Do you know the hidden costs of running an online business?
Starting up an online business is a great way to work for yourself and earn some extra cash. It’s a simple job once you get the hang of it, and with hard work and dedication, you can earn great revenue.
However, one myth is that they don’t require any initial investment. In fact, there are actually quite a few hidden costs that you will need to be aware of.
In this article, we are going to take a look at just some of them so that you can determine if it’s the right time to run an online business.
Want to learn more? Then let’s get started!However, one myth is that they don’t require any initial investment. #onlinebusiness Click To Tweet
Even if you decide to design and build your website yourself without assistance, you still need to pay for domain hosting. The cost of this will depend on your business itself, but it can be quite costly for those that are starting with nothing.
Cheaper hosting that is shared can be found between $2.49-$15, but dedicated hosting can cost between $80-$750 a month.
You’ll need to do some research to find something that is right for you.
While you might plan on marketing your online business primarily through social media, you’re going to need to pay some money in order to get your name out there.
Whether it be outbound, inbound, traditional, digital, search engine, content, video, or influencer marketing, they each have costs that you’ll need to prepare for. While they are essential, it can take a while to find out what works for you.
Everyone business is different, so you’ll have to develop a marketing plan.
Shipping and Delivery – A Big Hidden Costs of Running An Online Business
Another hidden cost that you may have to prepare for is delivering your products. For instance, parcel shipping can quickly add up to be a significant expense if you decide to offer it for free.
You’ll need to analyze your individual requirements and look at different companies to find the best costs possible. It can certainly be time-consuming.
Another hidden cost that you may have to prepare for is delivering your products. #onlinebusiness Click To Tweet
Permits and Licensing
Most people think that only physical stores need specific licensing, but online businesses also have to prepare for this. Depending on the type of service you are offering, you may need a permit.
You will most likely be required to register for sales tax and obtain a general business license.
While it will vary depending on your state and district, it’s something you’ll need to look into. Failure to follow the rules could result in some heavy fines.Most people think that only physical stores need specific licensing, but online businesses also have to prepare for this. #onlinebusiness Click To Tweet
Technology as Hidden Costs of Running an Online Business
One of the most important things you will need to run an online business is the appropriate technology. This doesn’t just include a computer, but also a stable WIFI connection, telephone, printer, and any other essential equipment.
While you might think that any old laptop will do, everything needs to be reliable. This helps you manage your store effectively, and you’ll be able to keep in touch with your customers.
The last thing you want is to develop a poor reputation because your WIFI cut out during an important phone call.
Alongside the physical technology that you will be using, you will need to pay for software to help manage your online business. This includes e-commerce software as well as subscriptions that will allow you to be more productive and efficient.
From accounting to communication platforms that assist you with project management, they are a significant monthly expense. Take a look at this commonly used business software to get started.
You can cut costs by comparing and choosing ones that are suitable for you.
Bank Fees Are Hidden Costs of Running an Online Business
When you’re taking payments online, you’re most likely going to be charged some type of transaction fee. It’s not going to seem like much at first glance, but when you add it up over time, it can be a significant amount that will come out of your profit. Therefore, consider using a credit union locally.
It’s essential to prepare for it so that you can develop an appropriate budget to manage your finances. You want to find out your total income before you start using your money for other things.
Don’t forget to calculate tax and any additional professional fees too.When you’re taking payments online, you’re most likely going to be charged some type of transaction fee. #onlinebusiness Click To Tweet
Much like licenses and permits, you might think that insurance is only required for physical spaces. However, it’s still essential to have it, even if you are only operating online.
General liability, product liability, and business interruption insurance keep you covered just in case of an accident or emergency. Trust us when we say it’s better to pay the fees than to end up with significant losses.
You’re securing the future of your business with insurance.General liability, product liability, and business interruption insurance keep you covered just in case of an accident or emergency. #insurance Click To Tweet
Employees or Freelancers
If you’re only just starting to run an online store, you probably don’t have to worry about paying anyone’s wages but your own. However, there could be a circumstance where you need to hire some extra assistance as time goes on.
This might not necessarily be a physical person but could include outsourcing as well. For instance, IT support, bookkeeping services, tax agents, virtual assistants, graphic designers, and social media managers all have their own fees.
It’s certainly something you’ll need to take into consideration, especially if you already see signs of growth.However, there could be a circumstance where you need to hire some extra assistance as time goes on. #onlinebusiness Click To Tweet
Even a business that starts from home still requires some type of space. If you haven’t already got a home office set up or an area to make your products, you’ll need to consider that expense.
Alongside the cost of supplies, you’ll have to remember that your utilities such as gas, water, and power may be increased. If you’re searching for office space, rent will also have to be factored into the equation. It all adds up and can take quite a big chunk out of your profit.
And that’s it! These were just some of the hidden costs of running a business. By being prepared for the unexpected, you can better your chances of success and growth to new heights.
It’s a lot to take in, but it will all be worth it. It just requires dedication and hard work. Have any expenses surprised you in your business? I’d love to hear about them in the comments below.