A Webmaster’s Balance Sheet

Written On Day: 18

If you are a webmaster you probably do not have a balance sheet. You do not need one. What would you put on it? What would you put as your assets and liabilities?

Of course it is possible to start being a webmaster with absolutely no assets. OK, actually you do need one asset. A public library card. Go the library, use one of the computers and sign up for a free online blog (like Blogger). Everyday you go to the library and write your blog. Completely free and no big assets.

Assets

I am sure that there are a few blogs out there created from a free access computer at the library, but most web masters use their own computer, at their own desk, and on their own chair. There you go – three assets right there. Computer, table, chair.

Next you probably do not want to use a free online hosting service. They look unprofessional and your domain name will be tom.freehosting.com. So you register a domain name for 1 year. And because you are not sure you really want to be a webmaster, you sign up for a six month hosting service. There you go again – more assets. You have prepaid a years worth for a domain name and six months for a hosting service. These are assets that you now own.

Liabilities

Now for the liabilities. For a month straight you slave away long into the night punching away at your keyboard spewing out Hemingway quality content. Nobody is paying you. You are doing it for free. But it is still work and you expect to be paid back one day. It is like you are giving your website a loan. One day when the website is making money it will have to pay you back. This is a liability to the website as wages owed to you. After a few months the website will start making lots of money. As soon as it does it will have to pay its debts. Namely the one to you. Your salary.

Equity

You own the website.

After it has paid you and if there is still some money left over that will be your equity. Equity=assets-liabilities. The amount the website is worth to you. If you could sell all the assets and pay off all the liabilities the amount left over would go into your pocket.

Most businesses when they start the equity is not a pretty sight. This is especially the case for all webmasters. You put a little bit of money into the required tools (computer, desk, chair) and then a lot of time into building the website. Once it is built you still have nothing. You have spent money and you have spent time. But you still have nothing. Just a whole bunch of megabytes sitting on some server’s hard drive.

Only after the visitors start coming and click on ads and buy your products do you recoup your initial investment. Only then does your negative equity begin to slowly turn around and begin its climb into the positives.

As I write this my equity is still deep in the negative.

  1. January 20th, 2009 at 01:40 | #1

    Fascinating experiment you have here. I just started a site as well, and I’m looking forward to following along with your progress.

    I’ve seen so many “this is how I built a 100k visitor website” articles – but I can see this real time experiment being much more informative.

    Patrick
    PS Perhaps this might be useful for your traffic generating strategy: Follow the Herd

  2. December 20th, 2009 at 05:41 | #2

    Definitely still at the Hemingway stage, but I like what you’re saying about my blog paying me!

    I started mine to educate myself and track my finances so even if it doesn’t monetize it’ll still be a gain.

  3. September 15th, 2010 at 16:20 | #3

    The way you have said in your article, it seems that it is extremely easy to make blog. Yes it is easy to create one, but to maintain it is the actual job. It becomes difficult some times.

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