How Much Money Do You Need to Start a Business on the Internet?
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| Photo by Mufid Majnun on Unsplash |
Hanifmr.com - An idea for starting a business on the Internet is often found quickly.
But it is not so easy for many to become self-employed. Many are particularly concerned with the cost of starting a business.
In this article, I am going to talk about how much money it takes to start a business on the internet.
How Much Money Do You Need to Start a Business on the Internet?
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| How Much Money Do You Need to Start a Business on the Internet? |
In many cases, starting up on the Internet offers a great advantage over starting an offline business. It's relatively cheap, apart from special cases like an online shop.
But when it comes to the question of costs, you have to distinguish between 2 areas.
On the one hand, this is the money that you need once at the start-up to start your own online business for the first time.
On the other hand, money is permanently necessary to develop the business and especially to survive the difficult first period.
Money for the Establishment
To start your self-employment you need money to create the prerequisites for self-employment in the first place. This includes:
- Work Equipment
To be able to work online at all, you need a computer with a monitor or a laptop.
In addition, depending on the activity, certain paid software is necessary, even if there is good free software available today. - Marketing
Depending on the industry and activity, business documents such as letterheads, business cards, or the like are important. Often a company design including a logo has to be created first.
Having your website is indispensable today and, depending on the activity, is sometimes also a central component of your own business.
In addition, the first advertisements and/or online advertising may be necessary to attract customers. - Office Equipment
You can of course work in your bedroom, but a table and chair will probably be necessary there too.
If you have a home office or even an external office, you need a lot there to be able to work.
A smartphone should not be forgotten, as communication with customers, etc. is very important. - Know-How
Nothing works today without further training. You have to acquire a lot at the start of your business and, in addition to free sources, books may also be necessary.
Online courses or seminars can also cost money. - Product
Anyone who relies on the sale of products in their online business must buy them or have them manufactured.
But virtual products, services, or offers can also cost a lot of money at first. - Fees
In addition, there are a few costs involved in setting up a business, e.g. for registering a business.
What Do You Need?
Everyone has to clarify individually which of these things you need yourself when starting a business.
It should be clear that you should invest as little as possible and as much as necessary here.
Many founders spend next to no money on founding them. But of course, there are also business models in the network that require larger investments.
I started my own business at a very low cost. All that was needed was a PC and a few business documents.
Running Costs
The second cost factor concerns the running costs, which unfortunately are underestimated by many start-ups at the beginning.
These include:
- Rent
Anyone who rents an external office must of course pay rent.
That can be one of the biggest cost factors for founders. - Cost of Living
Many founders underestimate their own cost of living.
You should think about it in detail and plan honestly what money you need each month. - Marketing Measures
Regardless of whether you have to win customers or advertise your websites, very few start-ups will be successful without marketing.
This means that there are permanent marketing costs that can be kept relatively low by taking cheap measures.
The hosting and other costs for your website also fall into this area. - Transport
Anyone who has to drive to customers or an external office has costs for the car or public transport.
In doing so, you should not only think of gasoline but also repair costs and the like. - DSL, Telephone
If you want to be self-employed on the Internet, you must of course also have Internet access.
A DSL connection including a telephone no longer costs the world today, but one should still think about it. It will then be more expensive to use the mobile Internet and make phone calls. - Insurance
Starting with your health insurance up to special professional insurance, start-ups have to pay relevant costs.
But you shouldn't save in the wrong place with insurance, as this can quickly endanger your existence. - Retirement Provision
You shouldn't wait too long with retirement provisions. For a start-up in their mid-twenties, that's a long way off, but time goes by quickly.
And the longer you wait, the more expensive it becomes. I know a few self-employed people who have saved these costs and are now faced with the problem of actually not being able to retire.
Calculation and Planning
In particular, the running costs are usually the much larger cost factor for Internet founders. That is why it is important to always keep an eye on the expenses.
A financial plan is therefore highly recommended, on which all future costs are noted. This way you can put your financial resources aside much better and you won't be caught unprepared.
In addition, it is important to include all costs in the calculation of hourly rates, product prices, and customer offers.
Such planning may seem narrow-minded and time-consuming, but it protects you from liquidity bottlenecks, which are a common reason for self-employed people to fail.
I have had very good experiences with financial plans. In the first years of my self-employment, I planned very precisely when which issues came, and not only once did it just fit. If I hadn't planned so foresight, it would certainly have been problematic more than once.
Savings or Credit
But where do you get the money from, which you need for the start and the first period of a business start-up?
Many founders fall back on savings, which is of course a good option. You don't have to borrow outside capital and so you can survive the difficult first period.
However, if you have no equity, you often have to take out a loan or raise money elsewhere, whether you like it or not.
Funding is one possibility, but these days there are only granted to a limited extent.
From my experience, I can say that having enough of your reserves makes a lot of sense. Starting without your financial resources, on the other hand, is very daring. I specifically covered my living expenses from savings for the first year.
Of course, I have also put some of my resources into my own business.
Time Instead of Money ?!
Many founders want to spend as little money as possible at the beginning, which I can understand very well.
Instead, time is invested in many areas, which is completely okay at the beginning. When founders usually have a lot of something at the beginning, it's time and energy.
Instead of hiring a company, you can create your website. Instead of placing advertisements, people prefer to be on social networks, build a blog or go to round tables. Instead of using professional software for accounting, one struggles with Excel.
However, one should be careful not to handle this permanently. In the long term, it tends to slow down your independence, especially since you simply can't do some things as well yourself as an expert.
How Much Money Do You Need to Start a Business on the Internet?
There is no general answer to the question because it depends on the industry and the respective business model.
Nevertheless, it can be said that to start self-employment on the Internet, you usually don't need a lot of money.
On the other hand, the running costs can quickly grow over your head if you are not careful. A long-term financial plan and your reserves are highly recommended.
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