Early Stage Strategy: Focus on Cash Flow
Profit is an illusion, cash flow is fact. ~ Unknown
As you know I work with a $200 budget to reach my goal of getting an income from online activities. One of the things I’m doing is monetizing this blog, but there are more ways I will be exploring. In the early stages though, you’ll want to focus on cash flow, no matter what tactic you’re using.
Cash Flow
Cash flow is a term that refers to the amount of cash being received and spent. It’s what you see on your bank statements. Money comes in, money goes out. Earnings and profit are not the same as cash flow. Cash flow is what happens now, earnings and profit are what might happen in the future. Earnings turn into cash flow as soon as someone pays you.
Cash flow is exactly what I’ll be focusing on when directing my energy to making money online. I want to see that cash coming in. I don’t want to see some virtual profit accumulating on some site, without the cash flow associated with it.
The fact that cash will flow out is a certainty for me. For instance, every month I need to pay my hosting. And every year I need to renew my domain registration. Both aren’t really expensive, but on a $200 budget, they nibble away the budget in a steady pace.
Using Cash Flow Characteristics
Some ad programs have several restrictions that hurt their cash flow attractiveness factor. Google Adsense for instance has a payment threshold of $100. If your earnings balance at the end of the month is below the $100, it is carried over to the next month. Month after month after month, until you finally hit the $100. When that happens, they wait another month before issuing a payment. If you’re in one of the countries that’s elligible for electronic funds transfer, it’s only a couple of days before the money hits the bank. If you’re not, you have to wait for the check to come in the mail and then wait before the bank decides to clear the check and deposit it to your bank account (while deducting their processing fee). From the point of cash flow not very attractive at all. Kontera has similar characteristics.
Other ad programs like Text Link Ads and LinkWorth offer better terms. Low or no payout limit, payments to PayPal in the week after the previous month ended. Affiliate programs like those offered at e-junkie or Web Warrior Tools show similar characteristics. From a cash flow perspective this is a lot better already.
And if you provide private ad sales, you get the money in your account instantly. This is what makes OIO Publisher so attractive to me, the money you charge for advertisements is deposited instantly in your Paypal account. This is cash flow heaven.
When you dedicate a part of the layout of your website to show ads, it’s worth checking out the payment terms for the program you intend to use. It could take many months before you actually see any money. For me it’s a deciding factor in the early stages, and it might even be in later stages as well.
I only mentioned a couple of programs in this article, but I’m working on a big list of programs, comparing their cash flow characteristics and more. Subscribe now and be among the first to know about that comparison.
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