Welcome to day 3 of the Blog Profitability Series. In the first post we officially kicked the series off and in day 2 I covered what tools and data you need to go out and pull together as the basis for your analysis. Today in day 3, we are going to determine our break even number that will tell us how much each blog or site costs us on a monthly basis. This will be the number, on a monthly basis, that each blog or site need to earn to break even.

I am going to use the spreadsheet app from Google Docs to do my analysis. As discussed in Day 2, you can use any spreadsheet program but Google Docs is free and easy to do. With that in mind, lets get to it.

Break Even Analysis

The first thing that needs to be done is to figure out what your monthly expenses are. You need to determine what costs you have on a monthly basis. The tricky thing about this is you may have costs that are paid yearly, such as domain names. We can use our spreadsheet to
help with this.

First thing to do is to set up the column and row headings for the break even analysis. To make this easy for you, I have attached a link to the file that I use to complete my own break even analysis. This spreadsheet may need to be altered depending on your expenses. The
important thing is that you determine what each site or blog costs you on a monthly basis.

To get the file for your own analysis, click here (you will need a Google account to view it).

Once you have completed this step, you will know how much money you need to earn on each of your sites to break even. This will be crucial for our next step when we start to look at revenues and actual blog profitability. Stay tuned for day 4.