If you want to run your own business and think, “I can totally get by on a small budget,” you’re not wrong. But because I see SO MUCH content online advertising how easy entrepreneurship is, or how you can “fast-track it and pay less!” concerns me.
It’s not because that’s not true. Some days, owning an online business is really great! And the further along you get, the more help you hire, and the more streamlined things become, it does get easier. And there are ways to grow your business without spending all your money and then some.
The problem? Too many people are reading into that and thinking running a business is going to be cheap and easy, when it’s anything but.
You can make do with what you got and still grow from it, but today, I’m going to show you the real cost of running an online business so you can know what to expect — whether you’re a new entrepreneur or are looking to grow your biz.
First things first — get that azz covered, legally. As an attorney, I know that there’s nothing scarier than the thought of getting sued, or getting in trouble with Uncle Sam. If you think you can scrape by without things like contracts, trademarks, and filing your taxes…think again (I’ve seen people NOT get away with it, and it’s not pretty).
I know these things can feel like a huge upfront cost, but in the long run, they’ll save you lots of money, time, and stress.
Though some of the following may vary based on where you live, you can expect to pay:
TOTAL: $1,375+ ($525 recurring yearly)
If you can budget for it, getting the extra help is priceless. Personally, the amount of stress and overwhelm it has saved me has been worth every penny. And while every business is different and will need different kinds of help (marketing, coaching, etc.), here’s how it breaks down in my biz.
TOTAL: $100,000+ a year — Contractors are THE most expensive part of running an online business, but they also help remove you from the business.
TBH, I’m thankful technology exists. We’ve made leaps and bounds since the days of frosted tips and jelly flip flops, and I’m just glad I’m an entrepreneur now and not then. Say what you want about technology ruining things…the jury is still out on that one. It’s made it much easier to sell digital products online.
I pay for things like:
Prices range by tool and year, so I won’t be listening those prices 😉
TOTAL: $15,000+ a year
Something I invested heavily in during 2022 were some pieces of high quality tech equipment since a focal point was getting my YouTube channel off the ground and my TikTok numbers up. While it’s nothing fancy, I truly think having these things has helped me step it up with my video content!
Please note: I don’t need as much tech as some companies, so this might be more for you! I usually buy:
TOTAL: $2,000+ a year
These are things I don’t need to spend money on — because there are free pens and paper everywhere. But I still buy them because I care about the quality of paper and pens I use.
TOTAL: The limit does not exist (just kidding, it’s about $500 a year)
Note: This will include things like packaging and postal fees if you ship physical products, but that can add up VERY quickly and you’ll need to figure that out when pricing your products.
Full disclaimer: I haven’t run ads for The Contract Shop® (my digital storefront) in all of 2022. I do have a Facebook ads team that I pay and use for my Christina Scalera brand, and those ads have cost me multiple tens of thousands of dollars.
Of course, if you run your ads by yourself and have a lot cost per action, you can definitely cut down on that. But so you know what I’m spending, here’s the rundown:
TOTAL: Over $40,000. Again, this is NOT for my product shop.
We did recently cancel our Facebook ads team contract because we weren’t seeing the ROI I wanted on this!
C’mon…you didn’t think I’d leave out your favorite did you?? 😉
Aside from legal services, this is one expense you don’t want to forget about. Getting in trouble with the IRS is no fun and you WILL end up having to pay the price for it.
To help you avoid that, I recommend hiring an accountant to help you keep track of your expenses all year, and to also help you file your taxes once it’s time. If you don’t have that, set aside 35% of your profit in an account you do not touch so you have enough set aside when tax time comes.
And don’t forget to set up payment systems and product taxes in your shop software!
TOTAL: 35% of your profit (revenue-expenses=profit)
Business isn’t cheap and it isn’t easy, but it’s totally possible to be ballin’ on a budget. But now that you know a rough estimate of what it costs to operate a business, you can prepare your finances for it.
And the next step? Getting focused so you can keep making that moolah through some great products and services!
If you want to learn my best tips for staying focused as an entrepreneur, then check out this video below. I’m going to walk you through how to cut through the noise to focus on what’s moving things forward and can give your biz a better chance of growth!