The Cost To Start A Web-Based BusinessThe Cost To Start A Web-Based Business

If you're thinking about leaving your day job to pursue your web-based entrepreneurial desires, make sure you do your research and understand the costs associated with starting an online business.

Register Your Business
The first step in starting a business of any kind is to register your business with your state and local authorities. Some municipalities require business licenses, while others do not. Service-based companies are often exempt from local licenses, as the primary objective of the city (related to business licensing) is to ensure they can collect tax revenue. Business registration costs vary for each state, and they depend on the exact legal entity type (e.g., LLC, Corporation, etc) but one-time registration fees typically range from $100 - $500 dollars. On an annual basis, states typically require businesses to file annual reports along along with renewal fees that typically range from $50 - $300.

Website Programming and Hosting
This is the most expensive part of starting a new online business. If you have web development experience, you'll be able to save a substantial amount of money. Of course, development will come at a cost either way, whether paid by time or money. For less substantial projects, you may be able to make use of content management tools or online web stores. But, for truly custom websites, you'll likely be looking at 2-6 months of true custom programming, which can total anywhere from $5,000 to over $50,000.

Advertising
When first launching a website, it can be very difficult to build up a sizable user base. New businesses typically look to Google pay-per-click advertising along with press-release services and other online marketing tools. Traditional media like magazines and newspapers also present advertising opportunities. Lastly, social media platforms like Facebook and Twitter provide solid and free ways to connect with consumers. Your advertising budget depends on how many visitors you need to send to your site, but a good estimate is that you'll need to spend at least $1 per potential customer to get them to visit your website.

Get Some Help
Running a business on your own is tough. At some point, you'll need a second hand. Interns are the lifeblood of many successful startups. Consider hiring an intern at $10 an hour to help with important data processing, sales, or other secondary functions.

Other Important Costs
You'll likely want to invest in a logo design that helps convey your corporate message. It can cost anywhere from $800 - $4,000 to work with a high-quality designer. Depending on your legal or contracting experience, you may need to hire a lawyer to help with website agreements and other contracting issues. Lawyer fees are obviously not cheap, and can quickly add up to thousands of dollars. On the technical site, you'll also need to purchase a domain name, and setup email and website hosting - for these costs, you're likely looking at $50-$100 a month for a dedicated server.

Summary
All in all, starting a web-based business is no easy task and requires significant up-front investment. The whole process can easily cost $10,000 - $55,000 to get off the ground. But if you're willing and able to make the investment, you'll most often find that the experience is something that you'll never forget. Even in the event of failure, this is better than walking away from something you'd always regret.
by Tom H2Base
References and Bibliography
Tom is the founder of "How to be a Struggling Entrepreneur", a blog that follows the progress of an anonymous American Generation Y entrepreneur. Through h2base, Tom offers candid and creative insight into everything related to being a modern entrepreneur.
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