How to Calculate Start-Up Costs For Your Internet Home Business

Starting an online business is certainly less expensive in the long run than starting a traditional business.  Absent are all the traditional expenses of having a storefront business: renting or leasing space, equipment, manpower, employee benefits, payroll taxes, accounting and legal expenses… just to name some.

There are three things that every Internet marketing business needs to get started:

  • A Website
    • Business Location or Storefront
    • Brands You as a Trusted Source
    • Hosts Your Capture Form that Feeds into Your Aut0-Responder
  • An Auto-Responder
    • Service Your Clients
    • Announce New Products
    • Builds Your LIST
    • Avoids SPAM
    • Publish an eNewsletter or Training Program
  • A LIST
    • Your client/buyers
    • People Who Value Your Recommendations
    • People to Whom You Pass Value

This is the basic structure for Internet marketing.  There are a lot of different things that “spring-off” this structure, but this is the basic structure.  There is no real cost for a LIST per say.  The expenses are associated with an Website and an Aut0-Responder.  This is expenses are really minor.  If you use a HostGator/WordPress combination for your website, and GetResponse for an Auto-Responder, as I do, your monthly expenses are about $28.  With HostGator you can host an unlimited number of WordPress blogs/websites.  Keep in mind that every site has to be named and registered, so there is this expense as well.  This is an annual expense, not monthly.  I’ve registered mine through HostGator and they cost $15 annually.  If you have not yet done so, you might want to check out my video on HostGator.

However, the greatest single mistake that I see people make is not knowing how to advertise, market and promote (AMP) their web business.

Let’s face it, if you opened a “Sandwich” shop in your local town, you cannot just expect people to start showing up at your door.  I know this based on personal experience.  My brother opened a hoagie shop in Oxford, PA a few years back.  He made great hoagies and excellent steak sandwiches.  He had great products!  His problem was that he just was not doing enough in sales to generate revenue.  It took him a bit too long to learn how to put AMPs into his business.  His money ran out, and he had to close his business.  He failed.

I know he worked extremely hard to promote his business, but his business was started long before he had learned how to advertise, market and promote it. The Internet is full of great training programs.  But, you need to be careful.  You might spend thousands on a program when you really do not have to.  And, be careful about eBooks.  You first need to know, like and trust who you are buying from.

Educational programs can provide value, if you know the right program to join.  But, you always want to know why this “value” is a benefit to you.  For example, the one I like the best is called “Wealthy Affiliate University”  or the Wealthy Affiliate.  I am a member of the Wealthy Affiliate.  This is what it has done for my business:

  • Learned how to Focus on Developing an Opt-In LIST of Client/Buyers
  • Learned how to Optimize CLICKBANK Products – What products are hot, and what products to avoid
  • Taught me Search Engine Optimization (SEO).  This is critically important for your business Website. It equates to free organic traffic from the major search engines.
  • Allowed me to better Maximize my advertisements on Google, Yahoo, and MSN; and other minor search engines
  • Updates me with Continuous training to keep up with market changes
  • Taught me the value of and how to do Article Marketing, build free Squidoo lens, use Social Networks to increase traffic or visits to my website.

It costs about $328 annually, which translates to $27 monthly.  So, you can save money by paying the membership fee annually.  Or, if you prefer, you can pay $37 monthly. This price also includes hosting and a free site builder.  I do not use this feature, but you can.  If you do, you do not have to pay for the HostGator combination and can subtract $9.95 from your monthly operating costs.  I just prefer to pay that extra because WordPress is such a powerful and effective way of doing SEO.

One final note.  I believe heavily in transparency.  I do not like all those surprises after I initially pay into a program.  So, I do my best to make my recommendations as transparent as possible.  You will not have additional costs with HostGator/Wordpress.  GetResponse, like all other Auto-Responder services, uses tier-pricing.  The $18 monthly fee covers 1-500 contacts.  As your LIST grows you will move on the next tier and pay an additional $10.  Their free offer is for up to 10 contacts. There have been rumors that the owners of Wealthy Affiliate feel that their services are undervalued.  There may be a price increase in 2010.

In conclusion, your basic monthly operating costs are around $64.95 (includes HostGator/WordPress, GetResponse, and a monthy Wealthy Affiliate membership).  You have to admit… when compared to a traditional brick-and-mortar business, these costs are really low.  Are you going to make money this month, probably not.  But, neither will a more traditional business ‘in the beginning’.  There is always a learning curve and everyone’s is different.  I’ll do my best to keep you informed on methods and techniques to further decrease your particular learning curve.  You must do your best to learn how to earn and how to advertise, market and promote your Internet business.

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2 Comments

  1. Great Article. Keep Up the good work. Yeah, I think Wealth Affliate is a great idea. You article makes sense.

    • Thanks Ray! I checked out your site. It look real nice and highly effective. I’m going back to read some articles.

      Rick

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