It’s 10pm. The kids (and hubby) are asleep. She sits at her desk in the corner of the living room, the only light coming from the small lamp perched precariously on a stack of books. Bending over the laptop, she squints in an attempt to read the email she just received. A little sound goes off and she tabs over to social media and the message someone just sent. Although extremely tired, she needs to keep going for another hour to finish this blog post and research two new affiliate links. “Is this worth it?” she asks herself for the thousandth time.Did you resonate with anything in the above paragraph? I get it. We’re all so busy doing all. the. things. Let’s face it though. We can’t do it all. There are only 24 hours in the day, my friends! And you really have to sleep some time….So how do you decide which things to keep and which things to unload? There’s a multitude of information available online about how to determine your audience and where they hang out. But today, let’s take a look at your monetization efforts. That’s a fancy way of saying the activities you do to make money.Bloggers typically monetize in several ways: 1) Ad networks, 2) Affiliate programs, 3) Sponsored posts, 4) Information products, 5) ServicesEach blogger and her audience is different, so there’s no “one size fits all” formula. But that’s what makes it fun!The key here is to accurately examine the income earned by your blog to determine what’s working and what isn’t. Just because something is bringing in some cash, doesn’t mean it’s a worthwhile endeavor for you!You need to discover your own personal ROI for your blog. ROI stands for Return on Investment, and — in this case — your main investment is time. I’m reminded of a quote that I heard years ago about time:
LOST: Yesterday, between sunrise and sunset, two golden hours, each set with 60 diamond minutes. No reward is offered, for they are gone forever. ~ Horace Mann, 1844Your time is valuable. So you want to ensure that the activities you are pursuing and “spending” your time on are even more valuable! Okay, Rebekah, you’ve convinced me! How do I do this?It’s simple…. Not easy, but simple. 🙂
Your time is valuable. So you want to ensure that the activities you are pursuing and “spending” your time on are even more valuable!
How to Determine Your ROI
The first step is to track the amount of time you are spending to generate income. How long does it take to create a product review post with affiliate links? What about that sponsored post from your favorite brand? How much time do you spend creating information products? There are several great apps for time tracking, but my current favorite is Toggl. I have the app on my phone and it works great for switching between projects and I can keep a good eye on where my time is going every day.You can also use a spreadsheet and a watch to get a general idea, but you’ll want to have some way to actually track it instead of guessing… we always guess that it takes us less time than it really does! :-)Next, we want to isolate each revenue stream so we can see exactly how much we made from each one. If you are using bookkeeping software already, you’re halfway there! It’s easy to generate reports based on where the money came from and you can use Excel to refine the data even more. If you aren’t already using software, you can DIY it with an Excel spreadsheet. But an even better option is budgeting software. You heard me.I use this amazing program every day for both my business and my home. It’s helped in so many different ways, but you can read more about that here if you are interested. Suffice it to say that this program will easily help you with this project!Whether you use bookkeeping software, budgeting software, or a plain ol’ Excel spreadsheet, you’ll want to ensure that each time money comes in, you have it attributed to an income stream. This could be a Vendor/Client, a category, whatever so that all income from a certain source is linked. Once you have your total income from your different streams, and the total time you spent on each of them, you can do a quick calculation.$ / H = ROISo the amount you made, divided by the amount of time you spent, equals your return on investment. Let’s say you made $100 last month from a sponsored post. It took you 4 hours to write, refine, publish and promote it. So your ROI on that activity would be $100 / 4, or $25. If you made $500 from a sponsored post from a different brand, and it took the same amount of time, your ROI would be $500 / 4, or $125. If both those brands approach you in the future, you’ll know which one is a better use of your time!That’s a very simple example; real life isn’t usually so cut-and-dried!But it helps to break things down into parts that you can use to compare. For example, which is better? Offering Pinterest services to bloggers? Or creating a course to teach bloggers your best Pinterest tips? The first one will bring in a quick influx of cash, but is much harder to increase your ROI as there are only so many hours in the day. The second option can scale much better, but takes a bit longer to bring in the income.CHALLENGE: Be intentional about tracking the time you spend on income-generating activities. Be honest with your evaluations and don’t fall into the trap of “it *should* only take me this long”, but use the actual time you spend. Calculate your ROI on each activity and track it for a few months to get a good picture.Taking that step back from your business and investing the time to determine which activities are the most profitable will end up saving you time in the long run — and increasing your profit!
Rebekah Zobel Jones is The Centsible Bookkeeper. With a deep financial heritage (her grandmother, father, and aunt were all accountants/bookkeepers), digging into the books is always an adventure. She irons out the difficulties and automates as much as possible — giving you peace of mind and clarity about your financial position. Grab her quick guide to reduce expenses, 5 Simple Steps to Shrinking Your Financial Waistline here.