. Soon you'll be able to celebrate your first profitable month! 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. Keeping copies of invoices, for recording in your spreadsheet, will make the job much simpler. 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.
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.
