Having a great product or services means nothing if people do not know about it. Think about it - if you had invented an operating system that is way much better than Windows, Mac OSX or Linux, but no one knows about it, how on earth are you going to make money out of it?

When only a handful of people know about it, say 5 of your friends, then your potential revenue will come from the sales by these 5 people, and assuming they will recommend your new operating system to about 5 more, you'd get about 30 people who knows about your product.

In business, since time immemorial, our revenues is about 10 to 20 percent of our market - McDonald's become the number 1 in the fast food industry by capturing 14 to 16% of the world's fast food market, and Amway holds only about 20% of the network marketing industry to ensure their number one spot.

So, if 30 people knows about your product, chances are a maximum of 20% will buy it.

Do the maths - 20% x 30 = 6 sales. If your profit per sale is $50.00, then you will be enjoying a total profit of $300.00! Fantastic!

Or is it?

But what if you promote and advertise your products and services to the masses? How about having an online marketplace for your business, and then advertise it in various channels that could generate visitors?

How many sales would you make if 2,000 people visit your online store in one week?

Let's do the same maths again:

---> 20% x 2,000 people = 400 sales.
---> $50.00 x 400 sales = $20,000.00

Not bad for a week. In fact, if only 1% of these visitors are converted into buyers, you would earn a profit of $1,000.00 per week. Within a month, you can be enjoying $4,000 by working from home on the Internet!

Of course, you might think that advertising cost will kill you. But as a business owner, you can be intelligent about it. Do the maths. If your advertising cost is about $250 a week, but it can push people to know about your product (as calculated above), will the profit justifies your cost?

Getting $1,000 for every $250.00 spent - is it worth it?

And, don't forget to do the maths on your own life - your day job. How much do you spend to enjoy that end-of-the month salary?

$50.00 for petrol per week x 4 weeks = $200.00 per month
$10.00 toll per day x 20 working days = $200.00 per month
$10.00 per day spent on lunch x 20 working days = $200.00 per month

Total monthly expenditures to keep your job = $600.00 per month

If you are earning a salary of $2,500.00 per month, that means you are actually spending $150.00 per week to obtain $625.00.

Is it worth it?

It's your life. You decide. Do the maths.

Posted on 25 January 2009