Budgeting for "Good" Costs

Posted by Peter Berger Mar 20, 2009

It's that time of year again: budgeting season at Suite101. While this tends to be a painful time to some degree (because it leaves me a little less time for other exciting projects underway, such as planning our next expansion step into Europe later this year!), it’s also a rewarding time, allowing me to reflect on the successful past twelve months.

And there are always interesting little nuggets in the flow of numbers such as the idea of "good” costs. Yes, good costs exist, even in a business, even in challenging times. These are costs that measure our success more reliably than traffic or even revenue. I keep mentioning to our financial team that we are actually in the business of increasing our writer payouts: the continuous and ever increasing stream of royalty payments that we pay our writers each month. In my opinion, this is a perfect example of a “good” cost.

On that measure we have been quite successful, tripling these payments (or “costs”) in the year. Over the past few months our best writers continue to make over $2,000 each, month after month. What continues to amaze people is that these writers would have made that much even if they had taken the past few months off: most of the royalties come from popular articles they wrote awhile ago. Try that feat in your current job!

I'll head back to my budget spreadsheets and will look forward to our first writers who can not only quit their day job to write full time, but who can opt to do so on Suite101 royalties alone.