Are you considering starting your own online business but not sure what you all need to get started or what it will cost?
The best part of having an online business is that the overhead is super low. You truly don’t NEED a lot of tools to get started. I know it’s fun to buy things but if your goal is to make a profit then you’re going to need to pay close attention and really think before you buy.
I compiled this list to hopefully give you some clarity on what you may need and a complete cost breakdown of the tools.
- Laptop: $300-$2000+ outright (or $15 – $150+/month)
You can run a business from a desktop computer, but I highly recommend a laptop. They’re usually less expensive, plus you have the added benefit of being able to take your computer with you when you travel. I also like to take my computer to local coffee shops to do work occasionally. Sometimes, a change of scenery can really boost productivity.
Many companies offer no-interest payment plans or credit cards if you can’t afford to buy a laptop outright. Assuming you need a new laptop every 1-2 years, it breaks down to cost $15 – $150+ per month, depending on the type of laptop you buy.
Here’s a little secret: when I first started my business, I didn’t have a computer or Internet access at home! I had to use the library. And while it did work, believe me, a laptop was one of my first purchases. It’s really hard to succeed when you’re working on a public computer.
- Business License: $10-$300+/year
Depending on where you live and which business type you’re claiming your cost on this will vary, but it doesn’t vary in importance. If you don’t get a business license, you could be facing huge fines. Do NOT skip this step! Depending on where you live, you also might have to file for a fictitious name separately.
- Email Marketing Service: Free-$300/month
One the best things you will ever do for your business is start an email list. It doesn’t matter what you sell. Your email list, hands down, is going to be one of your best sources of income.
Do not just keep a list of customers in a notebook or email people via Gmail. Use a reputable email marketing service to collect email address and email people about sales/specials, new products, etc. I use Ontraport, because it gives me added features for my online business. However, if you have a low budget or don’t need so many bells and whistles, MailChimp is free for the first 2000 subscribers, and AWeber also has very inexpensive plans.
- Good reliable Internet: Free (library/Coffee Shop) – $100+/month
You need your own computer, but you don’t necessarily need your own Internet to get started. It depends on the demands of your business. Just keep in mind that if you use Internet from a library or coffee shop, you are bound to working during the days/times they are open. Few places are open 24/7 and have free wifi.
It is super important that the Internet you use is reliable. This is the biggest advantage to getting your own plan at home or at an office.
- Accountant: $25-$7,000+/month
You’re going to want to make sure you’re legally doing your taxes correctly. An accountant will not only make sure you do things properly but also take a lot of weight off of your shoulders.
If you do opt to do your accounting yourself, keep in mind that you will still likely need to hire an accountant to file your income taxes at the end of the year. There are DIY options that are cheaper than hiring an accountant, but I really strongly recommend against them, since it is a complex process.
- Website domain name and hosting: $10 – $35 annually plus $5-$300+/month
I recommend that you have a simple website online, even if you are purely a brick-and-mortar business. People WILL Google you, and if you don’t have a website, you aren’t in control of the information they find. Your website allows you to not only find new customers/clients, but also to list your email and phone number and information about your company.
First, you will need to buy your domain name (the URL people will type into the address bar to get to your website). I highly recommend GoDaddy, since they are inexpensive and have amazing customer support. $10 to $35 will typically get you a domain name for one year.
Then, you need to buy monthly hosting your website. Hosting shouldn’t cost more than $15 and may cost even less if you just want a simple page with your information.
Keep an eye out for sales; GoDaddy and many other companies often run special deals where if you buy a domain name from them, you get hosting for free.
- Website Builder: Free – $100+
WordPress is, in my opinion, the best option for building your website. It’s generally pretty easy to build your site and update it, plus there are TONS of tutorials online to help you get started.
If you use WordPress, the look of your site will be controlled by a theme. There are thousands of free themes available, or you can purchase a premium theme, which usually costs $25 – $100. You could also hire a website designer and developer to create a customer theme for you.
WordPress also using plugins to add additional functions to your website. At the very least, I recommend installing a backup plugin so you aren’t at risk of losing your website, should something go wrong, and a social media sharing plugin (if this isn’t included in your theme), so that people can easily share your website with others.
- Editing Software: Free-$10+/month
If you plan on doing any kind of design, such as adding photos to your website, you’re going to need software to make this happen. The most popular option is the Adobe Suite, which includes Photoshop. If you just don’t have the funds you can check out Gimpshop which is a free alternative to Photoshop.
If you need to only do very basic design work, such as cropping images or creating collages, PicMonkey is a free option that is extremely simple to use.
You can also always outsource your editing to a freelancer so that you don’t have to do that piece of the puzzle.
- Social Media profiles: Free
Social media should not replace your website completely, but I highly recommend claiming your business name across all social networks and setting up basic profiles. Then, focus on using the 2-3 sites that your customers use the most.
I recommend, at the very least, setting up a Facebook page and setting up profiles on Twitter, Instagram, Pinterest, LinkedIn, and Google+.
- Your Office: $10 – 1,000+/month
Even if you work from home (and yes, even if you don’t even have a home office, but just do work from your living room), you will need some office supplies such as pens, sticky notes, a day planner/calendar, envelopes and stamps, highlighters, notebooks, etc.
Depending on your business, you might want to rent office space. If your business allows, check out shared spaces in your area, called coworking offices. This will be a big office room that you’ll share with other entrepreneurs who are working on their businesses. Every coworking office has different costs/rules, depending on location, but it’s typically cheaper than renting your own office.
You can also share an office space more informally with a friend who runs a complementary business to yours. For example, when I first started my photography business, I shared a studio space with a yoga instructor, since we were both looking for a big open space with a lot of light.
So there you have it… a complete “getting started” cost breakdown!
As you can see, I’ve listed pretty big ranges for most of these, because the specifics will depend on your business and industry. Let’s total it all up, though, to see the range!
Total Getting Started Estimate: Starting at $60 per month and ranging to $10,000 per month
$60 per month is about the cost of eating out at a restaurant with your family one or twice a month… so it is SUPER possible to start your own business, even if you are on a very limited budget.
The key is to grow slowly. Instead of incurring debt through a business loan or racking up credit card bills, try to start with the bare minimum and grow using your profits. That way, you have a much lower chance of failing, since you are moderating your spending carefully.
Trust me, I have seen way too many new entrepreneurs get a business credit card and go wild buying all this stuff that they “need.” It can be very tempting! But if you keep in check what you need versus what you just want, you’ll spend a lot less outright, and you’ll be able to start turning a profit much more quickly.
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