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What Does It Cost To Run An Online Business?

The Cost Of Doing Business OnlineMany people around the globe once thought the internet would be the greatest platform for the free, unhindered expression of opinions and ideas. A good number of them have become disappointed with the surge of net-taps and regulations aimed at stifling that expression.

Meanwhile, ordinary folks turning to the internet to build a business “for free”, or at least, on a shoe-string… have become similarly sidelined by the rising cost of doing business online. Many are even surprised to find that there is any cost at all!

 

The Free Platforms

Free platforms for running a business online are disappearing like dinosaurs, leaving some newcomers wondering if they really ever existed.

Remember when social sharing software was free? How about page editors, video uploading sites and even stock images?

And, oh yea… there was this social site called Facebook that people rushed to in order to advertise their products for… you guessed it… free.

Now, I’m only barely scratching the surface, here.

I’m sure that anybody who has been around for even a couple of years remembers the internet of the free.

Marketers loved it.

Social hounds craved it.

“Serious” professionals besmirched it.

Scholars abhored it.

 

Pay to Play

Today, a vast region of that land of the free has eroded into the sea, as if it never existed.

You want to know the hottest thing for marketers online today?

It’s grabbing your credit card, and rushing to Facebook to pay for ads like 49ers on a gold rush.

If you don’t know who the 49ers were, Google it. Searches are still free as of this writing. (Hint: we’re not talking about the football 49ers from San Francisco… most of your search results will probably end up there).

Facebook is far from free anymore.

It’s become big business, and corporations and high rollers are playing it like a fiddle.

Remember when people were first shocked that the big wigs paying for fancy SEO and backlinks were beginning to dominate organic search results?

I remember hearing a faint whimper when Facebook switched from totally free to totally pay to play.

But we acquiesced quickly.

Seems to be the way things go now.

 

What Does It Cost To Run and Online Business?

The better question is probably this: Why would I want to pay for an online business that I could have run for practically free only a few years ago.

The bad news is this.

If you want in on the game… you MUST pay to play now.

The good old days are over.

There are no more 8 bedroom houses overlooking the bay for $6,455.12 (yes, I have the commas and decimals in the right places, if anyone can remember that far back).

And if there were, the property taxes are no longer $150.

And there’s no more free Google Ads, Facebook Ads, Solo Ads, quality broadcast and syndication services, or any of the rest.

But, here’s the good news.

 

Everybody Loves A Happy Ending

Imagine social sites where everybody just drops spammy links all over the place and then run to their Paypal accounts to collect their commissions.

Imagine emails from a guy who every single, stinkin’ day was trying to get you to buy another Clickbank product.

Imagine reading keyword rich blogs that might read like this: “make money real estate because real estate you will make money houses foreclosure lake lots discount tax repo under $100″… interesting? valuable content?

How about landing on page one of Google in a keyword competing again 200 other sites? Page one is nice, 3 visitors a day… not so exciting.

All these things have been internet realities at one time or another.

The good news is that there are so many more people to market to online, now. There are such sophisticated methods for targeting markets so you are really talking to people who WANT to hear what you’ve got to say, or even sell.

And the price you pay to play this game leaves all the spammers and scammers in the dark, because most of them have not intention of paying for anything.

It’s true, you now have to play the game with other professionals, and not so many sandlot sciffs.

But as a professional, because you have to put money on the table, you now have “skin in the game”. You are now invested, not only financially, but emotionally and psychologically.

When you pay to play, you are ready to cross over into the serious world of running an online business… not throwing everything you can think of at the wall (ie., the internet “public”) to see what might stick. When you pay to play, you’re going to be very careful what you throw, and who you throw it at. If nobody wants to catch it… you’re out of business.

 

What Does It Cost To Run and Online Business?

Oh, yea, back to that.

Well, let’s just say this.

In terms of dollars and cents, online business is no different than offline business.

The more you can invest, the bigger and faster your business can grow.

But online business is very different than offline business in terms of leverage.

Even though you must now pay to play, you can still have a decent business up and running for under $1,000. You can even do it for a few hundred dollars, but remember… if you get too adamant about the shoestring thing, you’d better be ready to invest an awful lot of sweat.

Now where in the offline world can you even think of starting a business that cheaply?

Even if you just decide to paint houses in the neighborhood, you need business cards, a phone, ladders, brushes, rollers, drop cloths, maybe even liability insurance, and probably some sort of vehicle. You think you can do all that for less that $1,000?

In my opinion, the internet offers the greatest opportunity for the least amount of capital investment that can be leveraged beyond your imagination if you do it right.

To do it right, you need to start by going beyond the idea of spending the least amount possible, and start getting a grip on where it’s important to invest, and where it’s frivolous.

In future posts, I’ll go into some of the places I believe you can invest wisely into an online business… and how to go about that.

