Reinvesting in Your Business - How Much?

A fairly common question I get is how much should I reinvest in growing my business every month? There’s really no easy reply to the question and it depends on quite a few factors but I’ll do my best to outline a few ‘profiles’ that you might fit.

You Have a singled-out Site Sales Page for a Product > $10

You have a faraway pitch, a few testimonials, and eventually gather an mail address and later sell a product or sell your product right on the spot. In that case your investment should focus on no more than trying to bring potential customers to your site. Your make isn’t extremely urgent but your traffic is. In that kind of scenario I usually invest roughly 30% back into the business. Basically every 3rd sale you prepare, take that money and experiment with driving more traffic to your site via paid reviews, Yahoo or Google Ads, or paid hyperlinks. Businesses such as that can get great results from free search engine traffic, so compose certain you’re additionally building up organic hyperlinks to your site with the anchor text you’re optimizing for.

You Have a Small Informational Site and Depend on Ad Clicks

You have a small site, probably running a subject matter management system like Wordpress, and you have a few articles on anything. Suppose it is a site about tennis.  You would probably have a few articles on proper technique, the world’s best players, equipment reviews, and general data on the sport. All of your revenue comes from qualified visitors clicking ads related to the topic in either a PPC (pay per click) model like Google Adsense or commission based ads from selling products like racquets and tennis shoes through places like Amazon.com. I can nearly guarantee a positive return on a site like that. The key to reinvesting into that sort of business is to have a lower acquisition cost vs. visit return from Adsense or your favorite advertising service. For example, lets say your

site about tennis earns you $0.25 every moment someone clicks an ad about tennis. whether you can figure out how to bring in visitors for $0.10, you’ll earn $0.15 on every go, and be able to scale accordingly. Spend $100 on clicks and you’ll bring in $250. Joe provided some great tips on how to find keywords to target in the post How to Dominate the Google Search Results. An critical factor here is to find the ’sweet spot’ where your earnings and traffic are maximized. I’ll post more on that later.

A Forum/Social Network is the Heart of your Business

You rely on others to generate your subject matter for you. Without visitors your site would die, and you need your users to discuss, share, and spend day on the site. Reinvestment is fundamental to keep the site going. Long Tail keywords in search engines are your path to success. It is possible to boost your traffic in the search engines by taking a closer look and investing more heavily in acquiring traffic via these keywords. ROI on a forum can be lucrative whether you can maximize your new visitors from free search engine traffic. In that type of scenario I usually recommend investing up to half your revenue (50%) back into the business. It is fundamental that your forum be sticky and hangout place for your users. In order to compose that happen you’ll need to keep things fresh, and that takes investment.

Conclusions

Any business will require some sort of investment for optimal success. Find the right mix that works for you and don’t be afraid to experiment. The best results often come by accident!

I’m glad to be posting again, I’ve been in Washington DC the last few days picking up a car and it was quite the drive back to Canada. Here are some pictures!

Orginal post by WhyDoWork