How I Make Money Blogging: 2010 YTD

17 | Posted In Make Money by David

Being a professional blogger is a business like any other in that you’ve got income and expenses.

It is easy to see bloggers like me talking about making full-time livings online and assume we’re just living large, eating caviar and wiping our butt with twenties.

The reality is that it takes money to make money. We don’t keep all the money we make.

So, today, I thought I would give a report card on my business in a revenue sense, but provide both sides of it. Income and expenses.

Income

First, here is a percentage breakdown of my income sources for 2010 YTD. I’m still torn on whether to divulge actual income figures (hello IRS!), but I will say that I publicly stated that I brought in about $204K in 2009. Well, I’m well on my way to breaking that barrier for 2010. I’ll just leave it at that.

Screen shot 2010-08-22 at 5.48.10 PM.png

As you can see, advertising is now only 17% of my revenue. The “PCMech” segment is from my membership program over there. Affiliate promotions represents affiliate marketing that I’ve done on both this site as well as PCMech.com. Blog Masters Club has generated the largest share of revenue so far.

Now, onto watching the money disappear. ;)

Expenses

This split is much more segmented than my income split because I have a lot more things where the money goes.

Once again, I’ll not divulge the actual amount of expenses, but I will say that the business is definitely profitable. The business expenses are a bit less than half of the gross revenue. Being that I am an S-corporation, the remaining revenue carries over to my personal income, where (of course) my family spends the rest. Wife and kids are good at that. ;)

Screen shot 2010-08-22 at 5.45.13 PM.png

A few notes about this breakdown:

  • Credit card fees are any fees associated with charging credit cards. This includes gateway fees, merchant fees, Paypal fees, etc.
  • Education is stuff I have purchased for educational purposes. Things like courses, membership sites and books. You have to continue to learn.
  • Travel is business-related travel to conferences, including hotels, food, flights, and cost of the event. I’ve only been to 2 events this year, but I pre-paid for another two. Conferences are an expenses, yes, but the networking value of these events is tremendous and it is an important part of the business.
  • Yes, I pay for one of our cars directly out of my business.
  • Commissions are money I have paid affiliates.

Looking Ahead

My business is doing well. No complaints. The year was a bit front-loaded in terms of revenue, but I have some things planned before year-end which will hopefully do well.

It takes money to make money, though. That’s for sure.

August is shaping up to be a pretty average month for me. I’m getting ready to ramp up things with the membership program over at PCMech (making some interesting adjustments, actually), and will be prepping to relaunch Blog Masters.

Will check in with it again soon and let you know. :)

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  • http://www.tonyteegarden.com Tony Teegarden

    Dude this is awesome and I'm glad to see you share a well rounded aspect of the blogging game aka. A business.

    I've come to experience people believing that an internet business is somehow different from any other kind of business.

    Love how you show both sides of the fence. Not sure I've seen anyone share this so thanks!

  • http://www.mikeslife.org Mike CJ

    Interesting to see the expenses and note that almost half your income is paid back out to other people via commissions and payroll. That's small business entrepreneurialism in action and the backbone of capitalism. Nice one. :)

  • http://davidrisley.com David Risley

    Well, its half my expenses, not half my income. But, yeah. :-)

  • http://www.mikeslife.org Mike CJ

    Typo, thanks!

  • Yes

    bro! kailangan ba talagang gumastos?

  • http://website-in-a-weekend.net/ Dave Doolin

    David, if you don't mind, a couple of questions I have been wrestling with:

    * Are you treating yourself as a W2 employee of the S Corp? If not, why not?

    * Is your payroll strictly W2 and contractor strictly 1099?

    * Do you charge payroll as lump sum, or split tasking into accounts reflecting the task. Example: social media work to Sales & Marketing, document production to Cost of Goods Sold, etc.

    * Do you account for commissions as something like Other Direct Costs (ODC), or do you charge to something like Sales & Marketing (or something else)?

    I could probably (definitely) go on, but those are the one's I'm most curious about.

  • http://www.mikeslife.org Mike CJ

    Yo hablo español perfectamente, pero no tengo ni idea de lo que es el idioma

  • http://davidrisley.com David Risley

    - Currently, I'm not treating myself as an employee. But, I'm not saying that's the right way to go. In fact, my CPA advises differently. I just have yet to make the change, and quite frankly, it rubs me the wrong way that I would need to pay that kind of taxes for my right to work for myself.
    - Yes, payroll is strictly for W2, and my contractors get 1099's (if required).
    - Payroll is done as a lump sum cost. Too much work to divide it up by task.
    - I just put commissions into Quickbooks under its own category: Commissions. But, it would definitely be considered a marketing cost.

    Hope that helps. I'm no accountant.

  • http://website-in-a-weekend.net/ Dave Doolin

    Thanks. I suspect the tax cost could be legally finagled to come out around the same, given that paying on the 1040-ES schedule neglects the self-employment tax (gotta love that, biggest check I ever was to IRS for “self-employment”).

    I'm currently sole prop, but I'm planning to W2 hire myself via my mothballed LLC in the near future. It seems to make a difference for credit bureaus and whatnot. Seems silly to me.

    Anyway, thanks for taking the time.

  • eblogr

    Thanks for sharing both sides of the story, David… and not just the sexy, make money while you sleep bit but also the spend money while you sleep as well. It is a business after all.

  • Anonymous

    Wow, loads of little different expenses.
    Nice to see that most of your income comes through Blog Masters Club, hopefully my big earner will be my programme once they are launched.

    Stuart
    http://stuartmcminigal.com

  • http://davidrisley.com David Risley

    Yeah, tis true. Our society seems to be rigged to make it harder on entrepreneurs and easier on people who have regular jobs. So, sometimes it is helpful to W2 yourself just to fit into the mold for some reasons. Like getting a mortgage, for instance.

  • http://www.specialtyansweringservice.net Answering Service

    Although you aren't the first to post graphs of what you make blogging, you're the first I've seen to post your expenses too. That takes a lot of courage, for sure. Kudos on your success!

  • http://www.slymarketing.com Jens P. Berget

    This is really interesting. I always thought that advertisement and affiliate promotions was a bigger percentage.

    What you’re saying is a lot like this post from copyblogger.

    Thanks for sharing.

  • http://www.megabizflakes.com samuel

    lol thanks for sharing! umm.. as a family man you need to spend it out!

  • Ned

    Very interesting. Your business runs much like mine. It is amazing that so many people think that if you charge, say $10.00 for some item – that the $10.00 goes into your pocket. People who are not in business have no idea about overhead! I am not asking for an answer, but did you ever divide your net (after all expenses and taxes) by hours worked? I have been self employed for almost all of my working life and I wouldn't have it any other way. But I must say, that work for a lot of people who are employees, who make far more than I do – but i still love what I do and don't want to change.

  • http://www.socialat.com Prasenjit

    Thanks for posting these great blogging tips. Blogging is a habit and making money out of blogs is a skill.

    Thanks.