Knowing how much you need to invest to start your business can feel confusing and overwhelming. In this episode I simplify it for you as we break down necessary and variable costs (5:15), talk about what permission-less leverage is (9:40) and come to the final total that you need to start an online business (16:40). And trust me, its not as much as you think!
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The Wanderlover podcast was created with a mission to enable travel and freedom through entrepreneurship. I’m your host, Danielle Hu business mentor, content creator, and founder of The Wanderlover tune in every week for episodes about travel online business, social media, and mindset that will inspire you to take massive action towards living the life of your dreams. If you’ve been enjoying the Wanderlover podcast, if you’ve been tuning in and finding inspiration and taking away value, it would mean so much to me. If you could take a second to leave us a review on apple podcasts, I continue to record these episodes for you every single week and take all of your comments and feedback to heart.
Thank you guys so, so much. Hi everyone. Welcome back to The Wanderlover Podcast and hello from Miami. I am here for two weeks visiting my best friend and business partner, co-founder of Anda. For those of you who don’t know, I own a jewelry line with my best friend from childhood. You can tune into our episode together (Episode 42) where I interview her about our business relationship and we talk all about our jewelry line for the past week. We’ve just been going to the beach, kite surfing, making Tik Toks and it’s hilarious because both of us just started the show hype house. I don’t know if you guys have heard of it, but it’s basically these really famous young Tik Tokers who all live in a giant LA mansion together and they just create content.
Danielle (1m 41s):
So when we were creating our Tik Toks and reels, we were like, whoa, this is our little hype house. And it’s just been such a fun time before we get started with today’s episode. I also want to announce that weightless for momentum mastermind is open. This is my four month group program for new and early stage entrepreneurs making less than $5,000 a month. And it’s an accountability program. It’s a support program. It’s where you’re going to be working every single week with like-minded creatives and coaches. The first round of 2022 will begin in March. So if you want to sign up, you will get early bird discounts and exclusive access.
Danielle (2m 22s):
The link is in the description to get on the wait list for it Momentum. So in this week’s episode, I want to go into the technicalities into the numbers. How much does it cost to start an online business? This episode was inspired by a few members of the Wanderlover community on Facebook. So my free Facebook group, where they asked how much it would cost for them to get started, because there’s so much on the internet, right? People telling you so many things that you need to buy and invest in. And you’re like, do I actually need that? I don’t know what is a necessity and what isn’t. I know some of you listening may be feeling the exact same way. So in this episode, I’m going to share what I recommend for my clients to invest in and also give some insight into how I invested my money when I was just starting out online as well.
Danielle (3m 14s):
I’m going to be putting numbers to all of these so you can get a really exact amount. And my hope for you is to realize how possible it is for you to get started, to know how much you need to be investing every single month. And that’s how you can start making the calculations in order to get your business up running and thriving in 2022, you can then see, okay, if I save, you know, one dinner a week and save $40, then I can invest that towards this specific software. I also want to make clear that I work mainly with online service based businesses. So this will look like different coaches, different creatives, fitness coaches, health, and wellness, business bloggers, influencers, therapists, spiritual coaches.
Danielle (4m 3s):
And this is solely because I work and operate on an online business model. I’ve tried Amazon FBA, I’ve done drop shipping. I now sell physical products. However, for those of you coming into the Wanderlover community, I will always guide you towards the online business route. I’ve tried and tested many ways to make money online and with an online service-based business. So that’s what I call your core business. Of course you can sell stickers. You can sell physical products. I call those your passion businesses. But this episode specifically is going to be an online service based business.
Danielle (4m 44s):
And you will learn. This is because you don’t have to deal with inventory. You don’t have to deal with shipping. You don’t have to pay rent. There’s no overhead. And of course you are able to work anywhere around the world. If you really focus on making your business sustainable online. So to start with an online business, you will need a phone and a laptop. I’m going to assume that most of you listening already have those two pieces of equipment. So I’m not going to factor that into the initial cost, but I’m going to have those as upgrades. So what I’m going to do is break down this episode into essentials and then to variable essentials variable essentials mean they are definitely necessary in any online business, but they totally depend on what industry you’re in, how much savings you have, how much money you have to invest.
