How Much Does It Cost to Start an Online Business
In 2024 and beyond it has never been more accessible to start a business online, but how much would it actually cost to start one?
The barriers to entry are at their lowest, almost anyone on Earth can start an online business, and many actually do, but they fail to succeed in their adventures and reach “profitability”. Many reasons why that may happen, but one of them is the failure to calculate, and thus control, the actual costs of running an online business.
So in this article, we’ll guide you through calculating all the costs that may face you in your online business adventure in an attempt to provide more help and guidance so you can succeed in your journey, let’s start.
But before we begin…
Clarifying a Few Misconceptions About Online Business
An online business is an actual business, there’s no trick or hack that you can manipulate to start making millions of revenue from your store without paying much in advance.
You’ll need to run it with a business mentality and view yourself as a “businessman” if you want to succeed in this journey, and by viewing yourself as a businessman you’ll need to learn how businessmen run their businesses.
You’ll need to also learn that being a businessman is a mentality rather than just owning and benefiting from resources, you can start with as low of a budget as $10 or maybe less and you’re still considered a successful businessman, and you may have $100,000 or more in cash and still not considered successful.
It’s a game that requires more patience than enthusiasm, and very few know how to play the game properly, I hope this article guides you in the right direction.
How Much Does It Cost to Start An Online Business
To answer this we need to answer a few more questions, the first one is: what kind of online business?
Are you running an eCommerce business where you will have stock and inventory, or are you planning to run a dropshipping where all the costs are marketing and advertising costs?
Do you plan to run a services business where you offer your expertise to the world? Do you plan to sell physical products? Or digital ones?
Do you work alone or planning to hire a staff?
There are so many things that fall under the umbrella of “online business”.
Fixed Costs in Online Businesses
There are mainly three fixed costs in running an online business:
- Web hosting
- Domain name
- Software tools
- (Additionally) Salaries and Wages
Each one of these could cost you a penny or could cost you a fortune, depending on how fancy you’re planning to go.
For example, a domain name could easily cost you +$1,000 if you decide to go with a fancy domain name, but you could also get a free domain name with your web hosting package.
Web hosting could be as low as $1 a month if you go for shared hosting, and it could be for more than $100 a month if you go with dedicated servers and VPS.
Software tools could also cost a fortune or you could find affordable choices. You could find amazing software tools that have amazing features for free, such as the free version of our plugins, they are amazing, have lots of features, and our customers love it and when you are ready you can upgrade to the premium versions to access more features.
It all depends on your choice, budgeting, and planning.
The main variable cost that all online businesses need is marketing, that’s what makes online businesses succeed or fail in the online world.
In the online world, if you have the audience you’re half the way to success, the other half is providing great value for them of course.
Marketing could be online advertising on social media and search, or it could be for organic marketing (also through social media and search), both would cost time and money to succeed.
Marketing your business is the investment you’ll need to market to succeed in the online world because the “build and they will come” model never works in the online world.
Other variable costs you may face are shipping costs if you’re selling physical products, as the cost of shipping the items may vary based on sales volume.
So How Much Does it Cost to Start an Online Business?
The simple answer is: it depends.
There are so many factors in play when it comes to building an online business.
Two individuals may start a business of the same type and in the same niche and each one of them pays a different cost.
It depends on the strategy and on the goals you’re planning to achieve.
But in general, if you are an individual who wants to start a side hustle online, anywhere between $500 – $1,000 will be good to get you started, they you can evolve as you make progress and profits.