Are you aware of the business start up costs and ongoing costs that you need to pay when starting up your own online business from home?
There are lots of benefits to start working from home over the web than having an offline business.
For instance, you do not have to pay rent for a place of business in the middle of the city, no warehouse costs, no staff, no postage and packaging, no commuting.
You decide your own working hours and in some cases you don´t even need your own car.
There are business start up costs for running an online business.Here below is more information of what kind of costs you need to pay and also useful tips for other things you might need.
1.Computer with high speed Internet access
You will naturally need a computer with high speed Internet access.I personally use a Windows 7 desktop PC and a 21″ flat screen monitor.Prices of computers have come down and you can get a really good PC with 6 Giga bytes of memory and a 24″ flat screen monitor for about $850.All you need is a basic good quality working computer.I recommend you invest in good quality equipment especially when you can get a tax write off.You need also high speed Internet access.
2.Ongoing business costs
You will need your own “home on the web” where people can learn more about your products and services.Setting up your own WordPress blog would be the best way to go.To get started you will need the following:
- A Domain name: You will need your own domain name, preferably a .com domain name that is short and easy to remember.Visit a domain name registrar like GoDaddy.com to get your domain name for $15 per year.
- A hosting account: This is where all your WordPress blog files will be stored.There are many companies that offer hosting, you will need to choose a hosting company that has a very low “down time”.With “down time” I refer to the time when your blog is offline and unavailable.I host all my blogs at Hostgator since 2010 and can sincerely recommend their services.I pay only $8 per month and can host up to 50 blogs.Visit Hostgator.com to learn more.
- Auto responder: You need to create profitable customer relationships for your online business.When someone visits your blog they might never come back.There fore you need to make sure you capture their name and email address when they arrive so you can keep building the relationship.The only way you can do that is by using an auto responder service like AWeber.com.You use the auto responder to send them useful and helpful information over time.Your auto responder is also a powerful marketing tool.Many online marketers earn a very nice income by recommending high quality products to their subscribers.Here is more information about email marketing.
- Firewall and Antivirus software: You will need to protect your computer and your important files when you are surfing the web.There are a lot of threats out there.Download and install a free firewall and antivirus software like ZoneAlarm.com or Comodo.com. If you are looking for a professional solution, choose Norton Internet Security which costs around $50 per year.If you don´t want to install a third party software, then at least make sure you have the Windows firewall and automatic updates enabled.
- Word processing software:When you buy a new Windows computer you will have the option to activate Microsoft Office by purchasing an activation key.The activation key is quite expensive but you can save money by installing Open Office instead.Most people use MS Office, but you can save your Open Office documents in Microsoft Office format like .doc and .xml.
- Password management software:Installing a password management software on your computer is not mandatory, you can cope without it but it is A LOT easier to work when you have one.I know from experience that there will be over 100 different passwords you need to manage, everything from your email account to Facebook and Twitter accounts.It is a security risk to have the same password on all accounts so you would need to create a Word file or Notepad text file to manage all your passwords.Another option is to install a password management software such as Roboform ($9.95 one time fee.Comes with a 30 day satisfaction guarantee.)
- Keyword Analysis Tool:This is not mandatory, but will definitely make your life a lot easier and earn you more money.Keyword research is something that you will need to do in order to find profitable keyword phrases that people actually search for on Google and other search engines.You cannot simply write articles on your blog and expect people to find you.The competition is really hard these days and doing proper keyword research will allow you to write the kind of content people are interested in.Google Adwords Keyword Tool is a free option you can use, online marketers often use a tool called Market Samurai which I also use.Download your free copy now!
- Outsourcing:Outsourcing tasks is also one of the business start up costs you need to take into account.When you are running an online business there is so much you need to do.Content writing, writing reviews, video production, social media and data entry are often outsourced.Finding good employees is difficult.There are websites like for instance eLance.com where you can find freelancers.
- Backup:Invest in a USB hard drive where you can save all your important files.Your computer hard drive can crash and you can lose all your files.Make sure to backup your blog files regularly as well.
- Choose a good email account:Sign up for a GMail.com account and use a password that is easy to remember for you but impossible for someone else to guess.Do not share this email address on any forums or email lists or you will start getting lots of spam email.This is your main business email address, choose a “throw away” email address for forums and email lists.
3.Marketing
Marketing your online business takes either a lot of time or money.People who are just starting out work 15 hour days in order to get the ball rolling. It is not wise to invest a lot of money on advertising before you see that it actually works.
Those who are not creating their own products or services often join affiliate programs that provide the members with ready made banners, emails to send to their lists, tips, strategies and so on.The problem is that when hundreds of people are marketing the same things it will become difficult to stand out.You need to be unique in some way.
We have a lot to learn from big well known companies.Big companies have naturally more resources than a small business owner, but the principles are the same.Here is a great video that shares the best marketing strategies big companies use.
{ 12 comments… read them below or add one }
It certainly takes time, focus and energy to start up an internet home based business.
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Email just this post over to my dad who believes you have to have an expensive office and staff to run a business!
We’ll see if he comes in here and dare to leave a comment. Hehe. Keep up the good work! Have a good day!
People seem to think I pay a huge overhead. So far from the truth. Just do your research and then consider the startup over commissions.
@Tommy, you’re right. There is this old school way of thinking about business. To some people it has to have an expensive office, exec. chair and a flat screen (usually turned off most of the time) in the reception area. What they fail to see though is that these cost often become the last nail to a business’ coffin. Especially these days when sales are not what they used to be.
Tom, good article.
One thing you forgot to mention, it ‘costs’ time, energy and lots of patience as well. Just because it is based at home using the internet, it doesn’t mean it is easy to achieve success.
When I first started blogging, my debt blog was on blogspot. I didn’t even own a domain name and soon it hit the first page of Google. Advertisers were emailing me to send me free stuff to blog about, pay me for ad space and to write reviews. I was earning more than I was at my full time job. Best of all, there was no overhead.
It is possible to start a business for free…
It is possible to start a business for free, but you can be much more profitable and successful by putting some money into your business. Remember you have to spend money to make money. I also think that Hostgator is the best place for webhosting and I have been using them for years and I have had no problems with them. Great post on the cost of an internet business and keep up the good work.
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Having a computer with an internet connection,Choosing a business online to venture that have a joining fee and with tools that is included is the best way to start a business today online.Somewhat a turn key business is the best.You got to spend a little to accumulate the alot..
I’ve always thought that doing SEM for other small businesses is a great internet business. Adwords is complicated and more of a hassle than most smalled business want to deal with. You could do this for local plumbers, roofers, etc., make a cut of the marketing budget and deliver them a better ROI than they are getting offline.
For Internet based home business main investment is your time investment which really plays an important factor. On-going costs such as domain cost, internet connection are minor which one can recover using Adsense on thiers website.
That’s a pretty good layout which is highly related with modern age. Nowadays online business becoming popular day by day, therefore whatever issue you shared here about this subject seems to me outstanding. Thanks mate.
That’s good, that’s really good to know about Internet Based Home Business Start-Up Costs. I’m going to start internet based home business and that’s why this concept view seems to me pretty outstanding. Thanks dude.
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