For many aspiring entrepreneurs looking to get into the online business world, the first question is the toughest one: where do I start?
Well, arguably the important place to start is also the most obvious one—figuring out how much it will cost. And while drafting up a financial plan for an online startup isn’t the most exciting proposition, you’ll be glad that you took the time to do so once business starts booming. Here are five important things to think about when figuring out how much money you’ll need to start an online company.
Figure Out Your Housing Situation First
This might seem obvious, but hear us out. Even before you decide on a domain name, you should make sure that your living situation is financially secure. That includes paying your rent as well as budgeting for utilities, groceries, car insurance, credit card bills, and any other monthly costs you have. There are plenty of fantastic budgeting apps and tools out there, but our favorite is Mint, an iPhone/iPad app that’s intuitive and user-friendly. (Bonus: It’s totally free.)
Whatever your online business plan, you’re going to need to find a way to make money. There are a bunch of different ways of making revenue online, but the three most important are affiliate marketing, advertisement, and products. Our post on how to monetize your blog has more details on all three, but the important thing here is that you do some research to get a sense of how much revenue you can expect to make from each avenue. The blog Smart Insights has a great post that details how much money you can expect to make by using eight different revenue models.
Find a Domain Name and Website Hosting Service
Just as your apartment requires money to keep the lights on, so too will your online company’s website. Rebel has comprehensive hosting packages that will fit your needs, from a personal website all the way up to a large organization. On top of that, we’ve even got a sweet professional email product that will polish up your online presence. Try it free for the first 3 months (seriously).
You’ll also need a domain name for your new site—luckily for you, we’ve got that part covered. Rebel offers a wide selection of domain extensions at competitive prices, and we’ve even shared some tips on how to find the perfect domain name for your business! We know, we know, you’re welcome.
Get Some Funding
While it’s nice to have a rainy day fund when launching a new business, there are plenty of alternate means out there to help you get a head start in the world of online business. The U.S. Small Business Administration (SBA) offers loans for those hoping to start a small business. Check out this checklist to see if you’re eligible. You can also try your hand at crowdfunding—the most popular sites are Indiegogo, GoFundMe, and Kickstarter, the latter of which has raised over $2 billion for a variety of projects since 2009. And if all else fails, you can always crowdfund the old-fashioned way through social networks like Facebook, Twitter, or even (gasp) in the real world.
Don’t Quit Your Day Job
Well, not yet, anyway. While the online business world continues to expand, many online companies still struggle to make ends meet. About half of all new businesses fail within the first four years. Especially while you’re working to get the word out and build a customer base, we recommend having a second source of income to support your Internet enterprise.
If you’re wondering how to effectively burn the candle at both ends, here are some tips on how to handle a side project while succeeding at your job.
The average cost of starting a brick-and-mortar business is about $30,000, but it can be a lot cheaper for an online business. The actual cost varies, but there are a few expenses you can count on: incorporation/licensing fees, domain and website hosting, advertising, manufacturing (if you’re actually making something), and employee salaries (don’t forget to pay yourself!). Use a budgeting app to figure out how much cash you’ll need per month, and save or raise a few months of living expenses on top of that since most companies don’t start making a profit right away.
Feeling nervous? Take inspiration from these weird companies that achieved success because of—not in spite of—their strange and unique business approaches.