How much money do you need to start an online business

While online business start up costs are nothing compared to
the brick-and-mortar businesses, you still need to make some
minimum investment to launch a web business.

When you hear people say, "start a business on a shoe-string
budget", remember this: a shoestring also costs something.
And what for some people "small investment" means $1,000, for
others it might mean $50 or less.

So, how much exactly do you need to have available to start
an online company? Let's review the costs.

*Please, note: I am assuming that you already have a computer
and the Internet access - otherwise, you wouldn't be reading
this article :-) I am also assuming that you are starting a
basic online business - not an e-commerce web site with
advanced shopping cart system selling hundreds of items,
which would require a bigger investment.

1. Domain Name

If you are serious about your business, you want to choose
and register a domain name - www.yourdomain.com. You can
purchase it for as low as $16.00 a year. Some web sites offer
it for less, you just need to do some searching. Give a lot
of thought to your domain name - after all, it will represent
your company. I kept thinking about my domain for the longest
time. I wanted something unique, memorable and with humor.
That's how my HelpingFoot.com was born.

2. Web Site Hosting

Hosting is an absolutely necessary component to any web
business. Your web site has to reside on a web server, and
hosting companies provide you with space on their servers
for which you have to pay for. Of course you can choose a
free hosting company at first (such as Geocities.com and
Angelfire.com) but for reliability try to switch to a paid
one. I use Pair.com and my hosting fee is just $5.95 a month.
I also had to pay a one-time $28.00 set up fee.

3. Web Site Design

Now, the biggest stone in the web business set up - web
design. You can choose to do it yourself by picking up
a book for beginners, going through the free online tutorials,
or purchasingquality training materials to learn how to set
up your own web site. Or you can hire a professional designer.
Because web design is a relatively simple task for any
computer-literate person, just about anyone can call themselves
a web designer today. That's why fees vary greatly from $10
to $200 an hour for web design. You can probably hire a college
student to do an entire web site for you for $200.

That's it for start up costs.

Things like promotion, Search Engine submission and,
copy-writing you can do yourself at first, via free methods
and manual work. After you start making money with your web
site, you will be able to afford automating and outsourcing
many of these tasks.

Remember, you have to make a choice: you are either going to
invest money or time into whatever you want to do. At first,
time was the ONLY thing I could afford. But then I decided to
outsource a few things (some people have more copy-writing
talent than I do ;-) and invest a few bucks into my business.
The key is to invest it wisely.

Pay for something only when you are absolutely sure it will
bring results. Otherwise, spend more time researching and
observing other Internet marketers and their strategies.

As you start making money with your online business, your
purchasing power will increase. A year ago spending a $150 on
an autoresponder services sounded crazy to me and impossible
to afford. Now I look at it as a necessary cost of running a
business and saving time following up with my customers.

Let's summarize your online business start-up costs for your
first year of operation. If you start making money the first
year, your expenses might go up since you will probably be more
willing to invest:

- Domain Name: $16.00
- Web Hosting: $6.00 x 12 months + $28.00 set up fee = $100.00
- Web Design: $50 (training materials) or $200 (outsource)
- Totals: $166 (do-it-yourself) or about $300 (outsource)

As you can see, you still need to spend a little money to get
started. You can spend more or less money, depending on
how much time you are willing to put into your business.

If $166.00 seems like a lot to you to spend in 12 months, then
you might want to try a completely free web site offered by
Geocities or Angelfire, as I mentioned before. Your business
won't be as effective because there will be no company domain
name or a well-designed web site, but you will at least get your
feet off the ground and get a feeling of what it's like to run a
web business.

About the Author
Milana Nastetskaya is a full time web and
the author of two books: "Create Your First
Busines Web Site in 10 days" and "65 Instant Web
Design Answers".
http://www.firstbusinesswebsite.com
http://www.instantwebanswers.com

Written by: Milana Nastetskaya