Where and How I Spend?

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How much do you spend for getting these types of earnings? And where exactly do you spend your money? Is it possible for you to give some sort of division?

This is the questions I have been asked twice in last two days by two different people. I thought I will answer them in the blog, so that it can help our readers also.

What all are the expense heads for me and how much each one of them takes?
Here are the details of the heads. Please note that these are just rough estimates and vary from month to month.

Domains and Hosting - This is the first and foremost important expense without which the business can’t run. I have 3 dedicated and 8 shared servers. I have many domains as well. So the total cost for the hosting and domain registration per month comes to around 5% of the total cost.
Employee Salaries - I currently have 15 full time employees in our office. The salaries to them constitute around 30% of the total cost.
Payment to Freelancers - There are many things for which I hire freelancers. There are around 7 to 8 freelancers who are regularly working for me. Payment to them constitute 15% of our expenses.
Marketing - This is the biggest expense for me. It includes link building, SEO and all other type of internet marketing. I even do some offline marketing for some of our sites in colleges. This constitute around 35% of the total expenses.
Other Office Expenses - These make around 15% of total expenses and includes expenses like capital expenses, internet, phone, electricity, softwares, employee welfare etc.

This is the graph of total expenses.

So you can see that marketing is the biggest head. Second biggest is the employees who are creating the content. So the whole story is about creating unique and good content and then make sure that people see it (means, market it heavily). My team includes mostly content developers and Search engine marketers. No programmers. I am a programming geek so I love to take care of all the programming involved.

So, what are the places where I don’t spend any money?

No PPC, No Advertising
No Rentals
No Programmers
No Third Party Marketers

But I am planning to spend money on PPC and third party marketers soon. But my plans to buy a new office and to at-least double the number of employees will surely push this PPC and third party marketers on the back seat.

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Welcome back!

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Jim Karter on November 1st 2008 in Business, Earning Money, Internet Marketing, Questions

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29 Responses to “Where and How I Spend?”

Abhijeet Mukherjee responded on 01 Nov 2008 at 5:21 am #

I think you being a programming geek certainly saves you a good amount. Overall, a nice breakup of your expenses ( and yes I was surprised to find you don’t do PPC )

Btw is your office in Pune ?
Fred @ Newest on the Net responded on 01 Nov 2008 at 8:12 am #

I am looking to hire so employees or freelancers to start scaling my internet marketing business.

Do you have any recommendations on where to find good emloyees or freelancers?

How do you train your workers?

Do you have any other advice for bringing on employees? How you use them? Etc.

Thanks,
Fred
ROW responded on 01 Nov 2008 at 8:32 am #

>>It includes link building, SEO and all other type of internet marketing.

Can give some more details on it?

For some niche I find this is v difficult. How do you do marketing for niche which is not so talked about in general?
Me responded on 01 Nov 2008 at 9:19 am #

How much of your monthly earnings you put back to your business?
Me responded on 01 Nov 2008 at 9:20 am #

I think I forgot the “do” word…
Me and my english.
Markov responded on 01 Nov 2008 at 10:22 am #

Hi,Jim

Do yu outsource link building for you sites on with freelancer

I have seen some services on getafreelancer.com but i am not really sure can i trust them
Make Affiliate Money responded on 01 Nov 2008 at 4:09 pm #

Interesting stuff Jim

I think the profile of spending would be very different if you were located somewhere that offices and staff costs were much higher, but then again you have to take advantage of these things to become more successful.

It must be scary to have so many people dependant on your business and must drive you to do better.
bernard responded on 02 Nov 2008 at 3:28 am #

Mr Karter,

As a programming geek, what kind of software do you write? Your core business don’t seem to be involved with much programming.

Supposed your core business need programming, did you avoid to hire a programmer to keep a strong hand on the business?
Saroj responded on 02 Nov 2008 at 6:11 am #

Hi Jim,
i want to sell my domain name and 5gb hosting account for $300 please help me…@email
Raoraj responded on 02 Nov 2008 at 9:01 am #

its good to see u back.
keep on posting.
kent responded on 02 Nov 2008 at 10:58 am #

i just wanted to say that ive been incorporating jim’s straight-forward advice since i found this blog maybe 6 months ago.

i started from basically $0, and i now make around $800usd per month from adsense and kontera on my sites, which are only 4 months old. i have been able to grow the income by $200 each month.

i plan on moving into more affiliate-type programs once i can cover my basic living expenses from adsense/kontera.

its a gradual, steady increase, truly not rich-overnight. But it does work predictably and you can do it!

thanks jim…
Me responded on 02 Nov 2008 at 11:18 am #

Congrats Kent.
Teacher Worksheets responded on 02 Nov 2008 at 5:48 pm #

Great post, Jim! Thanks!

