DamageX

Before you even consider whether you should re-invest some of your profits back into your business, you need to ask yourself whether you're doing this to grow, or just to get by. Yes, it's true, quite a few people are satisfied to make a decent living from their online ventures, not least due to the fact that it gives them a lot of freedom to work from home, take the breaks they want whenever they want, not have a boss yelling at them when they fuck up and so on. Sometimes they could actually make more by taking a day job, but due to the aforementioned freedom they enjoy, they choose to stick around.

So, you need to decide whether you want to grow or just make a decent living. If you just want the latter, then you shouldn't worry too much about re-investing your profits, for several reasons. One is that your profits will likely not be too big (not that this should be a problem), so you'll need most of your earnings to cover your running expenses. However, you should still start considering a contingency plan, in case whatever it is that makes you money now won't last forever. And trust me, it will not last forever. Which is why you should be wise enough to start a savings account and put aside 5-10% of your monthly income. You need to do this every month, because for all you know this entire industry is going tits up tomorrow and you're up shit creek without a paddle. Don't believe me? Ask around, we have plenty of webmasters around here who used to do six figures a year and nowadays barely get by. Also, you need to set aside some time to do some prospecting and some serious thinking as to what you could do if you were no longer able to make money doing whatever it is that you're currently doing.

If you want to grow, your task is slightly more challenging than just having a Plan B. First of all, you need to save as well, to make sure you don't end up in the poorhouse, should this industry dry up. You also need to re-invest in your business. How much? Well, that's entirely up to you, but part of how much you're able to invest has to do with how wisely you spend your money on everyday living. Provided that you want to make it big, you need to keep improving your competitive advantages, one by one or several at a time, depending on how big an investment buffer you have. In order to do this you need to not spend money on other stuff than on things that will improve your business.

Yes, it's a trade-off, just like everything else. You need to pay a price TODAY for the success you want to enjoy TOMORROW. There is no way around it. So, making decent coin and want a new car? How about not and instead of buying a new $100K Mercedes invest that money into automating your business even more? Or hire staff? Or managers to handle your staff? Or better scripts, more content, more sites, more traffic? And no, you don't need $100K, it was just an example, you can start with $500 or even less. You just need to identify where, in your current operation, the disposable money you have for investing would do the most good and put it in there. Sometimes you may even need to save up for a month or two or three, before you can make a useful investment. Stop treating things as costs, unless they don't add any value whatsoever to your operation. If you think of things you need for your business as costs you will be more reluctant to shell out the cash for it. Think of them as investments instead and run some numbers on how long it would take you to recoup that investment, how much money it would generate/free up for other investments and after how long and how you plan on investing that money. Keep thinking in terms of benefits and value, instead of in terms of cost. Think of it as input which will eventually end up generating a bigger output, through value added.

One of the worst mistakes I have seen people make, repeatedly, is take that $100K, which often is their FIRST $100K, and buy a new car for it. Or even worse, take their first $50K and buy a $100K car, by financing the other $50K, thus also incurring an interest cost. A brand spanking new pussy magnet or penis enhancer or whatever you want to call it. Then, 5-6-12 months down the line business goes bad and they have to sell off the pussy magnet, for half the price they paid for it. Think that's money well-spent? What if they, instead of buying a car, which not only costs in terms of insurance, gas, parking and whatnot but also loses value every day, thus costing even more, would have invested that money into say buying servers and doing co-location instead of renting their servers from their host? Buy servers at one-time price and then host for half the monthly cost. Investment recouped in 4-8 months and after that all profit. Think that would've been smarter?

Anyway, you get the point, don't spend money on luxury until you actually have more money than you know what to do with. Not saying you should never treat yourself to anything. By all means, do treat yourself, you work hard so you need rewards too, in order to keep yourself going. But you need to be totally aware of the fact that, in most cases, the more you enjoy today, the less you will enjoy tomorrow and vice-versa. Be smart and save some money for a rainy day and be smart and re-invest whatever profits you don't depend on today. Make your business better, faster, smarter. That will make you richer, not the car you buy today and have to sell tomorrow for half-price.

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tuab

Great post, thank you

JACOBKELL

Huh i first need to get those 100k$ I invest all the time but in most cases i smoked money or returned only half of invested money.Still waiting for results of latest investition.

The Hammer

Terrific post here that everyone should read on a regular basis as a reminder of how to operate a business correctly.

Money is a tool used to grow a business and it seems so apparent that if a carpenter sells his tools for a fast buck today he can't work tomorrow, yet so many make that very mistake everyday.

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The Professional

you'd think it would be common sense... but I like how you expressed it all

for everyones information... my car has over 250,000 km and is probably worth about $2k

live the dream !

nice post DX

oil

wise man, wise words

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lfcII

I will not sell my pussy magnet for any price!

Nice post and good advise for any business plans you have.

Kind Regards,

Les

gandalfuy

well said!
lots of interesting and true things there!

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monsterman

eheh i know lots of people that do the exact opposite. id like to link them to this thread but i think they are too stupid to understand this. so fukem

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scarlettcontent

interesting thread.. reinvest I say.

