Cash Flow Statements for Bloggers

There’s a growing consensus among bloggers that aspire to make a living off their blog: treat your blog like a business.

This concept is usually followed by advice about the importance of regular content creation, relentless self promotion, and a cornucopia of monetization recommendations from offering affiliate products to serving display ads.

But there are some other important, dare I say “traditional” business concepts that can be useful when building a blogging business.

In my opinion, if you want to make money blogging a key skill will be to monitor and manage the cash flow into and out of your blog.

Although, the majority of bloggers don’t keep track of their income or profits–having insight into how cash is coming into and out of your blog can help you make more money.

How do you figure out the cash flow of a blog?

Don’t be intimidated by figuring out the cash flow of your blog. If you can solve some simple addition and subtraction you’ll be able to figure this out. Let’s go.

Wikipedia.com defines cash flow as such: Cash flow is the movement of cash into or out of a business (or in this case a blog).

Step 1: Add Your Profits

The first step to figuring out your cash flow is to add up each source of income coming into your blog. Some common examples of blog income sources would be Adsense, product sales, and affiliate commissions. Here’s a sample below:

Source               Monthly Profits

Adsense                        $12.37
Product Sales          $456.08
Affiliate Software      $50.00
Amazon Affiliate       $10.00

Total Income:         $528.47

Step 2: Add Expenses (Money Exiting Your Blog)

Although blogging is a very inexpensive business there are a number of costs that can begin to add up: hosting, autoresponder, domain registration, and the list goes on.

Source        Monthly Expenses

Hosting                             $10
Auto Responder           $25
E-Junkie                             $5
800 Number                  $15

Total Expenses: $55

Step 3: Creating the Cash flow statement

Congratulations, you’re almost done and it’s time to figure out whether you’re making money or  seeping cash from your blog. Here you’ll simply subtract your total expenses from total income.

Source             Monthly Amount

Total income         $528.47

- (minus)

Total expenses    $  55.00

Net Cash flow: + $473.47

Alright! It looks like our little sample blogger had a positive net cash flow of $473.47 after expenses. Not bad.

So what’s the point of all this work?

There are couple of important lessons you’ll learn by completing this little activity:

- Where you can reduce your expenses
- Where the majority of your money is coming from (that could be a good place to spend even more time and energy developing further)

If you want make money from blogging, it’s time to start treating your hobby more like business. And one great way to make that transition is to create a cash flow statement for your blog.

About the Author

The guest post was written by Brett Alan of Start SEO Company, a search-engine optimization reseller business.

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