What Kind of Money Do I Need to Start an Online Business?

Starting an online business can be scary for a lot of reasons, but cost is definitely a big worry for new entrepreneurs.

The good news is, starting an online business requires less cash than you may think. Exactly what you'll need varies from business to business, but let's cover the tools and minimum investment needed to create an online presence.

Setting Up Your Website: $10-$640

First off, you'll need somewhere for your business to live. You'll start by registering your domain. There are so many different sites you can use for this, and the cost can range from as little as $1.99 to thousands of dollars if you're trying to acquire a really desirable domain. Most, however, will run you about $10-$15 a year. Read more on how to choose your business name and what to do if someone's already taken the domain you want, then get started by registering your domain today!

Once you have your domain, you'll also need hosting and design to get your website up and running. Because custom design work can be expensive (often costing around $50-$1200 a year for hosting and thousands of dollars for the design), many new entrepreneurs will opt for a website building platform like Squarespace or Wix, which offer hosting as well as templates and easy-to-use features to design your own site without coding. Depending on the functionalities you need, those can range from free to $625 a year, and you can compare different options here.

Legal Setup: $0-$500

You'll also want to get your legal ducks in a row before starting. There are three typical business structures that small online businesses opt for.

If you're running a business on your own, a sole proprietorship is the easiest choice (and cheapest as it's free!)—but this option comes with no protection from liability for business debts or obligations. Another option many business owners chose is operating as an LLC (Limited Liability Corporation), which ensures you are covered in most cases from liability of the business' debt or obligations. The cost of filing for an LLC varies from state to state and ranges from $50-$500, with most landing around $100. Your last option is filing as a corporation, which is best for business' that may have outside investors as part of the structure. The cost of a corporation also ranges anywhere from $50-$300.

Starter Marketing: $0-$2,000+

Marketing could be the number one growth catalyst for your online business, but it can also quickly become the number one expense, so it's important to understand where to invest your money is. A few good options for getting started include:

  • Social Media: Businesses of all sizes have seen exponential growth thanks to social media, and the good news is these platforms can be completely free if you have time to manage them yourself. If you want to boost your exposure, consider looking for a part-time social media manager on a site like Upwork or experimenting with a little money each month in social advertising. Here's a primer on what you need to know about each platform.
  • Google AdWordsAdvertising on search engines is a great way to connect with customers who are literally searching for what you do, but it can get expensive. It depends on your industry, but cost-per-click cost on your ad can vary from cents to over $50. Do your research to figure out what sort of spend you should expect—if you have the budget for it, it can be powerful for early growth. Learn more about creating an AdWords budget here.
  • Content Marketing: Often a longer-term investment, relevant blog posts on topics your customers might be interested in can help you show up in search engines without paying for it, and also give you content to share on your social media. You can write these yourself for free, or find freelancers to write for you for about $50-$500 per post.

Starting a new business can cost you, but there are also ways to get going without breaking the bank. Register your domain and get started on the business of your dreams today!

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Friday, June 8, 2018