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fdtdchopper

Completely agree I use some part of my daily income to buy good quality traffic every day enhancing profits and trade quality. Really good post.

I expect to be reconsidered at this very good forum as a serious webmaster. Apologize for past misunderstoods and if possible prove I play at the same team.

Best Regards

Fernando
www.sexoagora.net/indexwm.htm
webmaster@sexoagora.net

After Shock Media

I am willing to spill my guts here, the good, the bad, and the ugly. Not sure how many around here may even know whom I am as I usually frequent one other board are rarely post elsewhere.

I started my career in adult early on at the prime age of 17 running after converting my games related BBS to adding my very first exclusive adult images. That alone brought me more money than any teenager should really be given. Several years latter and after spending more money than I would care to remember I stumbled onto the web. There was adult but it was sparse and I had a good content operation going. Needless to say making money was about as hard as getting wet laying on a floaty toy in a pool in Orlando during a hurricane. Honestly I bought my friends cars for fun, I would have mid to high five figure weekends. Hell during one holiday season I got a wild hair up my ass and cashed some checks and decided to go around my small town giving every homeless person I could find a couple thousand bucks. Guess that was silly as they remained homeless and I am sure only dealers got rich, then again it may have helped a few. I regress though. The one thing or person I did not much think of was myself. Actually the only three sound things I did was buy a house, pay off a cheap car, payoff everything in my credit report. Oh make that four things, I also prepaid some bills in advance.

Am I well off now? Guess that's all perspective. Most all my current wealth has been recently earned though, as in the last 2-3 years. Yes that means well over 7 years of wasted money, investment opportunities, and business growth. Actually it was only 3 years ago that I was 90 days behind on my mortgage facing possible foreclosure and hitting up food banks twice a month.

What changed:

First off I realized I was to blame, nobody else. After swallowing that huge pill I took a careful look at every aspect of my business as well as my daily expenses. Below I will list every tip I used that allowed me to once again fall into higher middle class income in America and California to boot.

