Whenever people ask me how they can go about starting an online business, I ask them to think about how they would start a business but leveraging on the online platform to promote their products or services instead of the more traditional brick and mortar way.
And I refer you to How To Make Money Online where I cited a 5-step framework to guide you along from business idea conceptualization all the way to implementation and sales funnel automation. There are differences when it comes to marketing a business online but the key success factors for a viable business remain the same.
How Much Capital Do You Need to Start An Online Business?
Many people wonder how much capital is required to start an online business.
And when you search around on the internet, you are often told that it requires very little to start an online business. Some would even argue that it is almost free to start an online business.
I wouldn’t want to dash your dreams but if you are serious about starting an online business, be prepared to plan and invest like you are starting any other business less some of the costs associated with traditional business like may be inventory (if you are doing affiliate marketing, drop shipping), labour costs (if you are outsourcing some work activities), office rental costs (if you are working mostly from home) etc.
Nevertheless, it is more than just getting a web hosting and domain name!
As to how much capital is required, it really depends on what kind of online business you are getting into. Some online business can really cost very minimal to start like a blogging website and earning affiliate commissions through product reviews.
On the other extreme, if you are going to produce some new physical goods and selling them online, then you have manufacturing costs, sourcing costs and storage costs etc.
There are also costs associated with marketing and tools. Marketing costs like paid ads through Google Adwords, Facebook Ads. SEO takes some time to take effect and if you are engaging SEO professionals to do SEO for you, you need to budget for it.
Then there are also tools associated with running an online business. Do you need to acquire paid WordPress themes or even get professional web designers and developers? How about email marketing as most email autoresponders charge a fee? And sales page and lead pages development as well?
Do you take good photos yourself? Video content marketing often requires great story board and professional video production unless you yourself can do a decent job.
I would say most of these costs are still minimal but do not have a mindset that online business requires very little capital investment. It depends on your business proposition, the solutions you are providing, the niche market you are targeting, how competitive the market is and your specific business model. You can’t run away from the necessary operating costs and marketing costs.
So, do spend good amount of time on researching the business idea in the identified niche market, have a rough business plan regarding the revenue and profit potential. If the market by itself is a profitable one, you really don’t have to worry about the associated costs too much.
However, if the initial capital outlay is indeed an issue, then you may need to convince some potential business partners to inject funds into your business venture.
I wish you all the best of luck. Starting an online business should be carefully thought through. The internet and associated technologies have leveled the playing field for the smaller guys. If you have a good idea, 3.58 billion of worldwide internet users become your potential target market.
Anspire Consulting offers digital marketing services and while you focus on your business proposition, we welcome you to outsource the marketing aspects to us.