What is the true cost to start an online business?
If you have ever ventured into the online business world looking to make money online, you quickly discover that the information is never really free, right? Yeah, there are pieces of ‘free information’ out there, and I am sure most of the ideas are either re-hashed (as the industry puts it) or tweaks in existing methods.
The paid products are nice because they organize all that messy data into one package, which is hopefully useful to you in your endeavors. But this cost in product varies, and this particular article is not about the cost of the information – after all, the online business you want to start may not require you to purchase any products to get going – but rather the up-front operational cost of getting it all setup.
There is a minimum set of services that you will need to be efficient with your online business. These services include your online presence (website), marketing (email autoresponder) and branding (advertising). Each of these have their own sub-sets within them, but this article is about cost, right? So let me break down what I have learned to get things going without breaking your wallet up front!
Online Presence – Up to $120 per year:
You need to have a website. Yes, I know there are many online businesses out there that can operate without one, but honestly, websites do more work behind the scenes and can be crucial in getting more leads to your business. Within this, you have a domain name and hosting. The domain name costs can range from $1-$20 per year, but I always recommend Google Domains. They cost $12 per year (.com) and give you privacy for free in that cost.
Hosting the site is another beast all together. There are several deals out there and they can all be confusing. However, you have to take into account the actual design of your website. If you are able to design the site yourself using some type of framework like WordPress, then you can find a host that would run you anywhere from $20-$40 per year.
If you are like me, and not a good web designer, then you may want to look at hosting/design services such as Wix, Squarespace or Weebly. Those services are excellent for beginners and non-designers because they provide designs that are easy to manipulate. You can expect to pay $100 or more per year for those services. But consider the alternative: paying for someone to design your website can be costly in the long run.
Marketing – Up to $400 per year:
Now, marketing is the actual act of talking to the customers. This could be integrated with “online presence” since you have to place a lead capture system on your website (see how important the website is now?). But I broke this down because there are a lot of options out there for the actual service that gathers, holds, and communicates to the leads you capture. These services are known as Autoresponders. Of the popular (and useful) services out there, Aweber, GetResponse, MailChimp are usually the top dogs. However, when you are starting up, they can be costly if your list of leads gets large (and that is not a bad thing).
To get it going however, you can get Mailchimp for FREE up to 2,000 leads. They do limit you to only sending out 12,000 email per month (only 6 times) which may not be bad depending on the online business you are in.
A smaller, less known autoresponder that you can also use at first is Mailerlite. They give you unlimited email for up to 1,000 leads. But let’s be optimistic: you didn’t start your online business to only have 1-2,000 leads, right? Nope, you want a larger pool to market to. Not to mention, this article is about the true cost of starting it. So, for a good autoresponder, with the capacity to email thousands of leads, you can expect to pay about $300-400 per year. Of course, as your list grows, so does this cost. Collecting the email leads to market to is VITAL to your online business, so do not take this choice lightly.
Branding – Up to $ 600 per year:
Branding is the toughest part of your online business. Just because you have the online presence and marketing setup doesn’t mean that people will come flocking to your product or service. You have to remember, that today, people are exposed to over 2,000 ads per day! Branding will hopefully cut your online business through all the clutter. When starting out, I highly recommend to look at Facebook Ads. Yes, you can promote your brand on Facebook by posting for free, but let’s think about this for a minute: you want to REACH potential leads, and you probably do not want to just rely on your own list of friends, right? When you are starting out, I recommend about $50 per month on Facebook Ads. But I will give you this one tip: Do not use “boost post” button when you start. Make the ad in the Facebook manager.
Overall, when starting your online business, you can expect the upfront costs to be AT LEAST $1,200 per year – which translates to $100 per month. That’s not too bad when you think about it when compared to starting other types of businesses.
I will post in more detail about each of these topics and get into the nuts and bolts of each. Be sure to subscribe so I can let you know when I put out new info!!