1. Off the bat get yourself familiar with spreadsheets. Numbers do not lie to you.
2. Create a very detailed household spreadsheet. Every single night add in every receipt (get them everywhere) and input in every penny you spend every day for your general household.
3. Create another detailed spreadsheet for your businesses. Keep track of all costs, ROI of every single purchase, and anything else that has a cost or profit attached to it.
4. Audit both spreadsheets every quarter. Example I found out that buy paying at the pump for gas instead of walking 100 feet it was costing me an extra 200.00 per year. For some that can be a server payment. Then also try to renegotiate any costs. You would be surprised how many companies will lower interest rates or monthly charges if they even think you can switch elsewhere and the worst case is they say no.
5. Consider your savings account a bill. Yes tread your savings as another monthly bill that must be paid. I personally send all the money to ING since they do pay a good interest rate (hit me up so we both can benefit if you want to start an account). I also suggest that it should be at least 10% of your income but ideally it should be 20%. Once this money is put away also think of it as gone. This is your general savings account.
6. Start a separate business savings account. Yes another one that should be like a bill. I suggest pulling out 15% of each check. This money also should be placed into an interest bearing account like ING. However this money is touchable. Yet only touchable for business investments or new business ideas.
7. Learn to cook. Trust me eating out, even fast food. Or buying coffee's and such costs you a great amount of cash. Learning how to do it yourself honestly is not only faster, it is cheaper, and it is more healthy.
8. Start a project, stick to the project, and do not back burner that project before you spend money on another new idea. Way to many hop around from one thing that is 75% done to something else that almost gets done before a new fad catches their eyes.
9. Failure is good. You will never know your true self until you fail.
10. Monitor each of your projects. After a given set of time if it is not growing it is just costing. Cut it off and sell it at a loss if needed. Do not kick yourself if someone else makes it work, face reality you couldn't and it was draining you.
11. Do not become a domain whore. Ya we all get ideas and check for the domain and before we know it we have whipped out the good ole credit card and have purchased at least the .com .org .net and possibly the hyphenated versions as well. Ya its like 10.00 a piece but that is like 30.00 to 60.00 right there and you got to pay for them again next year.
12. Do not get stuck in the license game. Honestly if you find yourself buying the same license over and over again at 50.00 to 100.00 a pop and it is not too damn complicated. Highly consider running over to rentacoder and having your own custom version whipped up that you own the rights to. Yes it may cost you 500 to 1000 bucks but you own it. It is now an asset that you can rent, sell, or just use yourself and stop having to shell out every time you use it.
13. Find additional revenue streams for the same material. Way way back when we had to buy content and I was selling it. I used to tell clients to flip the image so that it would look like a new set to tgp and link lists. Sure that is nothing now but for people like myself. I will use content inside of my paysite. When that has been up for a little while I then release it at places like clips4sale and hot movies. Then I also add 4-6 scenes together and offer up DVDs to clients. Hell I try to squeeze every penny possible out of the material. Eventually it will all end up in my mega site that has a super low price tag associated with it. Yes recycling at its finest.
14. Until your well off a car is just another tool. Personally for a long time I went without one and used public transport and or my scooter to go to the store. Eventually we bought a beater that has sense been fixed up. It was a 1969 ford pickup. Yes insurance was less than 40.00 a month, it did use a little more gas but we consolidated our trips. It was super easy to fix, hell my wife bought a used (yes used) manual. Went to a u-pullet car place (used parts) and has rebuilt that truck herself. It is now not only super cherry, it is also worth several thousand above the 500.00 we paid for it. Though initial plans was to run it into the ground, junk it, and buy another throw away car.
15. Once you can get a chance stop renting. This does not mean buy your dream house either. This means buy something modest and just big enough to let you live in it. My current house is under 950 square feet. Sure we have since remodeled it a great deal and acquired other properties. Yet the heart of the matter is even though property values have taken a dive. I have earned 21,000.00 a year for the last 10 years living here without paying rent (rent would of been roughly 8,400.00 per year. Which would you rather have?) And I still have not remodeled the most important room in the house being the kitchen.
16. Using coupons does not make you poor or cheap, it makes you frugal and smart. Same goes for using many store brands instead of the name brand equivalent. Naturally there are certain things that just can not be matched but there are a huge amount that can. This alone can save you hundred a month. There are some great sites about how to save as much as possible at stores and where to get the coupons. Trust me it is nice when your bill at the register says 300.00 and then after the coupons you hand then 95.00 and walk out. Yet some think it is not "worth the time". haha
17. Do not follow the crowds. Stick to what you know and make it work. Sure feel free to learn new things and give them a try. But only devote money to them when you can afford a risk investment. Yes investing in anything you do not have a track record with is a risk investment.
18. Do set goals and do reward yourself with some meaningful yet not to expensive reward.
19. Learn to make and use business plans. Seriously this is not a joke. Also keep them updated.
20. Let go of some control. I know it may be hard but you can not do it all yourself. When you can hire people or develop ways to automate something to free up some of your own time. Often there are tasks that are just time consuming and if your really interested in growing your business your time may be spent better doing more important tasks.
21. Embrace criticism and encourage it. Fuck your ego and listen to what other may be saying. This does not mean change your ideals or morals but be open to the thoughts and advice of others.
22. This one may be hard but it helps a lot. Keep normal hours. Set yourself a period during the day that is work time. Personally for me that is 10am to 6pm. Sure I may work longer on occasion, and I often may fuck around after those hours. However between 10 and 6 my wife knows I am working and I get minimal distractions. This really allows me to concentrate on what needs to be done and my all important to-do list. Not to mention I have a wife who does not feel that she is the mistress to my computer.
23. Help those below you, many will never repay but it will make you feel better and alas some do not forget and will become very loyal associates in the future.
24. Never forget to give a small kickback to anyone that hooks you up, gives you that killer idea, refers you some work, or helps you a bit in a way that turns into extra cash for you. Do this and people do not forget.
25. Lastly have some fun and meet some people. Just remember to always be yourself and never try to be someone you are not, even on the boards.

fatfoo

well said, thanks guys

CastleOfXXX

Those are great reads

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V_RocKs

Very nice article.

I started playing this game in June of 2003. I thought I was going to be the review king. I got into a review site with a friend of mine and quickly learned that friends make the worst business partners.

For about a year I made about $750 to $1750 a month. I ran several TGP's to moderate success and posted galleries. That year I used the money as toy money. Something I could play with and spend as I pleased. It was extra and I certainly wasn't a business.

In the second year I started paying attention. I read between the lines on the boards and found that a lot of people give out good information if you do some research. In that year I learned the mentality of pay-to-play. I bought scripts for my TGP's and got my own server and instantly went from $1800 to $3500 a month.

That was when I said... WHAT THE FUCK HAVE I BEEN DOING!?!?! Ohh my GOD! I have been pissing away 1/2 my profits every month because I thought I was being clever and doing things for cheap or free. All I was really doing is short changing myself.

At the end of that year I became a business. By years end I was doing $10K a month.

Now I make much more. I guess you can look around you and see many different examples of pay-to-play or lack there of. Guys living in nice homes and never worrying about money pay to play... Guys who do the hippy thing and try to get everything for free and live pay check to pay check are not paying to play. And it shows in their lives. Sure, not everyone who does such a thing is an idiot... but the ones that long for a Ferrari are... because it isn't going to magically appear no matter how many bowls they are smoking.

selena

ASM, that was an incredible post in an incredibly good thread.

#8 is my downfall.

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FrozenJag

Good Good Stuff. Thanks guys!

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Tara

This thread is gooood

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Hed Kandi

After Shock Media

Thanks selena.

I will try to post around here a little more. Seems as if some of the users are more attentive and appreciative of what others may willing to share.

Just be forwarned sometimes I may post things people do not want to hear.

PhilR

What a brilliant thread! Thanks DamageX, and thank you too After Shock Media too - inspirational!