This is going to be one of the more complex chapters of the book so put on your math hat. I’d definitely say this is one of the most important topics most business owners don’t know as well.
Until you get your business down to a science and know the math, it’ll be very hard to predictably grow or grow at all. Whenever we speak to most doctors they think that their job is to do the doctor part and the business guy is supposed to work the magical business part.
Wrong! This is one of the worst ways to run your practice. I’m not saying you can’t hire a business guy or a marketer. What I am saying is you better have at least the basic knowledge because if you don’t keep track of your books for example your accountant might as well take all your money.
How Much Time and Money Should Be Spent on Growth?
The first thing I’m gonna say here is that you should review your marketing budget quarterly as well as the return on the investment you got. I’ll go over how much time and money should be spent on growth soon.
Everybody knows that you can’t succeed overnight and most good marketing campaigns take at least 6 to 9 months to succeed, especially if you’re starting from scratch. However, make sure to go over your processes and systems of how your team: writes, build links and spruces up your website at least quarterly as well as the costs associated with them. They can take even longer. However, reviewing your practices in your budget is key for every business owner.
So do me a favor and set a date right now where you will go over your marketing costs! Look at how much return on investment you’ve made today and try to improve it by just a little bit! Since we’re focused on SEO in this book we’re going to go over your link costs.
One of my favorite books on business growth is Traction by Gabriel Weinberg (great serial entrepreneur) and he says you should spend 50% of your time on growth as a cofounder of an organization.
I know business owners who spend as few as 20% of their working hours on promotion, however in my experience that should be the minimum time spent and only if you want to rapidly grow your practice.
In terms of marketing costs to quote “The U.S. Small Business Administration recommends spending 7 to 8 percent of your gross revenue for marketing and advertising if you’re doing less than $5 million a year in sales and your net profit margin – after all expenses – it’s in the 10 percent to 12 percent range.”
For an average SEO campaign, we charge a minimum of $3000. We have proven results in our niche and the process down to a science. The reason I say “minimum” is because sometimes we charge more depending on the campaign.
The average small business SEO campaign can be around $1500. However, I’d say it’s always better to spend extra on marketing and insure the campaign can succeed than to put in less work on a riskier and slower improving campaign.
So what should you do now if you plan to do SEO yourself? Simple, divide $3000 by however much you pay yourself hourly as base rate, review quarterly based on expectations and adjust.
Let’s say you pay yourself $100 an hour then 3000/100 = 30 hours a month of SEO education and implementation to start minimum.
During this time you’ll be building links, writing content and fixing your website depending on what’s needed that week.
Why You Should Calculate SEO Costs:
Lets go over how to calculate your backlink costs, something most business owners don’t even think about.
Keep in mind that this is
- Going to cost you money
- Show you where you can save money
- Save you something money can’t: TIME ?.
How to Calculate the Cost of Your SEO Campaign
The most basic way to calculate your SEO costs is to time your activities and add any fees. All you need is a timer in hand to get to work! There are other costs, such as paying an editor or paying for an image you may want in a piece of content (I don’t recommend wasting your budget on images). However, focus on calculating time spent the most.
Your guest post outreach process for example, costs something. The question is, what are you getting in return and how can you leverage it?
How to Calculate Link Value?
So as you build a backlink on a site, how do you figure out whether it’s a good link? Well generally it depends on the site, so what makes 1 website better than another?
A simple rule is if you or your friends have heard of a popular website in general or in your niche then it’s a good backlink.
Example: Everyone knows Forbes is a huge website and you can bet getting a backlink from them even though its general would be a great link. Similarly, Red Cross is a huge organization and their website also probably gets a lot of traffic so doing a guest blog post for them would be fantastic as a link source.
The above example shows how you can approximate link value without using any online tools.
But let’s get technical now.
3 Basic Factors to Calculate Link Value:
Traffic Amount From the Site Giving You the Link
How much traffic does the target website get? You can get that number by using a lot of paid tools online. However, here’s a great free one:
Red Cross as you can see below gets approximately 1.3 million visitors monthly:
How Niche-Appropriate is the Target Site
As said before if the target website is Medium.com, then you’re getting a backlink from a very generic website. If you’re in the healthcare space a Redcross.com backlink would serve much better.
How Easy is it For People to Find the Link on the Site?
Is the link on the homepage of the site? Do they try to hide it in an article? The more accessible or ‘visible’ a link is, the more traffic you should get from it and the more valuable Google will deem it.
⚡ The closer a link is to the home page the more valuable Google considers it.
Nofollow Links vs Follow (Dofollow) Links
So you got a backlink!? That’s awesome! Keep getting one backlink everyday. This is a bit more advanced, but you can make sure its a follow link by checking the code. (I’ll show you below).
Google has given websites the ability to take some value away from their links (nofollow links) and you can use the Chrome browser to quickly check.
This is very useful if you’d like to get a link back from a site, but don’t know what kind of link it is.
You can right click, then click inspect element and click on the link the site gives you.
Example here’s backlink Logic Inbound got from Shopify:
Boo! No follow 🙁
As you can see above by right clicking, clicking inspect element and then clicking on the link from my chrome browser the code for the link is:
<a rel=”nofollow noopener noreferrer” target=”_blank” href = “http://www.logicinbound.com/” >Logic Inbound</a>
Here’s a dofollow link, one that Google looks upon favorably:
<a href=”https://logicinbound.com” rel=”follow”>logicinbound</a>
These are the basics of calculating ROI of course there’s always more advanced things you can study especially as you pay for tools.