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The Cost of Starting an Internet Business

2011 November 16
by Annie Wallace

In this economy, which is having trouble bouncing back from the recession, employment has been difficult to come by. Even when the economy is robust, additional costs of employment, such as gas and daycare, take their toll on the pocketbook.

For these reasons, starting an online business can be a dream come true for many people, because the costs associated with child care and transportation are greatly reduced. Nonetheless, if you want to make money and not be stuck with debt from a failed business, you need to be aware of the start-up costs involved in this endeavor.

Computer Costs

Perhaps you’ve heard people say that their whole lives are on their computer? Well, that might not be true for everyone, but if you are starting a mom business that you are going to run over the internet, it is imperative to have a computer that works well and is reliable.

If your computer bombs, so too will your business. The customers you’ve built relationships with do not want to hear, “Sorry, but I had to deal with my computer crash and that’s why I was a month late providing you service.” Having a stable computer that will remain reliable is absolutely a necessity.

Since even brand new computers can incur disaster, you will want to also invest in a reliable back-up device. Ultimately, if you do not already have a reliable computer system, you’ll need to set aside $2,000 to $4,000 for hardware.

Connection Costs

Many of us live in a society where we can get free internet if we want it – it’s as simple as going to the nearest Wi-Fi hotspot with our laptop. That might be a great plan for many of us who are looking to save money, but it is not a great plan if you are trying to use your internet to run your livelihood.

Simply put, you will need to have a stable, fast internet connection if you want to run a business out of your home. Having a dial-up connection will make load times slow and decrease the average hourly wage you are making. For this reason, you will need to invest in a cable or DSL type of internet service. These tend to be the more expensive connections ($40-$70 per month) but they will be worth fitting into your business budget.

Website Costs

To run an online business, you are obviously also going to need to budget in the construction and maintenance of a website. These costs can vary considerably – some people have the skills do design and code the website on their own, which results on zero out of pocket cost. Others will need to hire a professional web designer, which can run you anywhere from $1500 to $10,000 depending on the complexity of the site you require, how intense a design process you want to engage in.

Even if you are able to completely design your own website, you will have to pay hosting fees and domain registration fees in order to make your website go live. Once you have a website, your budget must allow for advertising and marketing. Again, this budget will vary widely depending on the field you’re working in and how much cash you can make available for the purpose.

Starting an online business can be a rewarding financial investment, but you can cause yourself to fail if you do not realize that it is an investment – you will have to put up some cash to get started. You may need to secure a loan to make this money available, but be careful not to get in over your head. Best of luck in your new venture!

cc licensed ( BY ) flickr photo shared by Andres Rueda

5 Responses leave one →
  1. November 17, 2011

    If you want to plan a certain business it really needed money for the investment just be positive thinker that you may get back that money again and trust yourself as always…..

  2. November 21, 2011

    Starting an online business can be extremely rewarding however you shouldn’t think that just because it is online it is going to be less work. If you are carrying stock then you still have all of the issues revolving around stock management and you have the added issue of making sure that you have the best possible photography for your products.

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