How is your online business doing? Has it grown in terms of sales or subscribers since you first uploaded the pages? Have you met your goals for the quarter or the year? Were you able to make a profit and pay yourself a salary?
If you do not know the answers to these questions, then a lack of documentation may be to blame.
There is no successful company in the world that doesn’t stay on top of every aspect of their business and keep a historical record for comparison. No matter how small your company is, it is still worthwhile to keep track of where it started, how it is doing today, and what goals are achievable in the future and a journal is an excellent way to keep them all in one place for review.
Keeping Online Business Financials
Perhaps the most important factor in your online business is how it is performing financially. This is more than just having enough money in your cheque account to pay bills. It is vital that you keep track of every expense and subtract if from the cost of sales. This is a great way to determine where you can cut corners, or identify opportunities to contract services for less.
It is also important to keep a running total of how much income you are making from your business venture. If someone asks you how much you earn on an annual basis can you tell them? Remember that this figure is separate from the cash and capital assets owned by the business.
Metrics
No less important than the financial health of your company are the statistics that show what is working and what is not. Let’s say that you started a pay per click campaign last year and it ran for three months. Without tracking the number of click-throughs from your ad and relating it to the amount of sales, how could you determine whether or not it was a success? You may have a good idea just by looking at the number of sales over this period, but until you drill down a bit deeper and determine the why, your efforts are merely a stab in the dark.
Productivity is represented by metrics, too. How much time does it take you, or an employee of your firm, to complete a particular task? You might determine, after reviewing the amount of output in comparison to hours worked, that certain duties are better outsourced.
And finally, data compiled regarding sales history can give you a clear picture of sales trends. Perhaps your busiest time of year is in the spring while sales really slow down in the autumn. That means you should put aside some of your profits from the busy season and use them to augment the later slump – or focus your marketing and online advertising efforts on bringing in new clients during the fall months.
Learning From Past Mistakes
History can be destined to repeat itself. This adage holds true for the world at large, but also to your online business. Unless you have a track record of what has happened in the past, either good or bad, you cannot change the future. Success comes with learning from past mistakes and using that knowledge to avoid repeating them. Notes that are added to the data in your company journal will help refresh your memory of particular circumstances, anything from global events to weather patterns that affected your business.
Don’t rely on your imperfect memory to run your online business. Write it down, keep track, and then review the data to achieve success and complete goals.
P.S: Don’t forget to also write down your goals and hold yourself accountable!
See you at the top of Google!
Sean Rasmussen
SEO Australia Pacific
AussieSEO.com © 2007 - 2010
Hi Sean,
I think that’s a very important message. Every business needs documentation and reports to be able to see increases or decreases in the different areas of the business.
I know the accounting software used for offline business – do you have something that you recommend to keep track with online business details? Or do you just design your own way?
Tks
Renee
You can use the same accounting software as you do for offline business without any problems Renee. For those people without software, a good old fashioned cash book will also do the trick
Go the cashbook… or the Excel spreadsheet equivalent. A few years ago I went to an accountant and asked him about the best program to use. I was surprised when he replied ‘Nah mate, just use a spreadsheet with these headings…’ Sometimes simple is better.
.-= David Moloney´s last blog ..Elance: Where to Find a Great Logo Designer =-.
Simple is good David! Unless you know the rules of double entry bookkeeping, stick with the good old fashioned cashbook
Hi Sean,
I like the idea of keeping a record of what’s happening with your online business. It goes without saying that you need to keep track of your financials.
But, I think it’s just as important to keep track of lessons learned. You need to keep a diary of the things you tried, how you went about it, what worked and what didn’t. I think sometimes when you read back through your online adventures, you’ll see things that you didn’t when you were in the thick of doing them.
.-= Jazz Salinger´s last blog ..Learn and Earn – It’s a Marathon Not a Sprint =-.
I agree Jazz, it’s quite surprising how handy a diary or journal can be. We do so many things online, it’s hard to remember exactly what was done without some sort of written reminders
Keeping a journal of your online business is a great idea. So far I haven’t got many items in my sales column but theres plenty of space to write them in when it happens. I have just started printing out my posts and articles as well so I can start accumulating data.
Hi Jackie,
I think it’s great that you’ve already created your sales columns. It doesn’t matter that you don’t have many items in there yet. Just by creating them, you’re telling your subconscious mind that you have a lot of sales.
Convince your subconscious mind that your sales are real and it’ll give you a plan to manifest them in your life.
.-= Jazz Salinger´s last blog ..Finding Your Passion =-.
I have captured and detailed all of my online business financials for multiple reasons. I would not only like to know what I am spending, but also what I am making. Also, come tax time it makes things a whole lot easier.
I am using simple tools like Microsoft Excel. Even though there are better tools out there, as long as you can capture the information you need there is no need to spend hundreds.
.-= Cemil´s last blog ..Thesis Theme 18 – Released =-.