Do you remember the free days of the internet? Do you pine for those good old days, or are you happy to see it elevated to a more professional level?

I’d love to have your comments below, and I thank you in advance for sharing this article on your social sites.

David Merrill 101
I'm an Internet Marketer and Online Marketing Coach. My students learn no-nonsense, power strategies and techniques to build solid blogging and internet businesses. David Merrill+

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18 Responses to What Does It Cost To Run An Online Business?

  1. Julieanne van Zyl March 15, 2014 at 1:23 am #

    Hi David, I remember all the things you’ve mentioned, only too well. However, if you count your time “as money”, then nothing was ever free really. 5 or 6 years ago, I was making a full time living using SEO strategies to sell my products. But, it was taking a LOT of my time.

    I like the internet better now than it was back then – it doesn’t seem nearly as s’pammy as it used to be. Sounds like you like it better now too David?
    Julieanne van Zyl´s last blog post ..Ultimate Guide to Creating Lead Capture Pages with Genesis Themes in WordPress

    • David Merrill 101 March 16, 2014 at 2:18 pm #

      I do like the way you do business online now, Julieanne, better than when many more things were “free”.

      The problem back then was, that since people could do so many things for free, the environment was ripe for spamming and brute force campaigns that added no value, were not social, and became a total distraction from even using social sites.

      Now, a lot of that has been filtered out because there is a cost of admission, so people have to be more mindful to offer value, and offer it tastefully, respectfully, even socially.

  2. Sue Bride March 15, 2014 at 2:19 pm #

    Hi David. When I started online marketing 4 years ago free was still possible, although not ideal. Now we get the situation when you may have hundreds of likes to a Facebook page but only a handful of followers see your posts.

    I am looking forward to your recommendations for places to spend your money. It is a maze out there. I have spent money on things that seem extremely popular only to be disappointed. I realize the only thing good about them was the advertising and the affiliate program that prompts others to advertise too.
    Sue Bride´s last blog post ..Multiple Uses for Subdomains

    • David Merrill 101 March 16, 2014 at 2:22 pm #

      We really have been forced to put some “skin in the game”, Leslie.

      If we’re not going to invest and accept some financial risk, then our spam campaigns (“free marketing”) are going to fall flat. It’s a favor to spammers, because those spam campaigns never worked anyway, and now they are more likely to be spared their time and sweat investment.

      There are lots of places to spend our investment dollars, and I look forward to exploring what some of the better places to do so might be.

      Thanks for stopping by, Sue.

  3. Leslie Denning March 15, 2014 at 4:14 pm #

    Hi David. I run into this with people all the time. I even had a woman tell me that she didn’t think she should have to pay any money until after she had sold the product!

    People have an unrealistic idea of what a business online is all about. In no time in history have people been able to build a substantial income with so little money or backbreaking work. But it is still a business, and it’s not free.

    Thanks for this post.

    All the best,
    Leslie Denning, The Home Biz CEO
    Leslie Denning´s last blog post ..Why Empower Cash System?

    • David Merrill 101 March 16, 2014 at 3:04 pm #

      I love the second paragraph in your comment, Leslie.

      It’s a perfect summary of this entire article.

      Bottom line, as you say… you may choose to build your business online because it’s such a powerful business model, but don’t forget that “it is still a business, and it’s not free.”

  4. Rachel Lavern March 17, 2014 at 2:04 pm #

    Hi David,

    I remember my introduction to online business as finding, re-packaging and selling public domain content as my own money-making information product. All free for the taking without asking permission or paying a dime in fees.

    I soon found that there is a lot of incorrect information on public domain. I think that one of the biggest myths was that everything on the Internet is free to use and is already in public domain. Some people mistakenly believe if something is published online it is free for the taking. No way! There are very stiff penalties for violations of copyrights.
    Rachel Lavern´s last blog post ..Marketing Doesn’t Have to Be Frightening

    • David Merrill 101 March 25, 2014 at 12:02 pm #

      “No free lunch,” Rachel.

      Not even on the internet.

      Isn’t it amazing, though, how many people still get aggravated that they might have to spend a few dollars to develop a business on the most powerful business platform that has ever existed… ever!

  5. Yorinda Wanner March 17, 2014 at 9:37 pm #

    HiDavid,
    you done a great job shining the light on both sides of the ‘story’.
    Yes, you can do a lot for free online if you have the time to invest and than it is ‘not really free’ as it has been mentioned.

    Thank you so much for providing suggestions!
    Cheers,
    Yorinda
    Yorinda Wanner´s last blog post ..Having a Good Day with Nature and Beauty

    • David Merrill 101 March 25, 2014 at 12:05 pm #

      I wonder how much true value people get from a single college course that could easily cost several thousand dollars, compared to using that same amount of money for online training to build a business that could last a lifetime.

