Welcome to day 4 of the blog profitability series at The Internet Cash Flow Guy. Last time we completed a break even analysis and now have a good idea of how much we need to earn every month on each of our sites to not be out any money. The next step is to build the income and expense sheet so we can see how profitable each site is.

Profitability is a simple concept. Many people think that financial analysis on their blogs is a black box that requires complex spreadsheets with weird calculations that only an astrophysicist could understand. That is not true - it is simply based on the following formula:

Revenue - Expenses = Profitability

With that understanding, we can build a spreadsheet that does the calculation for us for each site we have. To help you with this process, once again I have attached a sample Google spreadsheet that you can use to build your own sheet. Click here to get the sheet.

You will see that the bottom line number is actually how much money you are taking home after you subtract your expenses from your revenue. Do you have any sites that are losing money on a monthly basis? Which sites are the most profitable? Should you cut the money losing blogs and focus your attention on the one that is giving you the best return? These are all questions that should be answered if you are serious about making money online.

The next step in the process is to take the analysis one step further to build a spreadsheet that will provide us with a yearly view of profitability by rolling up the monthly results. This will be the topic of the the day, day 5, of the blog profitability series.
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