Costs of a Online Business: Overhead,Fixed Expenses,Cost Tips.

by J.Crawford on October 11, 2008

Cost of a home business vary widely depending on the business model and specific industry. We will outline some of the basic costs.

Cost Information to operate a Home Business.

What to expect from reading this post:

  • Learn the Must Haves.
  • Learn creative ways of cutting costs.
  • Learn how to get a good deal.
  • Learn tips on keeping costs low long term.
  • Define “scalable”
  • Learn the inevitability equation.
  • Determine business model examples.

Mandatory Costs Associated with an Online Business.

I don’t like the word mandatory any more than the next entrepreneur, but lets face it, there is always a price to admission. The good news is than the costs of an online business will be much less and front row seats won’t cost much more than the nose bleed section.

Web Platform Free-$180 Month… Money does NOT equal Value….

First of, your going to want to think about a website.  I will make a series of recommendations at the bottom of this post as to particular options. This is the single most important piece of advice you will ever receive about starting an online business…. Pick a machine, a tool, a solution for your website. Do Not spend 5k on a beautiful website. The Internet is huge and certain web applications (fancy for website builders) will save you thousands of dollars and years of hard work. Actually, depending on your business model and service industry, the wrong type of website will guarantee failure! So get this part right!

Hosting: Free to $25 Per month. I pay $6.95 a month with a 3 year deal… I love it.

Once you pick a website platform your going to need hosting. I recommend you host your own website for a number of reasons.  Blog platforms like blogger and word press (free hosted version) are great if you want to share stories with family, friends and an online community but if your looking to draw in targeted traffic and build a web business don’t do it this way. Why? The biggest reason is that you don’t own the site, the owners at anytime can simply erase your site! Ooouch! You can expect to pay anywhere from around 6.95 per month and up to around 25 per month. Not Bad, right.

Auto Responder Service $10 to $30 per month. I pay $19.95

The next thing on the list for things you really need to have to get your online business rolling is an auto responder service. What’s that?  It is a tool that will allow you to manage your mailing list, create mailings, newsletters and promotions to send to your list of people who have subscribed at your website. I will make a recommendation here as well, later on in the post. Depending on your business and the web platform you choose to use, you may not need an auto responder right away. And don’t make monthly payment, by the way, on anything you don’t need or can do for free. Costs of an online business can skyrocket just like a traditional business. You must be intentional about keeping costs under control. Cost creeeeeeep is the profit monster, don’t let it eat up your PROFITS.

Creative ways of cutting costs in your online business.

The online services we have talked about thus far can all be used to maintain more than one site at no additional cost.  So if you smell what I’m steppin’ in here, you’ll realise the first cost saving idea. If you have another site or maybe a friend wants to have a website online, talk to them and tell them you can help them, host there site and provide an online auto responder service. You just cut your costs in half!

Another thing worth bringing up is your lack of knowledge online. You will bridge that lack of online knowledge with information between now and when your business is successful. Here is a tip…. Get your information free. How do you do that? Well your doing it right now. Learn a bit about doing things yourself. This can seem overwhelming at first but at the end of the day your going to be a webmaster, like it or not. Even if you outsource the web “stuff” you need to know what your talking about to hire and evaluate the online services your getting.

Keeping Costs Down Long Term And Scalable Business Practices.

Online business costs need to be scalable. This means that as you get more traffic, sell more goods or services, or basically become successful, costs must remain close to the same. All of the items we have talked about up to this point are scalable… Provided you use the right online web platform. Your expenses should not increase as online activity increases.  You can negotiate after you’ve been a customer for a while or your service providers may have an online affilliate program that can completely offset your costs all together.

The Inevitability Equation.

The what? The Inevitability equation goes something like this. ” If I keep doing thus and so, it is inevitable that I will become successful” Simple, right?  It comes down to staying in the game long enough to become great. And you will become great if you set yourself up for greatness. Don’t spend your way to a disconnected Internet connection in other words.

This post is a work in progress. I will add more at a later date. Any specific directions you would like us to go???  Leave your comments.

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