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Projecting Profitability

    • 1 posts
    November 5, 2011 5:53 PM EDT

    I am starting a social networking/consulting website geared to a wide demographic and will rely on selling ad space, as well as affiliate program links to turn a profit, (like the Facebook business model).

    I obviously need to calculate profitability potential to include in my business plan.  How do I do this? I would need to know things like how much a new publisher generally charges for ad space per month (given the size of the banner), and the type of affiliate programs that would be most profitable for a startup considering there will be few members on the site initially. What else do I need to know?

    What's the process for making an educated forecast regarding how many businesses I can get to buy ad space for the first 6 months, and how many members on the site will click on affiliate links, as these factors will ultimately determine the projected profitability.

    I hope I included all pertinent information needed to elicit the information I'm looking for. Please freel free to inbox me with specific questions if need be.

    Thanks to all!