I too am curious to know what percentage of your earnings go back into your business.
Jim Karter responded on 02 Nov 2008 at 8:34 pm #

Abhijeet Mukherjee, Yes my office is in Pune.

Fred @ Newest on the Net, I find my employees by direct references or online job sites. Freelancers are mostly from web forums. But it takes a long time and many hit and trials to find a good freelancers and most of them are not upto the mark.

For training the employees, I myself take few training sessions.

Me, around 30 to 40% goes back in.

Markov, My team do the SEO but sometimes I even outsource them if I need them little faster.

bernard, I write all types of scripts and programs required to run and maintain my websites. There are many types of scripts I use to automate things. Then I also run a very small advertising/affiliate network for Indians which is currently in Beta, which is fully written by me and have alteast 60,000 line of optimized perl code.

kent, great going kent. Best of luck.
Webmaster responded on 02 Nov 2008 at 8:37 pm #

Hmm, nice “breakdown” Jim
Mounted Deer Antlers responded on 03 Nov 2008 at 1:08 pm #

Love this post Jim. I currently only use freelancers, but have considered bringing in some people full time. Do you like full time employees better than freelancers?
Life is Colourful responded on 03 Nov 2008 at 1:50 pm #

There is lot to learn from this pie chart too. After introspection I realized that I don’t spend on advertising a lot, and don’t pump in part of revenue which could have taken by blog to further heights.
Jim Karter responded on 03 Nov 2008 at 9:48 pm #

Employees take more resources than freelancers but produce better and customized results. So I prefer employees (as far I can take care of those extra resources they need).

Yes, the marketing expense is a big one because in online marketing you must be found out by others (did it sound like search engines )
Envirogle responded on 04 Nov 2008 at 4:00 am #

Wow, I would have thought Salary for your employees, would be higher than that spent on marketing.

I guess when you make so much money you don’t feel like doing every little thing when you can just pay someone to do it.

Also I hope it isn’t too personal, but what percentage of your profit is your Expense?

Thanks
Zak Show responded on 04 Nov 2008 at 8:48 am #

Good strategy, In order to succeed you have to control the expenses!
edoogg responded on 05 Nov 2008 at 12:37 pm #

Interesting breakdown.
My-Gravy-Train responded on 06 Nov 2008 at 10:47 am #

Hey Jim,

I had a few queries:

-When did you start blogging?
-How long it took for your first blog to make $1000 a month
-Are you doing paid advertising since beginning?

I started blogging in Feb this year and have a few blogs now, but I am only doing free advertising and forum and social network advertising, my monthly income from Google has increased in past two months but I am not even approaching $200 a month mark

Please guide
Affiliate marketing guide responded on 09 Nov 2008 at 5:24 am #

You sure spend a lot of money on marketing Jim, btw 3 dedicated servers and 8 shared hosting accounts ? How many sites do you have if you don’t mind me asking of course.
Money Academy responded on 09 Nov 2008 at 3:03 pm #

I just started, so i don’t have employees. I do all the job myself.

@ Fred @ Newest on the NetFred
If you offer a good salary i can work with you

But first, I should know what I do ” i’m 11+ hours online daily ”

Post comment in my blog so i get your answer ” can’t use my mail here coz spamming”
Envirogle responded on 11 Nov 2008 at 12:06 am #

@ Affiliate marketing guide

You would sure hope so. Don’t think is would be easy to get $60′000+/month with little advertising.

@Jim Karter

Another thing Jimmy, do you have an office in which your employees work in, or do they work from home.

Thanks.
braveurl.com responded on 11 Nov 2008 at 7:52 pm #

I dont spend much money in my business jim, i operate this by myself. Sometimes i used blogspot to create blog and it’s free!.
SEO Tips responded on 23 Jan 2009 at 11:39 am #

Very interesting to see that you have 15 current full time employees can i ask what the jobs of these employees are?
Rahul responded on 18 Apr 2009 at 9:45 am #

great i understand that blogging is big buisness.
Executive Training responded on 08 Oct 2009 at 4:16 am #

I think you have good visualization and proper management of staff and spend money.