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What is your plowback ratio for your online business or website?

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    What is your plowback ratio for your online business or website?

    What is your plowback ratio for your online business or website?

    The plowback ratio is the ratio of your income that you invest back into your company. That is a percentage of the income which you give up to grow your business. The difference between your standard costs and your plowback ratio is that the standard costs are the amount of cash that is required for you to run your business but the plowback ratio only takes into account money used for development. For example, hosting costs would be a standard cost but investing into SEO will be part of your plowback ratio because it is helping the development of your website or business.

    I normally invest around 20% of my profits back into my websites for its development. Normally, I invest into SEO and new features for my website every month.

    #Plowback #Reinvest Website Management
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    Webguy2024

    Webguy2024

    To grow a business it is standard to put 100% back into the business for the first couple of years. Then it is standard to use 20% of the profits for advertising and growth. If you can afford to increase this to 30% or more you can then also have a growing cash balance that can be used to purchase other business investments such as websites, equipment or anything else that will increase the business.
    8 years ago
    1969-12-31T19:00:00-0500

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    Lynne

    Lynne

    I put about 20% back in but I think I should start putting a lot more in!

    I just enjoy spending my money on my kids and taking them out. You only live once and my kids are growing up so fast!
    8 years ago
    1969-12-31T19:00:00-0500

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    Cristian

    Cristian

    Depends if I really need the income I'm getting from a website or not. Let me explain you my logic. If I have other sources of income and I don't really need to spend money from a website that just started doing well, I usually just invest 100% back into that specific website, at least for the first few months after that website started producing a nice income.
    8 years ago
    1969-12-31T19:00:00-0500

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    Corzhens

    Corzhens

    This is a good measure if your business is already earning good. But for a business that is just starting I guess it is better to focus on the gathering of prospective clients and the promotional campaign of your business so that sales or revenue will increase to the desired level. Maybe you have to do that for at least 6 months before you can say that your business is already stable.
    6 years ago
    1969-12-31T19:00:00-0500

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    Kakashi2020

    Kakashi2020

    I allot 10 percent of my sites income as additional website funding to be used on future expansion, tweaks and or expenses.
    6 years ago
    1969-12-31T19:00:00-0500

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