How Much Money Does It Take To Start An Online Business?

How Much Money Does It Take To Start An Online Business


How do I start an online business and how much investment do I need?

Today I want to talk about how much money it costs to start an online business. This is a frequently asked question, and it was definitely one I had when I started.

There is a misconception about what it really costs to get started. Most people, including myself at one time, believe that a lot of money is needed. I understand that can be discouraging. You may be thinking, “Well, I don't have any money. How could I really start a business? "

But there is good news! While it does indeed cost money to start an online business, it costs less than you may think.

The most important question to ask yourself is: what kind of business do you want to start?

Whatever great business idea you have, you need to realize that it's going to cost you money - and for some types of businesses, it can cost a lot of money. But don't let the financial hurdle stop you from doing the groundwork, including your research to uncover potential customer pain points that your business can help address.

You don't have to start big. Start small, cheap and work towards your goal.

When I started my first online business in addition to my regular work, the idea was to start selling candy-related products and also raise awareness about health problems associated with eating too much candy. I hardly spent any money.

All I did was start a blog, which then cost $7.95 a month for web hosting, using BlueHost : (As most of you know, I'm a huge fan of BlueHost. And since I have an affiliate relationship with them, you can get your business website up and running for a lot less than it cost me to get started, starting at just $3.95 a month!)




web hosting

In fact, all my sites are hosted with them simply because they have a great support service and the servers they provide for WordPress sites are incredibly fast.

In the beginning, that was the only money I spent. Well, that and buy me coffee every day! Most of my initial investment was my time, taking notes, writing, creating informative charts and graphs that could help people, including myself, learn more about candy.

Then I added a shopping cart with WooCommerce.


YOU DON'T HAVE TO START BIG. START AT A LOW COST, AND WORK TO ACHIEVE YOUR GOAL.

 


Building your email list takes a little more money, but it's worth it for your business.


It wasn't until 2018, a year after my first small investments, that I spent a little more money on one of the best investments you can make in your business: building an email list.

The Email Service Provider (ESP) I used at the time was Mailchimp, which cost me $194 a year to get started (that's only about $16 a month).

Although my email list grew, once that happened, the cost increased aswell based on the number of subscribers I had: 26,000 subscribers cost me $181 per month. Costs aside, which are really pretty standard, Mailchimp had the features I wanted.


You can do it alone, but only for a certain amount of time. Eventually you will have to hire a team.


Around the time I started selling my products and making a living online, I still had to consider outsourcing some tasks.

Now that I look back and think maybe I could have done that sooner to help with things like finding a web host and building my website.

Then I did it all myself. That's one of the pluses to start with. You don't really have overhead.

It's all about the effort you want to put into it, the time you want to put into it and all on your own conditions. So when I started, I found my WordPress theme myself and set it up with a very simple one-click install.

I was able to set things in motion and began to develop my audience, trust and authority in line with those to whom I would deliver my products.

The most important thing I want to emphasize is that this process took time. It didn't happen overnight. If I had spent a little more money to hire a team before, I don't know if I would have been successful sooner because I created authority in my niche and trust in my audience - two things you can't buy.


Should I start advertising now?

There are indirect ways to build authority and trust by buying exposure on Facebook, through ads or other advertising platforms so that people can find you faster, but you still have to earn that trust. It should still provide value and really help people in some way.

I advise you to first build a good basis for your online business, and start making some profits. As soon as you have that you can start reinvesting money into advertisments.


AFTER SAVING THE MONEY YOU EARN AND SPEND, YOU MUST ENSURE THAT THE VALUE YOU PROVIDE IS THE CORE OF YOUR BUSINESS


Crowdfunding can be a viable solution to support your business idea financially.


If you have an idea worth pursuing, crowdfunding can be a useful way to find the money you need to get your idea off the ground. For example, you can run a Kickstarter campaign.

I've been a promoter of dozens of different projects, and many of those projects were just ideas when the campaign started. There are ways to get prepaid for your ideas. Using Kickstarter allows you to validate those ideas and start building a community at the same time, which is a great way to get a boost in the early stages of your online business, especially if you need money to get started. with what you want to create.

I know that in the world of e-commerce and physical products, there are many initial costs, which vary depending on the product.

Sometimes you have to spend a significant amount upfront to pay for a mold, as some do with a physical product with a specific shape that needs to be reproduced on a large scale.

The mold itself could cost tens of thousands of dollars. In that case, a crowdfunding campaign can be an excellent option to cover those costs.

So how much money does it really take to start an online business?


The answer to that question is really up to you, your business model and planning needs to be taken into account. When I started I didn't spend allot of money, something I remember well because I just got fired from my job and I didn't have a lot of money to spend.

For my first online business I spend no more than $1,000 per month for the first two years of that business. It wasn't until the business started to grow significantly that I started spending more money, and then I had income to fund additional expenses.

If your first idea is a physical product, you may need a little more money upfront. So it really depends on your unique situation. Regardless of your situation, there are some consistent lessons to consider in your business strategy and planning.

Checklist for starting an online business:


  • Find out what your business is about and ask yourself why you do what you do.
  • Clarify your goals.
  • Determine how much money you need to start your business.
Make projections on a spreadsheet and find out how much you can potentially get out of your idea.

It is important to consider all of this before starting. In a way, you work backwards from your end goal (to build a successful business) to before you even start. Doing this ensures that all your bases are covered so you don't get a unpleased surprise.

And, perhaps most importantly, by doing this, you'll soon realize if your business idea is something that really sticks to what you're really trying to do in your life. If not, at least you have the knowledge to make adjustments or try something else.



About the author:

Hello, my name is Ron Hoekstra and I am the founder of The Liberty OnDemand. I hope you like my content, and if you want to know more about me, please read more here or subscribe to my newsletter where I will keep you up to date with new posts and other useful content.


Thank you!

Ron.

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