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If you are thinking about starting an online business, you might already know that you won’t have to waste money renting a space. However, did you know that there are still many different things you will have to budget for as you start your online business?
Advertising Isn’t Cheap
You will have to advertise your online business just as you would a traditional business. The first step will be to get potential customers to your website. The next step is getting customers to purchase something while they are there. This means you will have to get your business’s name out to as many people as possible, and this will cost you precious dollars in the beginning just to get your business up and running. Budget enough money to continue your advertising campaigns even once your business starts to generate a profit. You will need to pay for some marketing, but remember to take advantage of social media and other free sources of getting your name out to the public.
Online Costs to Consider
There are some online costs to consider for an online business. You will need to pay either monthly or annually to have a company host your website. Also, you will have to purchase a domain name to use on the Internet. You might even pay other websites to post links to your website to get additional traffic.
Production Costs Add Up
If you are going to be running an online store and have to produce the items you are selling online, you will need to factor in the cost of production. It may be cheaper for you if you can produce the items yourself, but you will still need to buy the materials needed and think about the time it takes you to produce the items. If you must pay a manufacturer for production, factor in these costs as well.
Storage Is an Issue
If you do not have a bricks and mortar location, you will need to think about storage. You must have a place large enough to house your inventory and all of your paperwork. If you do not have a space large enough, you might have to pay a storage facility to rent a space.
If you plan to use a manufacturing facility or plan to partner with other business owners, you will need to do some traveling. The price of traveling varies, but you need to factor in the cost of hotels, the air charter service and car rental. This can be hard to estimate in advance, but you can get quotes and generally get and idea of how much money you’ll want to put into your travel fund.
Finally, you must also budget for the cost of shipping. Since all of your business is done online, you will have to ship every item you sell, which can get very expensive quickly. Make sure you also budget for packing materials for shipping. You will need boxes, wrapping paper, bubble wrap, and tape just to get started. These items are not expensive, but the costs add up over time.
These five tips can help you budget for your online business. Proper accounting will either make or break your business. Make sure that you set up your budget before you start spending money. The most important step to financing for your new business is creating a do-able budget and following it accurately.
Image cover source: mynameisharsha
Guest post written by Kandace Heller