[beginner-intermediate bloggers] It’s funny how some people talk about making $150/mth on their weblog as if there was no effort put in. Now, I’m not putting down the amount - it’s fine, maybe even great for a young weblog. Rather, I’m pointing out that what’s probably more important is the Return On Investment, or ROI, of your blogging efforts.

For example, if you can write and post a few articles in just a couple of hours per week, then that $150/m return might be alright, especially if that time would have been spent, say, watching TV or something unproductive. On the other hand, if you could really have earned $X/hr in the time you spent blogging, then you need to figure out what your “expenses” were that month using the $X/hr as your cost per hour. Finally, you can determine your ROI.

Let’s take a poker blog as an example. It’s one that I write for someone, but for the sake of example, say it’s mine. Or in this case, yours. If you are spending two hours each night playing online poker, and spending a lot of money to make that $150/mth in revenue, then your ROI is probably very low. You’re possibly losing money - unless you’re actually winning at poker. In which case you might want to give up the blog.

On the other hand, if you’re still learning and you buy, say, a $20 poker book or dvd every month (including taxes), then the $150/mth revenue is part of a fairly high ROI. The simplest way to calculate ROI is as follows:

ROI = 100 percent x (revenue - expenses)/ expenses

So in this case, ROI = 100% x (150-20)/20 = 650%. Not bad. But you also have to factor in domain name costs, hosting plan costs, the electricity you spend using your computer to write your blog posts, etc. That’s going to whittle the ROI down a bit. And if you’re actually at a stage where you’re researching your topic, then you have to factor your revenue loss per hour. (Hopefully it’s zero due to borrowing from idle time.)

It’s easy to say your time is $20/hr, or even $600/hr, but if you really were not going to earn that amount during the time that you spent on your weblog, then your labour expense is only $0/hr. However, I suggest that you use a figure of at least minimum wage plus a couple of dollars. Why? Because if you want to hire someone later to help you write, then you’ll have to factor them in anyway. As well, you should always value your time at some rate. It’s more motivating.

Thus, to calculate a real ROI, there are a number of factors to consider, and it’s very easy to forget about all of them. But if you really intend to make money from your blogging efforts, either directly or indirectly, then you have to treat your operations like a business.