Online Business Startup Costs - Everything You Need To Know

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Online Business Startup Costs – Everything You Need To Know

Online Business Startup Costs - Everything You Need To Know

You have a unique new business idea, plenty of passion, but do you have the budget to make your business launch a success? 

Online business startup costs can be intimidating and confusing, especially with so much contradictory advice out there.

Will your launch cost pennies or thousands of dollars? Should you spend all your money now at the start for a big-bang approach, or hold on to it until you are ready to grow? 

Don’t fall into the trap of launching your new online business without first researching some of the costs that will emerge along the way. 

Here is a complete outline of your business costs before, during, and after the launch. Use this as a starting point to put together a budget that will help you launch a success story. 

Before Starting Your Business

Before you make your first business dollar, you’ll need to spend money on starting your online business the right way. Here are the costs you need to have in your budget before you launch. 

Getting Started and Registering Your Business Domain

Getting Started and Registering Your Business Domain

Before you can launch an online business, you first need a domain name. The decision you make at this point will determine much about your future online business, so take the time to get this right. 

As a small business owner, go with a name that reflects the brand you want to build. Pick a name that is memorable, easy to read, and easy to type. 

In terms of startup costs, registering your business domain is easy and cheap. Many online brokers sell domain names for as little as $0.99. But choosing the right domain name matters when it comes to search engine optimization.

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Business Domain Names and Search Engines Optimization

Consider what top-level domain suffix you want for your domain name. A .com address will come at a premium cost but is one your customers will see as reputable. 

According to Moz, less common top-level domain suffixes could be seen as spammy. This could ultimately hurt your search engine rankings. So despite being a cheaper purchase, avoid these and opt for a .com instead.

Buying an Existing Domain

If your preferred domain name isn’t available, you could always look at buying an existing domain name in an online auction. You can expect to pay tens or hundreds of dollars depending on the domain name quality.

Established domain names with a good history and a high domain ranking (from previous backlinks) come at a premium because it is faster to begin ranking them on Google when you launch.

As business costs go, it is worth the extra investment at this stage if you can afford it. 

Cost of Building Your Online Platform

Cost of Building Your Online Platform

Once you have your domain name, it’s time to buy hosting for your website. Hosting costs vary dramatically and can start from as low as $2.99 a month.

Many hosting companies offer incentives and discounts for new customers. Shop around for a good long-term deal instead of opting for hosting packages with the lowest upfront cost.

Hosting costs can often increase as your business grows, and many hosting companies will charge higher prices in year two. It is worth locking in long-term (two or three years) hosting to get the best deal. 

You will find that some hosting companies offer additional freebies with a new hosting package, such as a free domain name. 

Setting Up an Email Address

Before you launch your website, you will need a contact address for your business. Avoid free email addresses such as Gmail as these can be flagged as spam when used for business accounts.

Set up a real email address for your new website domain. Most hosting companies offer this at little or no additional cost. 

Setting Up an Email Autoresponder

If you plan on marketing via email, you will need to budget for an email autoresponder. An autoresponder allows you to collect email addresses and send emails to your entire email list.

Some platforms, such as Mailchimp, offer free starter accounts. However, if email marketing is a big part of your growth strategy, you might want to invest in a premium package from a leading autoresponder platform. 

You should expect to budget between $30-$99 for an email autoresponder if you need something more advanced than a free starter option. 

Setting Up Your Website

You might expect your website to be the highest upfront cost of starting a small business, but that isn’t always the case. What you spend will depend on whether you go for a DIY option or hire a third-party design agency.  web hosting. business owner eCommerce business, need to pay, business owners. website theme.

If your website doesn’t need advanced functionality, a free WordPress website plus a free theme may be all you need to get started.

One of the best WordPress builders is Elementor. They have dozens of high-quality templates for free that you can use to build your blog, site, eCommerce site, and more.

The downside of using a free template is that your customization options are limited, and you can end up with a website that looks the same as a thousand others.

If you have the budget, spend money on an easily customizable premium theme so that you can get the look and feel you are after. 

If you aren’t confident about setting up a website, set aside money in your startup budget to hire someone. A freelancer may cost anywhere in the region of $500-$5000 depending on the complexity of what you are after.

If you have the budget and tight launch timescales or are after a website that is a bit more technically complex, look at hiring an outside agency.

This option is not cheap. Agency costs are typically upwards of $5,000, and for large projects can run into six figures. 

Setting Up An eCommerce Store

Setting Up An eCommerce Store

If you are launching a new eCommerce business, you will need to set up a full eCommerce store with checkout and payment functionality. Fortunately, some platforms will allow you to set these up at the click of a button. 

If you opt for a free WordPress website, you can use WooCommerce. This is a free eCommerce plugin. It will help keep your initial eCommerce online business costs minimal until you grow. Some of the useful features that you will find are inventory management, tax deductions from your sales, vendor management, store management, and much more. Basically, everything that you will need if you are building an eCommerce company.

For those with a bigger budget, Shopify is one of the leading platforms to build your eCommerce platform. Their monthly fee starts from $29 per month plus a 2.9% and $0.30 per transaction fee. And the best part, you don’t need to develop any complicated software.

If you need something bespoke, you can hire an outside eCommerce agency to set a store up for you. However, this will have a large upfront fee, often in the four or five figures. 

Basic Management Costs

On top of your website costs, make sure you budget for other business and management costs during the setup phase of starting an online business

A good accountant is a sensible investment as this should save you time and money in the long run, especially when it comes to tax returns for your business and managing employee salaries.

Small business owners should also consider what legal business type they want to have and whether you need to hire legal experts to set up and register your business.

