Entrepreneurs love talking about money. If you've hung out in any entrepreneur-type community for any amount of time, you hear numbers get thrown around in the hundreds-of-thousands of dollars (low end) to millions of dollars (high end) range. Any brick an mortar business is going to require that you take a loan out from the bank, and if you are in a tech startup, you're probably going to need to look into Angel Investing.
But what about an online business? Are the rules the same?
Actually, you can start a business on the internet for much, much cheaper than you can imagine. You could probably do it for free if you really wanted to, but there are many disadvantage to it; so this article is not for the-internet-should-be-free-for-everyone-or-I-don't-want-it crowd. I run a small software business and the #1 request I get is emails asking how to get the software for free.
Below is a list of essential costs you can expect to pay. There are of course lots of opportunities to buy more stuff, but from what I've seen and in my own personal experience, new business owners rarely know how to use these tools effectively, and therefore they are not used to their full potential.
1) Domain Name: $10 per year
You can actually get them cheaper if you get something on sale. There are of course expensive domain names that people are camping on and trying to sell for tens of thousand of dollars, but do no buy these. How much do you think twitter.com, facebook.com, or google.com was bought for? Probably around $10.
Mynameistom.com is currently going for $4500. Mynameisnttom.com costs $10. Get creative.
2) Hosting: $6 per month
Now that you have a domain name, you need to store the files for your website somewhere. This is where the host comes in. Some places offer packages for about $3 per month, but these are introductory promotions that expire after one year of service. Hosting can be more expensive, especially if you get into multiple domains or private hosting, but for a starter hosting package for a basic online business site, you'll pay about $6 per month.
To start an online business, you need less than $100 to cover the costs of the first year. I'm not kidding you.
Now I needed some additional training to actually learn how to build a website, get traffic to the website, and actually make money from it. I paid an additional $350 dollars for this training at an online business community, and ended up buying some extra domains, a hosting upgrade, and outsourcing some stuff. I kept pretty good books for my first year of running a business, and I think you might be surprised by the results.
1 year's expenses: about $600
1 year's income: about $4000
It was clearly not the next Google, but it was profitable, and it was low risk.
Other things I eventually invested in that boosted traffic and expanded how I market online include screencasting software, a keyword research tool, and a bigger budget for outsourcing. These are not necessary.
The bare essentials of reliable hosting and virtual real estate (domain name), plus some hard work on your part, writing, blogging, and finding the correct social media channels are all its going to take launch your first business on the internet.
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