Article #60 How to Setup a Budget and Goals for Your Website
Once you figured out the goal of the website, its time to start planning a budget. If this is to be a website for generating the main income for the family to live on, then you must determine how much that is needed per year, per month and per day. Let us say you want to generate 1 million dollars for the year, then that is about 83,334 dollars a month and 2,778 dollars a day. Ok, to generate 2,778 dollars a day you need products to sell on your website. Let's say you just have one product and it sells for 100 dollars each. So, with your 100 dollar product, you would need to sell about 28 of the 100 dollar product a day to make your quota. (2,778/100=28 rounded up) (You can have many products and decrease the amount you have to sell to get your goal.)
Maybe 1 million is not your goal? Even if you were to make only 500,000 dollars for the year, that would be 41,667 dollars for each month and only 1,389 dollars per day. Then you would only need to make 14 of the 100 dollar product sales to make your quota per day. Well, you get the picture.
The next step is to determine how many visitors to your site you need to make these sales quotas. First a quick lesson in conversion rates. A converstion rate is the percentage of visitors to your site that "convert" or purchase an item, become a member, etc. in other words, if you have 100 visitors to your site and one person buys a product, then your website has a 1% conversion rate. Same goes if you have 3 people buy to every 100 visitors, then that would be a 3% conversion rate. A 3% or 4% conversion rate is excellent. Only a few of the top website get this, like Amazon for example. A very good website conversion is a 2% conversion, which is the average of the top websites on the World Wide Web. Most websites are at a 0% conversion and don't make any money. For right now, especially since you may be just starting out, we will go with the 1% conversion rate in our examples.
So, to find out how many visitors you need to your website to make your sales quota budget, you need a formula. Here is the simple formula: sales divided by conversion rate equals the amount of visitors you need. So to make our 1 million dollars per year we need $83,334 in sales a month divided by 0.01 conversion rate equals 8,333,400 visitors needed a month to reach your goal and budget. Calculating visitors per day would be 2,778/0.01=277,800 (rounded up). You could run a lot more scenarios and therefore create possibilities and excitement for your new business. May God Bless you and keep you always.