If you’re planning on starting your own online business, then you will want to know the cost of starting an online business. Just like traditional businesses, there are many different expenses for things you’ll absolutely need to attract more visitors and customers.
Here are some of the services you should consider when starting your own business and estimates for how much each one will cost.
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Cost of Starting An Online Business – Typical Expenses
Buying a Domain Name
Every website starts with a great domain name. Therefore, one of the first costs of starting an online business you need to consider is how much will your domain name cost you. You can easily check the availability of names and purchase them using popular registers such as Bluehost, GoDaddy, or Domain.com.
Estimated cost (from GoDaddy): $12 for the first year, $18 per year afterward
If you’d like your personal information to be hidden from the public, then you’ll also have to add on privacy protection when you purchase your domain name.
Estimated cost: $15 per year
Website Hosting and Templates
After you register for a domain, you’ll need a place to “host” your website. Remember that your website is nothing more than a bundle of files that can be accessed through search-engines (like Google). In order for people around the world to see these files, they will have to be kept on a host server for accessibility.
There are dozens of popular options for hosting services: Bluehost, GoDaddy, Hostgator, etc. Some will even give you a free domain registration and even privacy service for the first year.
Since this website will be for your business, it’s recommended that you select the hosting option that gives you unlimited bandwidth and a dedicated IP address. Although this will be more expensive, it will make your website load faster and crash less.
Estimated cost (from Bluehost): $14 per month for the first year, $24 per month afterward
Cost of Starting An Online Business: Website Builder
If you’d rather not build your website yourself, you have some options.
One would be to hire a web designer to build the site according to your wishes. Costs will vary depending on the experience of the designer and scope of work.
Services such as Bluehost and Wix have hundreds of starter templates that you can customize and make look just as good as anything you can find today online. Plus, many of these packages also include built-in SEO, social media tools, and dedicated 24/7 support for anything else you’ll need.
Estimated cost (from Bluehost): $14 per month and up
Whether you plan on selling physical or digital products, you may want to set up your website through an e-commerce service. Not only are they designed to advertise products and handle financial transactions, but they also usually attract lots of daily web traffic which can take a lot of the work out of marketing. You may want to include in your cost of starting an online business budget a popular e-commerce website like Wix or Shopify.
Estimated cost (from Wix): $23 per month and up
If your hosting provider doesn’t offer any assistance with technical issues such as troubleshooting, design, plugins, SEO, or backup assistance, then you can reach out to outside services for help. If you are using WordPress for your website, then you could use Blue Skye (from Bluehost) for website support.
Website support can be useful in reducing your learning curve for managing your website and reduce the time spent on finding solutions. While online searches and YouTube videos are great places to start looking for solutions, I got frustrated because I was spending a lot of time reading articles and watching videos that didn’t get me any closer to solutions. The live support helped me save time and shortened my learning curve. For those reasons, having live support is something to consider, especially for the first few months when starting your online business. This is one I encourage you to include in your costs of starting an online business budget estimate.
Estimated cost (from Blue Skye for WordPress Support): $29 to $150 per month
To separate your business from your personal affairs, you’ll want to have a dedicated business email account for it.
A popular option is Google Workspace (starting at $6 per user per month). This gives you access to dozens of useful online tools such as Drive, Meet, Calendar, Chat, Docs, Sheets, etc. If you already use Gmail, you can easily switch between your personal and business email on your laptop or phone.
Another popular option is Microsoft 365 (starting at $13 per user per month). Membership also includes access to Word, Excel, PowerPoint, etc.
Cost of Starting An Online Business: Social Media Marketing
These days, social media is one of the most effective ways to build a presence for your business. Depending on the images and text that are used, you can connect and attract specific niche customers.
To make your images as eye-catching as possible, you’ll want to use a professional graphic arts program. Canva is an excellent choice with professional accounts starting at $13 per month.
Canva is one of my favorite services! In addition to helping me make beautiful content for social media, Canva has also helped me to resize images and the Expanding Wallet logo for the various social media outlets. Canva is another strong candidate to consider including in your cost of starting an online business budget estimate.
Additionally, you can also automate your social media posting by using a service like Tailwind or Hootsuite. Plans start at $15 per month. If you are looking for a multi-service company consider SEMrush. SEMrush, a company awarded for their SEO service, also provides automated posting for your social media outlets. Most of these companies offer free trials, so you can get a feel for their services before paying for them.
