Startup costs are one of the biggest frustrations for new, online business owners.
This is completely understandable. When you’re starting your businesses you may have a limited budget. You may have friends and family discouraging them from spending the money. Because they are uninformed about making money online, they’re skeptical. They’re watching you spend money and reminding you of how long you’ve been waiting for a return on that investment.
They could end up being right, unless you know exactly what you want to do and the best way to get there. You could end up spending a small fortune and have nothing to show for it.
You need to have a plan going in. It doesn’t mean you have to know exactly what you want to do yet, but keep spending to minimum before you do.
There Are Options for Starting 100% Free
It’s not completely true that you have to “spend money to make money” with online business startups. Some people say this because they have something to sell and they want you to buy it.
That said, you don’t want to be so tight with your money that you prevent yourself from growing a formidable business the right way.
When you’re first starting out, you’ll either need to spend time or money (or a little bit of both) to get things going. If you’re willing to put in a lot of sweat equity, your startup costs could be next to nothing.
Understand that you’ll eventually want to put some money on the table if you want a serious business. If you’re just playing online and thrilled when a dollar happens to come into your PayPal, then that’s fun and you can continue that. If this is going to be a real business, though, you’ll eventually have to open up your wallet.
What if you’re in a dire financial situation and you have to make this business work? Even if you don’t have a penny to your name, you’ll be happy to hear there are options for you.
Here are a few examples:
- Kindle publishing – 100% free
- Affiliate marketing on – Amazon , CJ Commission, Share-A-Sale, etc. – 100% free
- Offering your talents and services – 100% free
These items don’t need an email list or a website (although it is recommended). You could use social media and word of mouth to get you started until you can bring in some cash.
Now those may not be the exact things you planned on doing online for the long haul. If you want it bad enough, however, you’ll get started any way you can. Once you get some money coming in, you can morph that into something you do want to do.
There are no excuses for procrastinating and waiting until you have mega bucks to invest in your startup costs.
The Right Time to Take on This Kind of Commitment
Sometimes, you don’t have a choice. You get a pink slip from your boss or you end up with a medical disability. Now you’re at home wondering if those “envelope stuffing” offers in the back of a magazine are really viable (spoiler alert: they’re not).
Online businesses can work for you in a pinch – but you have to use common sense, shop smart, and work from a plan. You can’t just log on and buy everything on a whim hoping for some push-button magic moneymaker.
It doesn’t work like that.
If possible, it’s best to take some time. Educate yourself about the business you want. Try to save up a bit of investment money for startup costs before you commit to a life as an online-business owner.
You want to have some time to develop your business, and that means you need time to:
- Educate yourself about the industry
- Research who you can trust and build relationships with them
- Create products
- Provide services
- Learn the technical ins and outs of the business
- Complete any courses that you buy
- Have time to answer emails and handle customer support
This could be before you leave for work each day, on your lunch hour, or after work and on weekends. Or, it could be a full-time gig for you if you’re retired or unemployed with a savings.
Why are we talking about the time commitment? Because if you don’t have time, then it becomes a money problem. You’ll start trying to throw money at anything that can pay off quickly. This could end your business before it even gets started.
Understanding the New Business Startup Costs
How much do you need to save up? What will you be buying? Let’s go over some options for people just getting started. What will you need to pay for as an online business owner?
If you’re not educated about online marketing, then you may want to buy courses that teach you what you need to know. For example, if you want to learn how to start a blog, then you might take a free mini-course to get you started quickly. Or you could opt for something more robust, like the Elite Blog Academy, which is more step-by-step.
One of my favorite blogging communities is DTC (Dare to Conquer). They have an amazing Slack community where I can go to get all my questions answered in real time .
There’s plenty of free information online, but it’s a convenience to get content that’s organized. It will be more detailed and written by people who have experienced success in that particular area. They can speak directly to the things they’ve found that work best and those that are not so great.
Courses range from free or low-cost to those that are priced in the thousands-of-dollars range.
Beware! There are boiler rooms where sales people will call you based off of a low investment you make. They will try to pressure you into maxing out your credit cards because you won’t want to pass up on this fantastic offer. Avoid them like the plague.
I feel like I’ve taken about every course under the sun. I’m a little bit of a course junkie, but you have to be willing to constantly improve yourself. As long as you’re putting what you’re learning into action.
A Few Recommended Courses:
- Starting Your Own Business
If you’ve decided that you want to be a business owner, this free 5- day mini-course shows you step by step how to get started.
- How to Start a Blog
Lots of people wonder how to start a blog and then make money for it. Of all the course I’ve taken, two have really stood out, at least for me. Elite Blog Academy and Dare to Conquer. More about those later.
- List Building
I’m sure you’ve heard the thought that the “money is in the list”. Many recommend that you start your list as soon as you can. If you want more help in building your list the right way you can’t go wrong with Really Simple List Building by Connie Ragen Green.
- Social Media Courses
My major focus has been on Pinterest and using it as a way to generate traffic to my site. I’ve take a few different courses, but the one I’ve found especially helpful is Jennifer Maker Marx’s Pinterest course.
