Budgeting Simplified: How Much Does it Really Cost To Start an Online Business?

how much does it cost to start an online business

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What does it cost to start an online business? Learn how to create a successful budget to get started.

The cost to start an online business is surprising low! You think you might be able to make money blogging, or teaching online, or selling products that dropship. You can! You just need to be aware of potential costs and plan accordingly. 

Entrepreneurs such as you are increasingly turning to business concepts that can be realized on a virtual platform, whether moving traditional service or sales businesses online or creating the types of businesses that can only be found online such as blogging and affiliate marketing. 

Virtual vs Storefront Business Expenses

Creating or moving your business online when feasible is a no-brainer. Renting an office or retail store is obviously far more expensive than creating a website because maintaining a physical space has other costs besides rent or mortgage such as utilities, salaries of staff, liability insurance, workers’ compensation insurance, cleaning company, accounting services, and loss from theft, among others. The cost to start an online business can clearly be much less.

A virtual business can be run from anywhere with reliable high-speed internet and a late model MacBook or PC. These two things will be your first expenditures, and don’t skimp – you will thank yourself when things are up and running and going smoothly, with no interruptions in service and with everything technical you want to accomplish at your fingertips.

Keep in mind that a business with a storefront or office must have computers and the internet too!

So you see that even traditional product sales and services, such as marketing, accounting, or legal services, can save in business costs by moving operations online. This, in addition to the personal safety concerns arising due to the COVID-19 pandemic, is why doing business virtually is hot right now.

CNBC recently even reported that 70% of people work from home virtually at least once per week!

The Best Computer for Your Online Business

Do not stress over your choice of computer. The best computer for your online business will be the one you are comfortable using, that you can afford, and that can help you effectively and efficiently create the virtual content you need for your website and blog. It very well may be the one you have already! Undoubtedly, as your business grows you will discover what functions your computer is missing, if any, and eventually upgrade. 

Using the computer you already have is the most cost-effective way to get your business started. But if you feel you need something newer or more powerful and you have the funds, you can purchase a new computer. Let’s narrow it down from there.

Should I get a laptop or desktop computer for my virtual business?

Desktop computers are and will likely always be more powerful and easier to upgrade than even the best laptop. Desktops are also less expensive than laptops. If your concern is affordability, speed, reliability, ease of upgrade, and longevity, a desktop is for you. 

As of this writing (July 2020), some recommended desktops, priced lowest to highest, include:

  • Dell OptiPlex 3050 Micro ($500-700)
  • HP Elite Slice for Meeting Rooms ($1200-1800)
  • Apple iMac 27-inch ($1800)
  • Apple iMac Pro ($4000-$5000)
  • Microsoft Surface Studio ($3000-$6000)

Laptops allow you to work from just about anywhere. If your primary concern is being mobile, some recommended laptops, priced lowest to highest, include:

  • Google Pixelbook Go ($650)
  • Microsoft Surface Book 2 13.5-inch ($900-1500)
  • Huawei MateBook X Pro ($1000-1600) 
  • Lenovo ThinkPad X1 Carbon (6th Gen) ($1100-1300)
  • Dell XPS 15 (2020) ($1300)
  • MacBook Pro 16-inch ($2100-2400)

What computer accessories do I need for my virtual business?

You will need a printer. While the nature of a virtual business will render most documents and information electronically, you will invariably need to print something out occasionally. Consider purchasing an all-in-one printer that has copying, scanning, and faxing functions as well as printing.

You probably already have a smartphone. This is a handy device for quickly answering emails and for making videos, along with video-editing software on your computer.

If you intend to “vlog” you will likely need a tripod for your smartphone and a lavalier microphone (“lav mic”), which is a small clip-on mic that may be either wired or wireless. Lav mics are especially convenient for videoing interviews.

Procuring Reliable High-Speed Internet for Your Online Business

Using Traditional Cable or DSL Internet

Cable internet is likely the most reliable, but also tends to be the most expensive. Be sure to shop all of your local providers for the best deal. Often cable and DSL companies will bundle landline, internet, and cable TV services.

A bonus: if you subscribe to cable or DSL internet at home, you probably have free access to all of your provider’s Wi-Fi hotspots when you travel, with your password. Your provider will have a list of the locations of their Wi-Fi hotspots.

Using Wi-Fi Hotspots

The customers of major cable and internet providers Xfinity, Spectrum, Cox, and Optimum can access all of these providers’ Wi-Fi hotspots for free. This gives customers access to over 500,000 hotspots in a network called CableWi-Fi. You can find the location of hotspots in this network at CableWi-Fi.com.

If you are not a home cable subscriber, you can access hotspots at many coffee shops, libraries, universities, and bookstores. Municipalities often have free outdoor public hotspots. While these hotspots are free to you, be forewarned that they may not be as secure as hotspots accessed via password.

