Help Your Business Grow by Reinvesting
August 28th, 2007
Sometimes the pressure of real-life and the mounting bills can dictate where the money you earn from your online business goes; however, it always seems to go to places other than back to your online business. This was a lesson I learned early on — if you don’t reinvest in your business to help it grow, it will stagnate.
Reinvesting in one’s business is crucial to the growth of that business. It’s also the topic I’ve been reminding myself to discuss for the longest time. But, after some thought, I figured it would be fun to work on a small reinvesting experiment.
It would be prudent, at this point, to mention this isn’t a short-term experiment. The end goal is to build a sustainable passive monthly income of $5,000 or more (and growing) at the end of a 12 month period. What’s the catch? I plan only to start with a budget of $20.
Let’s rewind a bit so I can explain. If you want to get technical, I’ll be starting with $40, but I only plan to invest 50% in my business to get it started and that’s where the $20 budget comes from. (I can, however, choose to use the full $40 if I feel comfortable doing so.)
The initial goal is to turn that $20 into $200 ($180 net profit). From that $200, I plan to take 50% and reinvest it in my business. That $100 then becomes $1,000 ($900 net profit) and $500 reinvested becomes $5,000 ($4,500 net profit) and so on. In case you didn’t catch the pattern, I’m using 50% of my income to reinvest in my business with the goal of multiplying it by 10.
These numbers are slightly arbitrary. I could easily have gone with a model that quadruples my investment. For instance, turn $20 into $80, turn $40 into $160, turn $80 into $240, and so on. Instead, I’ve elected for producing the highest returns for my investment.
Throughout the experiment, I plan to update here on what I’ve accomplished, methods I used, and future plans. You’re welcome to participate too if you feel so inclined. Keep in mind that above all else, it should be a fun experiment for you. You’re welcome to modify any part of it (except the whole reinvesting part) to suit your personal needs.