Maybe it’s just me, but everywhere I go, I ask myself the same question:

“How the heck do they make money with that?”

I go to McDonalds, see how many people work there, figure about how much per hour they’re making, see how long McDonalds is open, and wonder how many happy meals, or Big Macs they have to sell to make a profit on a daily basis.

Every business has a fixed cost, be in inventory, property costs, taxes, payroll, or salary for the owner. Bloggers have fixed costs. Web hosting and domain registration isn’t free, unless you use Blogger or Wordpress.com, but you’ll find that most serious bloggers have their own domain and servers. When bloggers are actually able to make money thru their blog, I wonder what they do with that money. I’m relatively new to the blogging scene, so I can’t think of any other fixed costs to blogging. So after paying their hosting and domain fees, is the rest of the income free cashflow?

It seems that alot of the people who read the ‘how to make money online’ blogs want to be able to quit their job and have blogging be their primary source of income. While that would be nice, there’s no way I could handle doing that. My JOB is that of a trucking dispatcher; I send semi tractor-trailers to shippers to pickup and deliver to customers. It’s a detail-oriented career and I love it to death. I’m the type of person who MUST keep his mind occupied, otherwise I’d go crazy! It’s just like if you won the lottery, would you quit your job?

What would you do with $5000 per month from blogging? Would you quit your job?

Here’s exactly what I would do:

• Speed up current debt repayments while investing $500 per month into my current stock profile
• Enlarge current emergency fund from 3 months to 1 year’s worth of JOB income
• Inject more funding into current businesses to expand
• Save up and make down-payment on larger house
• Pay off new home
• Invest the income

Every point, except for buying a larger house (wife would insist), is working towards not only securing future income, but also expanding future income. That’s why, currently, even though I could take a small salary out of my current businesses, I don’t; all business income is directly reinvested back into the business, along the lines of cash management established in my business plans.

I actually have a written cash management plan I wrote long ago, but I can’t find my old business journal (too busy actually running the business to write a journal about it anymore), so I’ll wing it.

We check to see if 90% of the monthly income will cover the fixed costs and any variable costs that have popped up. If it does, take 10% of the monthly income and put it into the investment capital pool, the rest goes to paying off monthly costs. Any leftover income gets measured against the predetermined business plan goals in expanding the business. If the leftover income will allow the next goal to start, it does so, if not then the leftover income goes into either the company’s money market account or into CD’s; where the money goes is a judgment call depending on how long I think it will take to pay the investment to start the next step on the business plan.

It would be SO easy to pocket that leftover income, but then my businesses would never get where I want them to be. Businesses are always a work in progress; they’re never exactly where you want them to be. While the end result of those businesses may be pie-in-the-sky goals, you take them one step at a time in a preplanned and measured set of mini goals. When the business is where you want it to be, then you can enjoy the fruits of your labors.

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