      You can still do a lot for free online, but like you suggest Yorinda, you’d better have an awful lot of time on your hands to make it work. (PS: you better know what you’re doing, too).

  6. nick catricala March 17, 2014 at 10:14 pm #

    David,
    I wonder when you stop teaching me what is going on on the virtual world haaha 🙂

    The more I read and the more I find out I do not know..

    Because of the nature of what I do, yes, I noticed that there were lots things for free before and now cost money.. but I was never into them in the first place so I did not miss them at all and I do not complain about what is the cost now.. BUT, I do pay attention and so I can say that Google or facebook and the likes, become huge and profitable because they find out day after day what to do to get people to pay for every thing that they can.

    As I see, and from part of what you wrote, everyone charge something to have the funds to go and pay for something else that they need.. meaning that is becoming as simple as every businesses transaction that ever existed for ages.

    You produce something for others to use and get paid and who pay must produce something else to earn and the circle never end.. that is where we are on the internet as well.. nothing change, except that earlier on, some things were free (till they figure out how to get paid) and now they are not.

    You worked hard to arrive to know all this stuff.. I thank YOU very much for sharing and let us (people like me who does not get much involved in these stuff)be aware in the event we need to get involved.

    Thanks so much again.
    _nickc
    nick catricala´s last blog post ..“How to create a sustainable and successful home based business…

    • David Merrill 101 March 25, 2014 at 12:08 pm #

      It’s a pleasure to see you here, Nick.

      I’ve always found that as free services and products on the internet convert to paid ones, their value to consumers increases exponentially.

      That’s just the way of the world (economically speaking) since the beginning of time, though, isn’t it?

  7. William Earl Amis, Jr. III April 17, 2014 at 8:22 pm #

    David,

    This would live for the ages, for sure!

    Yes, you have to invest your time which is the most valuable thing in life. Yet, some where down the line you will have to find something you love to use and cost. Then it has the ability to share with the world. That is, you would use it, if it were free!

    Now, then you have to understand that a onetime investment of money. Anything over $100.00 US is money. You will have to choose to do this. Make sure to complete your due diligence and what you love, others will need also. You are not changing any one’s life. Just enhancing what they do, and saving them money with time. That is something you may want to learn.

    David, you are priceless with quality useful information. I live to learn each day. This is one site which makes it possible.
    William Earl Amis, Jr. III´s last blog post ..The Plans Of The Righteous Are Just…

    • David Merrill 101 April 21, 2014 at 1:37 pm #

      I appreciate the sentiment that “you are not changing any one’s life… just enhancing what they do…”

      We do tend to give ourselves a heightened sense of self importance, I’m afraid, William.

      The truth is, like a good marriage, we don’t want to try to change anyone, only help them fulfill their own goals, and live their own passion. The real effort, impetus and cost for this will always need to be borne by them.
      David Merrill 101´s last blog post .. Email Subject Lines

  8. Leslie Denning April 18, 2014 at 12:58 pm #

    Hi David. I think I learned about ‘pay to play’ when Zeek Rewards, my first online venture, imploded LOL. I see so many complaining about this or that company charging, but for crying out loud Google, Facebook, etc., are not in business out of the goodness of their hearts.

    Businesses exist to MAKE MONEY, and that’s a good thing. It’s about time we all stopped demonizing people for doing what it the greatest source of good in the world. Thanks for this post.

    All the best,
    Leslie
    Leslie Denning´s last blog post ..The 11 Essentials Every Blog Post Needs

    • David Merrill 101 April 21, 2014 at 1:44 pm #

      The strength of any society, Leslie, is a reflection of how many people have the freedom to fulfill their personal missions in life, unimpeded by others.

      Bearing the cost of running your own business is a wonderful freedom that few peoples in history have enjoyed, and even as I write, is being stripped away every day by those who seek to control and overpower them.

      IMHO
      David Merrill 101´s last blog post ..Email Marketing Strategies for Bloggers

  9. Dawn Golden May 28, 2014 at 8:22 pm #

    I have been online for less than I year, so I can’t speak to some of the changes you mentioned here. It was a pleasant surprise to me that an online presence it not nearly as expensive as I thought it would be. Many of the small businesses I am working with to create a website are pleased, as well. Since i love marketing, the investment of time is pretty painless for me also. I think I am in my ‘happy place’ helping other online! That is an awesome thing.
    Dawn Golden´s last blog post ..Forrest Gump Would Be A Great Blogger!

    • David Merrill 101 June 22, 2014 at 8:58 pm #

      Nice job, Dawn. I’m glad to see you traveling along the path that is right for you. Good luck with your journey, and thanks for sharing your story and your thoughts here.
      David Merrill 101´s last blog post ..Everything Big Is Small Again

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