Profit From Freelance Writing

Profit from Freelance Writing & Internet Marketing

Every business, albeit selling products or services, online or offline, has to recover its costs before making any profit. This is a basic business principle. Very often unfortunately, business owners overlook or forget to include their own earnings cost; the salary that they need to earn at the end of each month. And this is a fatal oversight. I have written articles and books, and have made my work available for sale on the Internet. In doing this, I have discovered the power of the Internet and have done advertising through it. Freelance Writing and Internet marketing hold a wealth of opportunities to make good money but, as in all forms of business, there are costs associated; and an effort involved.

Breakdown of Prices and Costs

As with all products and services, generated income is measured in terms of the input costs plus effort (time), plus a margin (or mark-up). A portion of this is the profit one earns from it. Freelance Writing and Internet marketing is exactly the same in terms of cost input and time invested in the work. It doesn't require much input in terms of raw materials and overhead costs, but it does require a great deal of one's own time. And, as time is money, labour costs are calculated as Hours Worked multiplied by Hourly Rate. An important question to ask oneself is, "what is my hourly rate, or how much do I charge for the work I do?"

If I want to earn $2,580 per month as my personal income, I would equate this with the normal number of working hours in the average month, which is 172 hours (i.e. 8 hours per day times an average of 21.5 working days in a month). From this information, my hourly rate would have to be $15.00. The business would have to pay me $15.00 per hour for eight hours per day, Mondays to Fridays.

If I were to use a standard costing method to calculate my Freelance Writing and Internet marketing business costs on an average monthly basis, it would look like this:

Raw Materials

Band width 100.00

Printing and stationary 30.00

Computer maintenance 40.00

Internet & Hosting fees 15.00

"AdSense" (or equivalent) 30.00

Total Raw Materials $215.00 Per month

Labour (My time)

172 Hours at $15.00 per hour = $2, 580.00 per month

Overheads

Rent (apportioned) 100.00

Electricity (apportioned) 30.00

Telephone 30.00

Printing and stationary 20.00

Books and manuals 30.00

Total business overheads $210.00

TOTAL COST $3,005.00

If I worked for one hundred and seventy two hours per month then my total operating cost per hour would be $17.47 (Total average monthly cost $3,005.00 divided 172 hours per month).

Hourly costs:

Raw materials 1.25

Labour 15.00

Overheads 1.22

$17.47

Putting it All Together

From these calculations I can make the following logical deductions.

To recover all my costs, which includes my monthly income or salary from the business, I would have to sell products to the value of $17.47 per hour; or $87.35 per day; or $696.00 per week. Or, as mentioned before, I will have to sell products to the value of $3,005.00 per month. If these goals are not reached, I may still be making some income, but not recovering all my costs, nor will I be earning the minimum monthly income that I need.

Depending on the methods used to distribute freelance writing and to perform Internet Marketing, and dependent on one's products and their relevant demand for them, the achievement of this could seem like a tall order. As with all forms of work and business, one gets out what one puts in. From books and articles I have read, and information gleaned from a close friend, it is possible to generate a good income, and in some cases a huge income, from Freelance Writing and Internet Marketing. To use another person or a professional service to perform the Internet marketing function is an option, however it would be much more costly. You would need to calculate how cost effective it would be in relation to the benefits you'd receive from taking this option.