Technically, you don’t need any money to start a business. You could walk across the street, cut your neighbor’s grass, collect your payment, and you’d have started a lawn care business without spending a dollar.
However, it’s not that simple.
There are overhead prices you’ll need to consider:
- Equipment: You’ll likely need at least a computer to run your business. Depending on the services and products you offer, you may need additional equipment and software.
- Utilities: Even if you’re just using a computer, you’ll have to pay for your internet and electricity. These are (relatively) minor bills, but they’re still expenses you need to consider.
- Hosting: Even consultants and freelancers need websites to market their services, and these require annual hosting, domain, and security fees.
- Maintenance: Computers need replacing, software needs debugging, and equipment needs fixing. Even if you’ve already purchased equipment, you’ll have to pay to maintain it.
- Licenses and Permits: You’ll have to pay local, state, and national governments to operate and sell, depending on your industry.
You might not face any of these expenses from the get-go, but expect to incur these costs within the first 12 months of your business.
Don’t forget to factor in the cost of your time. While that’s not a number you’ll see on your financial spreadsheets, the time you spend working on your business is time that could have been spent on something else. Calculate your opportunity costs to understand your true gains and losses. If you guys need any assistance regarding how to start an online business from home then must visit here.
So, how much money do you really need to start a business? Regardless of your business or industry, plan on spending at least a few hundred dollars every year. Of course, this number can widely vary depending on your products and services, but this should be a baseline to ensure you don’t go under.
