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Understanding what it REALLY costs Starting Your Own Small Business Online
If you have experience starting your own business off-line, you already know that your conventional business plan doesn't begin to tally what you really put "into" it. You already know that starting a small business requires more than money: it takes at least some of each of four "ingredients":
1 » money Each of those, in turn, involves 1) up-front costs, and 2) on-going or long-term costs. The importance of considering how much money, time, know-how, and work you give to starting your own business multiplies when you start that business online. Why it's important to tally each of the 4 ingredientsIt is almost too easy to throw up a website with the idea of starting a business overnight. In the off-line world, practical concerns -- such as leasing office space, hiring staff, or purchasing inventory -- slow down overly eager entrepreneurs. Online, there are fewer "speed-bumps" to slow down someone down. When you don't take the time to foresee what will really be required, that is when you are most likely to waste time, money, know-how, and work & effort. Identifying what you can invest and comparing it with what a particular internet business requires will help you to avoid common pitfalls that come from under-estimating what it takes. It is also easy to over-estimate and spend too much time (or money, effort, or work) on the wrong thing only to discover that too late. It is how you combine the 4 "ingredients" that can make or break your small business online. Why starting your own business online is so excitingIt is how you combine those "ingredients" that gives the flexibility that is found in starting your small or home business online.Online businesses can be started on any scale -- from a simple one page site, to a massive site with hundreds of pages. You can scale your internet business according to how much time, or money, or know-how, or work you can invest into it. Internet businesses are extraordinarily "scalable." It is also possible to start a business online with less time, less money, less know-how, and less work and effort, than most off-line businesses. In other words, you can start your own business online with less overall investment. The costs of entry and the risks of getting into business can be lower than they would be in the off-line world. But be aware that this only applies to some internet businesses, not all. Trial & Error...Many small businesses start up on the internet as by-the-seat-of-the-pants operations -- discovering what it costs as they go along.... Some are successful, but many more give up when they find one or more of the costs spiraling out of control, whether it's in time, money, know-how, or effort. Many internet business pioneers had to learn by trial-and-error because doing business on the internet was new. Now, though, there is a body of accumulated expertise to draw from. Although there is vigorous ongoing debate as the internet business world continues to develop, you should plan to devote some time and/or money to learning and planning. Costing your internet business planAs you work on designing your web site marketing and internet business plan, ask yourself the following questions about every business element you consider. Include what you put into learning, researching, preparing, and planning your online business.
Look closely at alternatives before choosing. Are there other ways to achieve the same result? Different methods of achieving the same result can have much different costs in each of the 4 areas. For example, hiring an expensive web designer may be entirely unnecessary for your needs. Spending a little time with templates could achieve the same result for a lot less money. On the other hand, a small money investment in a piece of software could save hundreds of tedious hours (or staff costs). If any particular element in your business plan requires "too much" of something -- money, time, know-how, or work and effort -- there is usually an substitute or alternative for it.As the internet continues to change and evolve, your costs are likely to change, sometimes at the drop of a hat. The development of a new piece of software might free up your time, changing the way you do business. A previously free promotional strategy may start costing money. A service you rely on may suddenly shut down. So, be prepared for it. Sometimes those changes will be in your favor, and sometimes they won't. If you have consistently questioned and tallied the costs of everything in your business, you will adapt to those inevitable changes much more effectively. Starting your own business online & creativity.You don't need it, but..."Creativity" can occupy a special place in doing business online. Going into business online is still such a new endeavor that new ideas are continuously emerging and evolving. "Creativity" simply means thinking of new ways to approach something, or new ways to combine existing ideas. It doesn't necessarily mean being "artistic." With creativity, you can make better use of what you put into starting your own business. A creative approach could
It's hard to predict how creativity will affect your business, so you won't calculate into your investments. Nevertheless, it can be the spark that makes your business sizzle! Add up the costs of an internet business planThe easiest trap to fall into online is not adding it all up. Here is an easy "formula" to remember whenever you need to know "how much?" something will cost at any stage of planning your online business:
This makes starting a small online business a special opportunity for the first-time entrepreneur. To be successful in your business, you need a good match between the money, the time, the knowledge, and the effort/work you can put into the business and what the business will require. For example, if you try to start a business that requires a lot of time to develop and maintain, but you don't have it -- you will quickly find yourself over-extended, unless you plan an alternative. Most likely that would involve spending more money. 2 ways todecide what kind of internet business to start1 » Know the business you want to start. Then, you will need to come up with the investments to match that kind of business. You will probably do some of both, developing your business plan from both directions. No matter which way you go about it, you will need to know 2 things:
If those 2
things don't match, you have 2 choices: The bigger the mismatch, the more likely it is that your business won't go according to plan. Seems obvious, doesn't it? Yet, too often, small and home businesses overlook this very thing, especially online. The good news...Online, there is usually more than one way to do anything. If some part of your business idea requires more money, or more time, or more effort, or more know-how than you can draw upon, there is often some other way to do it that will work better for you.
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