It can be very easy for the novice Internet Marketer, who has separate income to invest in business, to spend freely on information products and AdWords campaigns. Rationalizing that "You have to spend money to make money" is very easy to do. Don't fall for it! It's a bad idea and an unsound business practice. Unfocused spending can become a habit that is hard to break. Too much debt can stifle a business at the time when a bit of credit or cash could carry it over an economic bump in the road.



There are times when being generous to your customers will reap even bigger profits in the future. Planning, in advance, is absolutely necessary to make sure your generosity isn't killing your bottom line. As you grow in your business, you will learn how to "leverage" free bonuses, "loss leaders" and other ways of giving more value than you receive in payment. NEVER indulge in giving away value without a clear plan for recouping the loss in the future.

Copying what someone else does, without understanding why and how that person uses it in business is another major mistake the novice business owner can make. Just because your competition, with years of experience and financial reserves you do not have, gives away products or services at a loss does NOT mean you can do the same. Use you imagination and find ways to offer additional value or content without dipping into your capital to do so.

The same goes for spending on outward appearances. You really don't need a company car if you're an Internet Marketer. The same goes for extravagant clothing, office space, unnecessary staff, offline advertising just to "brand" yourself, etc. Many of the practices of "brick and mortar" businesses are often a waste of money when it comes to physical appearances. Feel free to spend your actual profits on yourself, as a reward. Just don't pour cash down the drain with the excuse that, "It'll make me look good" offline.

Not every spending decision you will make has to be determined by what is cheapest. Sometimes, the most expensive solution will end up being cheaper, in the long run, than a less costly solution that doesn't perform. Having to do something over, at a loss, can be very costly. Examine carefully what you need to accomplish a task and purchase the best tool for that job. In many cases, there will be free or very inexpensive software and "scripts" that will do the job as well or better than the costlier versions. In other cases, the free or cheap version will just get you into trouble. Learn to identify the differences!

Finally, learn the value of measuring your "metrics". Statistics like how many visitors you need to make a sale, what percentage of your list are active buyers, how much your AdWords cost-per-click is changing, etc., will allow you to find ways to save money and increase your income. "What can be measured can be managed." Learn how your particular business model can be measured and tested to improve your profitability. Sometimes, a simple change can increase your profits manyfold. Simply increasing your conversions of views to sales in one area could be expanded to many areas, multiplying your profits with just a simple "tweak".

It can be seductive to see money pouring into your PayPal account. You may be fooled into thinking that a bunch of money automatically means success. Even worse, you may be deluded into thinking that once it starts, it won't stop. There are no guarantees in business. Careful planning and cash management is vital to your survival. Get help in learning how to protect yourself and your business from unnecessary losses and finding ways to increase your revenue. Never leave that to chance!