If you’d prefer to outsource both the image creation and posting, you can find freelancers on sites like Fiverr or Upwork. Prices will vary by skill and needs but expect to pay roughly $100 per month and up.
You could also hire a professional social media marketing service. However, packages will be much more expensive and likely range anywhere between $400 to over $5,000 a month.
Cost of Starting An Online Business: Email Marketing Services
As you gain and attract visitors to your site, it’s going to be very important that you keep in contact with them. Keeping in contact with fans of your business can easily be done through the use of an email marketing service.
An email list through an email marketing service is important because you have little, to no control, over who sees your social media posts. However, an email list provides you greater control over who receives your messages. An email marketing service is a must-have, in my opinion, so make sure to add one to your cost of starting an online business estimate.
My favorite email marketing service and the one I would recommend to anyone getting started is Flowdesk.
Flowdesk has the following features that I love:
- Modern, beautiful, and easy to use email templates
- Integrates with your Instagram (IG), so emails can include your latest IG posts (great for increasing your Instagram followers)
- Best value at $38/month (use my special code for 50% off per month!)
- The price does not go up as the number of email subscribers increases!
The last point is the most important, I have not seen another email subscription service where the price does not increase as the number of email subscribers increases. This is huge as it will not increase your monthly costs over time as your business grows.
If you want more control in designing highly targeted emails consider ActiveCampaign, which charges start at $15 per month and gives you the following:
- Full-service free trial
- Precise email campaigns
- Lots of tutorial videos to show you how to use the site
- Great customer support
- Easy upgrades as your business grows
- High level of customization and targeting of email subscribers based on their interaction on your site or in emails
Other similar providers include MailChimp, Aweber, and ConvertKit. Keep in mind with those and ActiveCampain your monthly fee does go up as your email list grows!
If you are working out of your home and would like to keep your home address confidential, then you may want to purchase a P.O. box from the local United Service Postal Service. Prices vary by location and size of P.O. Box, but you can expect to spend approximately $3 per month and up.
If you’re expecting to deal with larger packages, then you can also opt to purchase a mailbox at the UPS Store. This will cost $25 per month (and up) and has a $24 initial key and startup fee.
Although the UPS option costs more than a P.O Box, it does come recommended for several reasons:
- Large packages signed and stored in store for you
- Notified when mail arrives via email and/or text
- Discounts on services
Cost of Starting An Online Business: Legal Needs
As a business, you’ll want to take precautions to protect yourself in the event of a liability. For example, you may want to consider the following:
- Creating an LLC (limited liability corporation): $50 to $500
- Obtaining legal advice and guidance
You can use legal services such as Rocket Lawyer or Legal Zoom to create these documents. Costs start at just $39 per document.
You may also wish to purchase general liability insurance. This will cost an additional $30 per month and up.
Using the estimates and costs we’ve laid out, below are the total costs you could expect to pay.
Estimated Monthly Cost Breakdown:
|Services||Low Cost Estimate Per Month||High Cost Estimate Per Month|
|Domain*||$1.50 ($18 / 12)||$1.50 ($18 / 12)|
|Privacy*||$1.25 ($15 /12)||$1.25 ($15 /12)|
|Legal*||$8.33 ($100/12)***||$41.67 ($500/12)***|
*Typically paid annually
** Varies depending on marketing needs and growth goals
***Varies by state and your legal needs
Total Estimated Monthly Cost = ~$143 to ~$675
This article is meant to give you a rough idea of how much an online business cost. For your particular endeavor, please use this guide as inspiration to conduct your own research to get a complete picture of your potential expenses.
If you discover that you’re short on funds, check out our article “At Home Side Jobs That Can Help Fund Your Dreams” for some ideas on how you can start making the money you need to get your business started.
Key Next Actions:
- Review the article and write down all the services you will need for your business and any services you will need that are not included in the article (recommend using a spreadsheet).
- For services in your list that are included in this article, visit the sites and verify the costs for your specific business needs. For each service record the initial/setup cost, if any, and monthly cost (keep them separated).
- Research and record costs for services in your list that were not covered in this article.
- Can you afford the initial startup cost and monthly business expenses until you expect your business to be profitable? If not, see where you can reduce expenses or identify ways to earn more money to fund your dream!
LEARN all that you can, BELIEVE in yourself, and take actions that allow you to GROW!
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