How much money do you need to start an online business
While online business start up costs are nothing compared to the
brick-and-mortar businesses, you still need to make some minimum
investment to launch a web business.
When you hear people say, "start a business on a shoe-string
budget", remember this: a shoestring also costs something. And
what for some people "small investment" means $1,000, for others
it might mean $50 or less.
So, how much exactly do you need to have available to start an
online company? Let's review the costs.
*Please, note: I am assuming that you already have a computer
and the Internet access - otherwise, you wouldn't be reading
this article :-) I am also assuming that you are starting a
basic online business - not an e-commerce web site with advanced
shopping cart system selling hundreds of items, which would
require a bigger investment.
1. Domain Name
If you are serious about your business, you want to choose and
register a domain name - www.yourdomain.com. You can purchase it
for as low as $16.00 a year. Some web sites offer it for less,
you just need to do some searching. Give a lot of thought to
your domain name - after all, it will represent your company. I
kept thinking about my domain for the longest time. I wanted
something unique, memorable and with humor. That's how my
HelpingFoot.com was born.
2. Web Site Hosting
Hosting is an absolutely necessary component to any web
business. Your web site has to reside on a web server, and
hosting companies provide you with space on their servers for
which you have to pay for. Of course you can choose a free
hosting company at first (such as Geocities.com and
Angelfire.com) but for reliability try to switch to a paid one.
I use Pair.com and my hosting fee is just $5.95 a month. I also
had to pay a one-time $28.00 set up fee.
3. Web Site Design
Now, the biggest stone in the web business set up - web design.
You can choose to do it yourself by picking up a book for
beginners, going through the free online tutorials, or
purchasingquality training materials to learn how to set up your
own web site. Or you can hire a professional designer. Because
web design is a relatively simple task for any computer-literate
person, just about anyone can call themselves a web designer
today. That's why fees vary greatly from $10 to $200 an hour for
web design. You can probably hire a college student to do an
entire web site for you for $200.
That's it for start up costs.
Things like promotion, Search Engine submission and,
copy-writing you can do yourself at first, via free methods and
manual work. After you start making money with your web site,
you will be able to afford automating and outsourcing many of
these tasks.
Remember, you have to make a choice: you are either going to
invest money or time into whatever you want to do. At first,
time was the ONLY thing I could afford. But then I decided to
outsource a few things (some people have more copy-writing
talent than I do ;-) and invest a few bucks into my business.
The key is to invest it wisely.
Pay for something only when you are absolutely sure it will
bring results. Otherwise, spend more time researching and
observing other Internet marketers and their strategies.
As you start making money with your online business, your
purchasing power will increase. A year ago spending a $150 on an
autoresponder services sounded crazy to me and impossible to
afford. Now I look at it as a necessary cost of running a
business and saving time following up with my customers.
Let's summarize your online business start-up costs for your
first year of operation. If you start making money the first
year, your expenses might go up since you will probably be more
willing to invest:
- Domain Name: $16.00 - Web Hosting: $6.00 x 12 months + $28.00
set up fee = $100.00 - Web Design: $50 (training materials) or
$200 (outsource) - Totals: $166 (do-it-yourself) or about $300
(outsource)
As you can see, you still need to spend a little money to get
started. You can spend more or less money, depending on how much
time you are willing to put into your business.
If $166.00 seems like a lot to you to spend in 12 months, then
you might want to try a completely free web site offered by
Geocities or Angelfire, as I mentioned before. Your business
won't be as effective because there will be no company domain
name or a well-designed web site, but you will at least get your
feet off the ground and get a feeling of what it's like to run a
web business.