subject: The Basic Costs of Running a Small Internet Business [print this page] The Basic Costs of Running a Small Internet Business
Since starting the Small Internet Business Assistance program, one of the primary questions I get asked is: "what would it cost to start-up an internet small business on my own?" Starting an internet business may seem like a very inexpensive thing to do but there is surprisingly a lot involved in order to do it legally and do it right. Addressed in this article are the general costs of starting and maintaining a small business online.First, in order to conduct business in the US, your business must be registered with state, local, and federal governments. You must register with your state which you can expect to pay between $75 and $500 depending on the state you live in, and then a maintenance fee each year thereafter. Once you have registered with the State and the IRS, you will be expected to file taxes every quarter and then each year. As a minimum this will cost $250 each year and likely more depending on the state.Other basic business expenses that a small business has include an office ($500 each month), a toll-free number and fax line ($130 each month), a 24-hour call center for taking orders during non-work hours ($130 each month), and trademark registration fees in order to protect our new brand ($2000 once).Expenses associated with having a website include the cost of your domain (approximately 15 dollars each year), your monthly hosting service (we pay $50 each month for a service that does not limit the amount of e-mail sent, has a fixed IP address, has our own nameserver, and is not shared so we can properly secure against hacking), and FTP software for managing transfers to your host server ($30 once).Basic Expenses associated with selling product or services online include your e-commerce software suite (We paid $2000 for our package and continue to pay $800 per year for maintenance which is designed with search engine optimization in mind), SSL certificate to properly encrypt credit card transactions ($100 per year), e-mail marketing service ($15 to $300 per month depending on how many e-mails you send), and merchant account services in order to process credit card transactions on your site ($50 per month). Other selling expenses include registering for a UPC code if you want to sell on places like Amazon or want to distribute your product (minimum cost of $750 to start and $200 annually thereafter).So far we have only discussed the basic expenses associated with registering your business, having a business, having a website, and selling online. In addition to all of these expenses are the costs associated with growing your business, which can be unlimited, but as a bare minimum you should be looking at spending at least $100 each month if you expect your business to grow, and if you want it to grow quickly, you should be dedicating closer to $1000 per month or putting in an equivalent amount of time.Starting a small business can cost a lot of money doing it entirely on your own. But whether you have help or you go alone, the rewards can be great. Just make sure that you have the discretionary income to afford the process because businesses take money to maintain and grow and without constant support in the early years, even the best business concept can easily fail.