Domain names will be a necessity for certain things. You need to be in control of your business. It’s great to use sites like CJ Commission improve yourself. But you might wake up tomorrow and find that your entire account has been locked
That won’t happen when you have your own domain. Domains are one of your cheapest startup costs. They provide you with a certain amount of authority in your niche.
Having your own website allows you to make all the rules.
While there are tons of domain extensions out there like .info and .tv, etc, I strongly recommend that you try a .com. This is what is most commonly used by your audience.
There are many places to get your domain such as GoDaddy and Namecheap. Domain names can also be provided by a hosting service which we’ll talk about below.
Some domains, such as dot info domains, are less than $2 per year. Others, like the most popular dot com addresses, are only around $11 a year – but even then, you can usually find a monthly coupon code to cut that in half or more.
Hosting is what keeps your site live and online.
My favorite, and the one I use, is Siteground. I have never had an issue with my site being down. I’m also the least technical person that I know. Whenever I have questions (no matter what time of day) they have always been super helpful. I’ve never had an issue that they couldn’t resolve for me within an hour. Even if they had to research something and get back to me.
Other relatively inexpensive hosting options include:
Advertising and traffic
Some marketers never pay for traffic and others only use paid traffic. You can go either route, or a combination of the two. Free traffic can be generated from sites like Twitter, Pinterest, Facebook, etc.
Paid traffic can be found using solo ads, AdWords campaigns, and other avenues. Costs can vary – and you can do things on a small scale (like send a solo ad to a small list) and then grow it over time.
Facebook Ads can be a relatively easy way to get you started. I would recommend no more than $5/day when you’re starting out in order to figure out what works and what doesn’t.
There are tons of tools you’re going to encounter on a regular basis when you’re a new online business owner. In fact, many of the courses you take will make it sound like you won’t succeed unless you buy the tools. Don’t believe the hype.
You’re going to have to be discriminating. Consider what you really need versus what’s a luxury item as you’re starting off on this journey. Keyword tools are a good example of this.
You can pay hundreds of dollars for some top-notch keyword tools. You can also use free keyword tools that get you started. They may not provide as much in-depth detail as the paid ones, but that’s okay – it’s enough to get you rolling.
Two of my favorite, free, keyword-research tools are Google Keyword planner and Ubersuggest.
Email autoresponders are another option. You can use free tools like MailChimp if money’s truly an issue. Drip.com also has a plan that’s free for the first 100 subscribers. Email lists are important, and a free option could get you started without adding to your list of startup costs right away.
If you want to invest in your business, I recommend Kartra. They are a relatively new tool, but I love everything about them so far. It includes an email responder, lead pages, shopping cart, and many other bells and whistles. If you want to give it a shot, they have a $1 trial.
You’re going to want graphics for your website (a minisite package, for example). Those will include the background, header, footer, and even eBook cover graphics if you put out your own info product. I’ve found freelancers on Fiverr who do great work relatively cheaply.
As your business grows, or whenever you encounter something you don’t know how to do, you’ll need funds to outsource to someone else. You might outsource technical tasks – or time-sucking tasks like writing.
Prioritizing Your Spending
There are a million opportunities thrown in the faces of online-business owners. You’ll be told by everyone that you have to have certain courses, tools, and other items.
You have to prioritize what you want to spend money on according to what’s most important – and in what order. For example, you don’t want to spend money on a domain until you know what kind of business you want to operate.
Make a list of items you really think you need and items you want. Then put them in order of importance based on timeliness. At what point on your business journey do you need to have them?
As you educate yourself about creating an online business, you’ll have a better idea of when to invest money. Also, make sure you stick to a budget.
Don’t let experienced marketers, with hard-selling boiler rooms, pressure you into charging up your credit cards or getting into debt. You should save up for what you need and then pay it without having to go into debt to do so.
As you begin profiting, make sure you invest some of those earnings back into your business. You want to keep up the momentum and put your efforts on track to grow your success.
Alternative Options to Help You Move Forward
Partnering with someone is one way you can cut costs and increase your productivity. You need to be careful about who you partner with, though.
Remember when I told you I’m the least technical person that I know? WordPress help was #1 on my list when I was getting started.
Find someone who has complementary skills to what you have. For example, if you can write well, and someone else can handle technical tasks, that might make a great pairing. That way you are not duplicating your efforts or stepping on each other’s toes.
Barter with others to get what you need and want when you’re just getting started. If you see a course that you want, but you don’t have the cash, why not contact the owner and see if they need anything you have to offer?
Can you write? Offer some free pages of content in exchange for a copy. If you can do graphics, provide them with a free mini-site or ecover as an exchange. Don’t be too proud to make an offer to help build your business.
As you start growing your business, remember that speed and satisfaction aren’t the same things. You might find ways of profiting fast, but that doesn’t mean you’re going to be happy with that business model for the long-term. Do what you can to get take care of the startup costs to move on to the business you really want.
Be willing to reevaluate your business model over time, as you start making money and have the means to branch out. Make sure you are do something that will truly make you content.