Managing the Financial Aspect of Your Affiliate Business
For people who are involved in an affiliate business, managing the financial aspect of the business can be very tricky. Even if your affiliate business is doing very well, the finances of the business, if managed badly, will whittle away the profits.
Segregating the Business
To be able to manage your business finances, you will need to segregate it from your personal finances. The first step in this direction should be opening up a new bank account for your affiliate business.
People who maintain a common account for their personal finances as well as their affiliate business have no way to determine business earnings and manage them. They tend to draw a lot of money from this account, and cannot make savings related to the business.
Make the Business Self-Sustainable
Any business should be able to pay costs associated with it, and earn a profit. Once you have a separate bank account for your business, you can make your business self-sustainable. This may not be possible in the initial days of the business, as you might have to pour in money from your personal account.
This is a good practice to follow right from the beginning to determine how much money you are pouring into the business. Any costs arising from the business should be paid from this account. This includes business phone bills, internet bills, advertising expenses, etc. You should also charge rent to the business for the facilities that it uses in your home.
It is also a good idea to pay yourself a fixed salary. To operate a business, even if it's a home-based business, you should run it like a professional business. You may also pay yourself a bonus once a year.