For example, if you sell your product or service directly from your site and collect your clients payments you need to pay especial attention where country are they based for tax purposes. In the other hand, if you sell your product through a marketplace this is something that they would do for you.

As you can see a small business doesn’t need to be complicated but there are many things that you need to plan in advance to take care of your future expenses depending on the business model that you choose.

Online business launch costs

Online business launch costs

Once you’ve set your business up, it’s time for the big launch. Here are the most important costs to budget for to ensure your new business gets off to a flying start. 

Marketing costs and Promotional Costs

Sadly, no online business gets fame and fortune unless time, money, or both is spent on online marketing. 

When it comes to calculating the cost to launch your business, consider how big you want your initial launch to be and how competitive your industry is. This will shape the sort of budget you will need to market your website. 

Whatever your marketing strategy for your launch, always make an investment into search engine optimization, as this is a sensible long-term strategy to get traffic and customers to your website, outside of any promotion or advertising. 

If you invest in search engine optimization from the start, it will allow you to recoup that investment earlier, as it takes months to rank on Google. 

There are other ways that you can market your business, especially for the initial launch. Cheaper options include social media promotions.

It costs nothing to set up an account, and with an ingenious online business idea, some creativity, and a bit of hard work, you can start getting your name out there quickly.

You can also set some money aside for pay-per-click (PPC) advertising. The good thing about PPC advertising is that you can opt for a budget that suits you, even if it’s as low as $5 per day or as high as $5,000 a day. 

The two most established PPC platforms are Facebook and Google ads. If you are in eCommerce, you should also consider advertising on Google’s shopping platform. 

Costs of Running a Small Business

costs of running a business

Of course, even with a successful launch, ongoing business costs can easily make or break a new business. 

When it comes to budgeting, cash flow should be top of your list. 

To ensure you have the cash flow to survive even the most unpredictable events, be conservative when it comes to predicting revenue, and be as thorough as you can about unexpected costs that may hit your business. 

For example, if you are an eCommerce store and you’ve budgeted for processing fees, how will your business cope if those fees go up? It’s good to consider these risks and put some continencies in place in your budget. 

Depending on your industry, it may also be a smart move to look into business interruption insurance to cover you in a crisis.

Relatively small insurance expenses are well worth the money when you consider how much time and cash you will have already invested in your business. 

Profit Margins

Few businesses make a profit in their first few months of launch, so it is vital to think about when you expect your business to be profitable. 

Consider profit margins, and make sure there is slack in your margins for any increase in expenses in the future. It’s far easier to build this into your pricing now than to hike your pricing after you launch. 

Cash flow and Ongoing Business Expenses

Cash flow and Ongoing Business Expenses

When you are budgeting for your website setup, don’t forget to consider ongoing monthly and annual business expenses for your website. Here is a list of some of the costs you will need to budget for:

  • Monthly or yearly hosting charges
  • Annual domain name renewal
  • Premium WordPress plugins with a monthly fee
  • Ongoing transaction fees for eCommerce platforms
  • Technical support for bugs, security updates
  • Critical costs such as your HTTPS security certificate 

Don’t forget to add financial and legal ongoing expenses, such as the financial software package you use. 

What Is the Cost of Scaling a Business?

What Is the Cost of Scaling a Business?

You’ve successfully launched your business, and after several months of long hours and marketing magic to reach a large audience, you’ve finally turned a corner and are now operating at a profit.

What next? 

Depending on the ambitions you have for your startup, you might want to think about how you can scale your business. 

Scaling a business is exciting. But it is necessary to go into this strategy with your eyes open and have a full understanding of some of the additional costs you can expect with a growing business.


Is it time to hire your first employee? Hiring full-time employees can be expensive for a small company. It isn’t just the employee salaries you need to budget for, but the benefits, overheads, plus costs such as training those employees.

A good alternative in the early days of scaling is to contract some of your work out to freelancers instead. This offers more flexibility, and with a global market of freelancers, you can find the talent you need at a reasonable hourly rate. 

Income Taxes and Other Taxes

Income Taxes and Other Taxes

As you grow, you’ll start to see the benefits of hiring an accountant. Consider how your tax situation might change as you begin to scale your business and ask your accountant for financial advice before making critical decisions.

Setting apart a sales tax business account is a good idea to plan future payments and acquire the right mindset.

Also, you can start including, after you talk with your accountant or financial advisor, for future tax deductions. Of course, this will depend on

New Products and Services

Scaling your business might mean expanding into new products and services, especially if you are an eCommerce business.

Do a cost-benefit analysis before launching new products, and always research the competition and the customer demand in that market. 

Business Expenses as You Grow

Don’t forget that as your business grows, so to will some of your expenses. Keep an eye on ongoing costs, especially when using platforms that charge monthly fees.

For example, as your sales grow each month, you might find it cheaper to go with a more expensive monthly package for platforms such as Shopify as they offer lower transaction fees on their premium packages. 

Online Business Startup Costs Don’t Have to Be Complicated

It might seem overwhelming to figure out all the online business startup costs you need to budget for before you launch a business, but the time and effort you put in now will benefit you as your business grows. 

So often, it’s the unexpected events that can throw a new business off-course before it has even begun to flourish. Don’t make the same mistake with your business venture, especially if it shows potential. 

Use this guide as your first reference point. But don’t stop there. On this site, you’ll find a full list of resources that you can use to guide your startup launch.

You can access the private resources section just here. Just complete the simple form, and you’ll get full and immediate access to a library of startup resources designed for entrepreneurs starting their first online business

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