I remember starting out trying to do affiliate marketing fulltime and I literally had a few hundred dollars to spend. There is two important things you need, cash flow and a decent credit limit. I started out with neither.
I can hardly even recall what campaigns or what started making me money in the beginning but I do know I had some rough weeks where I literally was losing potential money just because I had to wait for my payment to come in, and I was on weekly wires too. When you go from spending a hundred bucks a day to $5000+ it’s a bit of a jump and if you don’t have the cash flow you’re going to run out very quick. Some people may recall my post back in November about my annoying credit limit bogging me down from spending more.
Anyway so I have built up what I think is a pretty hefty cash flow which allows me to spend a good amount per day if need be (I don’t like to brag or talk about numbers). Even with my shitty credit limit (because I’m still considered a student) I can make a payment then put more money on the card and the credit limit is automatically increased again for more spending.
When you build up your cash flow you need to have it put aside in it’s own account, this money is to be re-invested over and over again. Just because you have a ton of cash doesn’t mean it’s there to spend on whatever you want, if you don’t have the discipline you will piss all your cash away and have none left to make more money with. Whenever I get a payment, what I do personally is I take 10% of the amount (yes the gross) and put it in my savings, the rest stays in my cash flow account for re-investing. I’m not sure how other people do it but this is how I have always done it and it works great, I will probably up the % I put in savings once my cash flow starts to get too large where I’m not spending close to all of it every week.
Start building that cash flow. You need money to make money!
{ 8 comments… read them below or add one }
I’d suggest paying yourself a set salary once or twice a month from your cash-flow/business account. Paying a % off the top is a good idea for wage-slaves to save for retirement but may not be the best idea when you are producing big numbers. You can look at all the big picture at the end of the year and pay yourself a sizable bonus if there is a huge surplus.
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My entire business earnings go bank into the company account. I pay for the ad and hosting expenses out this money. I use my day job salary to pay the bills and for personal savings.
I only spend few hundred a day, so i don’t have to worry about running out of credit limit. In the beginning I had that problem, so I paid out my personal savings to fund my business. Now that im on wires and have enough liquidity without reaching my limit. (unless of course if I take my spending to 1000+ a day, then I need would have raise my credit limit)
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Excellent article. Having your ad spend/cash flow $$ in a separate account is great advice.
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Shouldn’t it be noted for beginners that you only really need to worry about “cash flow and a decent credit limit” when starting out PPC style (not a smart thing o do anyway) vs. affiliate marketing as a whole?
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You definitely need to have some extra money for a rainy day especially in this type of economy. I would recommend putting money away on a weekly basis so it will accumulate over time
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100% agree with you, I was/am going through that problem now. I’m not doing massive numbers but like you I didn’t start with any suitable investment and my credit limit on my cc sucks (I can increase it this month 🙂 ).
Touch wood I’m about sorted for the level I’m at now having enough to back me and work on some more campaigns, I’m sure each time you take things to the next level cash flow will be a problem unless you have a nice bank account balance.
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Ya, it’s a never good idea to spend all your money on one thing – even if you know that you’ll be getting more the next day. Why? Simple. Because even if that payment still doesn’t come the next day, you’ve got yourself covered.
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This is perfect, I am looking to do something similiar very soon and this article makes perfect sense.
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