Budgeting is important for any business but especially being an Affiliate Marketer you want to keep your budget at the front of your business. When I ask most affiliates what their budget is, a typical response is: “unlimited as long as it converts.” Typically I reply with an LOL because wouldn’t that be the case for everyone?! If you have a campaign that’s making a profit and yielding a solid ROI wouldn’t you do anything and everything to make sure it was funded 24/7/365? That’s where a lot of “new” affiliates fall off. Successful affiliates budget accordingly starting at the company level, a campaign level, and then arguably the most important, a personal level.
If you’re an Affiliate Marketer and your sole income is receiving commission from promoting another product or service then you better have a company budget! For those of you just getting started you need to have an amount of liquid capital available about how you’re going to fund your company and for how long. The industry veterans out there reading may understand the concept of this while getting started but it’s also equally (if not more) important to budget accordingly with growth. In the beginning you need to consider how much money total you have to devote to your new business. When the budget is depleted, you then make decisions based on performance. If you’ve made a profit you analyze how much you increased your budget and then re-budget according. For those of you that are already success you examine your budget every quarter and look at how you’re spending your money to further diversify and scale your current success. Regardless of skill level you should always be refining and examining your overall company budget.
The company budget is good because it gives you an overall cap to work with. Being a successful affiliate for over a decade I’ve always understood I could never spend all of my budget on one campaign; that would be silly. Obviously the more campaigns I attempt the better my odds of finding success… Right? That’s not always the case but you should look at your affiliate business like a stock portfolio. You need to diversify your investment and have measures in place so you’re never without revenue. That being said you need to use your company budget accordingly.
Most successful affiliates dedicate a percentage of their company budget just to testing new campaigns. Affiliates that are just getting started need to focus on testing just one campaign at a time but not exceeding the budget allocated for that particular campaign. So for example you’re initial company budget is $5,000 and you’ve set aside $4,000 for creating campaigns and you’ve decided that initially you’re willing to invest $500 in an offer to become profitable. Investing your budget into “one campaign” would get pretty old I would think but you’d be surprised the number of affiliates that make this mistake.
Your personal budget is something that should be considered as well. Obviously if you’re just starting out to do this part time then you’re not going to have to worry about providing yourself with a primary income. However if you are going to be doing this as your primary income you need to be extremely disciplined and understand how you’re going to manage your finances. For some new affiliates this is a wake-up to analyze the capital they have available and how organized their strategy is. Affiliates that are successful should pay close attention to their personal budget as well because money can do funny things to even the smartest people. If you’re investing the majority of your budget into yourself personally then you’re on the quick road to failure. This is an easy industry to get involved in the “perception” and spend way more than you can afford on luxury items. Regardless of your company budget, you want to make sure your personal budget is less than your campaign budget, so you’re re-investing into diversification and scaling.
Set Your Affiliate Budget:
- Company Budget
- Campaign Budget
- Personal Budget
Effective budgeting is what fuels successful companies. Most of the time when a company fails, their budgeting is always a factor into the collapse. Regardless if you’re an industry veteran super affiliate or just getting your start you should have a master company budget that’s broken down into campaign budgets so you can launch campaigns. If your business solely relies you on promoting someone’s product/service then budgeting is your key to a successful long term future. It’s important to remain selfless and re-invest profits to become more diversified and consistent with successful campaigns. You won’t have time to drive that nice whip anyway. 😉
Ryan Gray is the founder and CEO of NameHero, one of the fastest growing independent web hosts in the United States. Ryan has been working online since 1998 and has over two-decades experience in Internet Entrepreneurship.