Think Website Investment in Terms of ROI

Millions of individuals start up their own websites, dreaming of getting some extra income besides their full time job. Usually, that extra income won’t be much, maybe $10 a month. Compared to what they can earn from their daily job, that $10 isn’t worth mentioning at all.  Thus, they feel ashamed to describe their online business in front of others, and always tend to ask questions like “how can I earn $100 a month from my website”. Well, let’s try to think of website investment from another perspective.

Business people always assess business investment in term of Return on Investment (ROI), which means, how much you can get given a certain level of investment.  Put in another way, you can’t tell a business is good or not by only looking at the absolute dollar return, but have to relate the dollar return to your investment. For example, project A needs an investment of $5000 and will bring a return of $10000. Project B needs an investment of $10000 and will bring a return of $15000. As you can see, project B will bring a larger return. However, project A is actually better since its ROI is 2 (10000/5000) whereas project B is only 1.5 (15000/10000).

The same logic can be applied to website building. Let’s assume that you are getting $10 dollars per month from your website, which is $120 dollars per year. You might think $120 a year isn’t worth your efforts from the very beginning. However, you can only arrive at a safe argument by taking your investment into account, too. Then, how much do you have to invest to a website every year in order to earn $10 per month? From my own experience, only $47.6 (domain and hosting fee) will do. The organic search engine marketing will be enough to accomplish otherwise costly marketing task. So, the ROI should be around 2.5 (120/47.6), which is quite attractive.

Generally speaking, you can’t expect a huge return without incurring a matching degree of investment. Don’t blindly envy those webmasters who claim to earn $1000 a day from their websites. It’s not because they have mastered mysterious technique for online business, but often because they have spent a lot on their online business, in terms of the following ways:

• Work full time on their online business
• Have engaged in online business for a long time
• Operate tons of websites.
• Spend a lot on traffic, marketing and advertising
• Others…

Hence, if you think $10 dollars per month doesn’t meet your requirement, don’t blame yourself as a poor player in online industry, but rather, try to think in the other way round: Is it because I didn’t invest enough? If you want to earn more, you can spend more time, update your website more often, build more quality websites or spend some money on marketing and advertising. If you can invest more in terms of both time and money because you are fully occupied by your full time job, it’s OK, since an ROI of 2.5 is already an enviable result by many offline small practices.