If you are in a pinch you can create a personal hotspot with your smartphone.  You can also use your smartphone as a modem, by tethering it to your laptop. Either of these will quickly drain your phone battery, however.

Using a Mobile Broadband Service

If you have a laptop, you can have a card installed or purchase a “laptop stick” that allows you to access a mobile broadband service. These services are subscription-only, and can only be used on one device at a time.

Using Satellite Internet

In more remote areas where cable and DSL are not offered, and there are no hotspots, those requiring internet access can turn to satellite internet.  Satellite internet providers beam the internet to your home from satellites in orbit around the earth. Unfortunately, this service is pricey and can be interrupted by bad weather.

How Much You Should Spend on Your Business Website

What do you want your website to accomplish for you? Is it a platform for affiliate marketing? Is it a business card for your Skype or Zoom teaching, with a blog? Is it meant to host products for sale, with a shopping cart?

The first thing a website should do is clearly set forth the nature of your business for the viewer. The next thing it should do is be findable when people search for the thing you offer. Then, it should be credible, persuasive, and easy to use so that the viewer is converted to a client or customer.

If you have no experience in website design or Search Engine Optimization (SEO), you should consider consulting with a professional firm. Costs of employing such a firm to design your website and maximize content for SEO vary from $750 to create a simple website with a small monthly SEO fee, to thousands.

Fortunately, it costs nothing to consult with a web design and SEO firm so shop around for a firm you’d be comfortable working with, that provides services you need and can afford.

What if I have no money for website design or SEO?

In the alternative to hiring professional web design, marketing, and SEO firm, you can create your own website using one of the many available free website designs and hosting services.  It is a simple matter to get up and running using the templates offered by Wix, Squarespace, GoDaddy, Freewebstore, or any of the many available services. 

To maximize the content of your website for SEO, you should consult the free articles on this site, and you might also search Youtube for free videos on SEO. You will find many credible and informative tutorials by Ahrefs, Moz, and Hubspot, among others. If you have more time than money, you can learn a bit about SEO and get your site to rank for the terms searchers use when they are looking for your type of service or product.

The Costs of Marketing Your Virtual Business

Social Media Marketing

Employing Facebook, Instagram, and Twitter to promote your business to your network is a must these days. You can do this free of charge, the only cost being your sweat equity. In the alternative, you can employ a social media manager to do it for you. Many SEO/web design firms have a social media manager on staff to help their clients.

No idea where to get started with social media marketing? Sign up for my free social media marketing crash course here!

Google or Facebook Ads

Investing in Google and Facebook ads requires a bit of SEO knowledge to figure out your target audience. There are plenty of free tutorials online, if you have more time than money, or your webs design and SEO firm can help you.

Your Online Business Budget Summary

Besides a good idea, here are the things you’ll need to start and run your virtual business:

  • Computer
  • Computer Accessories
  • High-Speed Internet
  • Domain and Website
  • Marketing

You can see that the cost to start an online business is very appealing for so many reasons.

In short, if you own a computer and already have high-speed internet you can simply jump in and get started by purchasing a domain name and then creating a free website. If you have some ready funds, the next thing you might invest in is the help of web design, marketing, and SEO firm to give you a better chance of being found online and of converting those viewers to customers.

Best of luck with your online business!

Check out some other posts on starting your own online business here:

18 Legitimate Ways to Make Money and Work From Home in 2020

Create a Powerful Action Plan for Your Online Business

Savvy Ways to Use Facebook Groups for Marketing Your Blog Business

About the Author

Budgeting Simplified: How Much Does it Really Cost To Start an Online Business?

Veronica Baxter is a legal assistant and blogger living and working in the great city of Philadelphia. She frequently works with Philadelphia bankruptcy attorney David M. Offen.

Budgeting Simplified: How Much Does it Really Cost To Start an Online Business?
Budgeting Simplified: How Much Does it Really Cost To Start an Online Business?

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64 thoughts on “Budgeting Simplified: How Much Does it Really Cost To Start an Online Business?”

  1. Absolutely right. The good thing about online business is that you can start with what you have and minimum investment, and later start upgrading your accessories, pc, camera, etc. So it’s amazing what can be done with a few dollars from home. Loved the article!

  2. Very helpful and informative post about the costs of starting an online business!

    I’ve been kicking around the idea of hiring a VA for SEO. It’s hard to decide what’s more important, time or money.

    1. Thanks, Deanna! I really found it hard at first to outsource but I realised that I am better off handing off the things that I am not so good at or don’t like (like SEO) and working on money-making activities. Thanks for reading 🙂

    1. Absolutely, Holly. I think people think because it’s online, there is no real cost. But I’ve always been a believer that you must invest to be successful no matter what the business model is. THanks for reading!

  3. The upside to a lot of this is the tax write off for the following year. Balance that with not spending TOO much before seeing a way to pay for it! LOL! That’s the goal!!!

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