Danielle (5m 39s):
So those are going to be variable because they can fluctuate depending on your current situations. And I have a feeling that by the end of the episode, a lot of your doubts and a lot of your assumptions on how much it does take to start an online business, you’re going to be pleasantly surprised. Okay? So let’s get started. The first essential I will always, always recommend is learning. If you don’t come from a business background, if you’ve never made money online, I would highly, highly recommend learning business and having a roadmap. So you’re not just treating, you know, social media as a personal account, you know exactly what to work on first.
Danielle (6m 23s):
You know what to work on next. This can look like courses, certifications, memberships, but really learning about the business side of whatever it is you want to do. I look at this like getting piano lessons. If you want to learn piano, taking surf lessons, if you want to surf, you’re not going to just expect that, you know, everything from the beginning. I learned this the hard way for a while, while I was in corporate, I was just trying to figure things out, using YouTube, using free resources. And that’s probably why it took me a bit longer in the beginning to figure it all out and looking back. I just worked a lot on things that in retrospect didn’t matter at all.
Danielle (7m 5s):
And it wasn’t until my first business course that I invested $600 in, honestly, at that time, that felt like such a huge chunk of money, but it gave me the clarity and the resources I needed to be able to make that $600 investment back over and over and over again. And now I’m like, if I can pay $600 to make $3,000, by the end of the program, I will happily pay for that. I went on to invest $6,600 on a business building program. And that also scared the shit out of me. I remember it was such a huge investment for me at the time, but I knew that I could make it back.
Danielle (7m 49s):
And since then, I’ve gone on to spend five figures on business building programs. So I can speak from experience and being a Guinea pig in the online business world that you will probably want to invest in learning for this essential. I’m going to budget for you around $1,000. That is the investment cost of Wanderlover business academy, 2.0, and if you are interested in starting an online business, this is the roadmap. What I’ve learned from just years and years of experimenting of executing package really nicely in 2022 format that will help you Excel in this online world.
Danielle (8m 30s):
These are the types of programs that’s going to save you a lot of time. And a lot of money doors are closing in two weeks. So if you want to start and scale online, by the end of the month, then click on the link in the episode description. Next we have what I call vehicles. So once you have your online business idea, then we want to have the storefronts to show the world who you are, what you’re about and what you offer. This will look like a website, right? And the cost of a website. If you do it yourself, it’s pretty straightforward. I have modules and my private coaching programs that just walk you through how to set up your own website, including your domain, that will cost around $200 for hosting for the year.
Danielle (9m 18s):
And if you want to kind of upgrade and make it look nice, you can buy themes that range anywhere between $50 to $200. But in total, you should be spending, you know, around $250 to set up your website and in the future, if you ever want to upgrade, this is why we have the variable essentials. Like in the future, you can upgrade, hire a web designer. And of course their prices are going to range anywhere between $1,000 to $10,000. But that is definitely not an essential to get started. What’s also amazing about starting an online business is you can have vehicles on social media that are completely free.
Danielle (9m 59s):
You can have business accounts on Instagram, on YouTube, on Pinterest. And this is what we call permissionless. Leverage. It almost acts as capital that you invest into your business, but media is completely free. Anyone can start creating and these platforms will amplify your message. So if you want to sell on social media online, just simply create your accounts and you can start reaching your ideal audience. Next, we have your email list. So I recommend active campaign to start it’s around $10 a month, but this is how you’re going to manage your clients. Get people on your email list, interested in your offers and nurture them through a sequence so that they can book a call.
Danielle (10m 47s):
They can get in touch and they can buy or sign up for your offers. Next essential is going to be Skype or zoom. So if you’re an online service-based provider, you’re probably going to have calls with clients one-on-one or in groups. Zoom is $15 a month. So that’s $180 for the year last but not least in essentials. What I recommend is registering your LLC. This is in America, you do it by state, and it will vary anywhere between 200 to $400 to get your EIN, to get your number. So you can set up your own business bank accounts, your business credit cards, and just have your business income and expenses divided from the beginning.
Danielle (11m 33s):
So you’re not, you know, using your personal money to invest into your business. And then every time you make a sale or make income from your business, then you’re spending it on your personal life. I think it’s just really important to divide it from the beginning. So you’re not confused and you can treat it as an actual business and that’s actually it for essentials. Of course, there are going to be other programs, other things that you need to be on, but they don’t cost anything. So you can sign up for a PayPal business account for free, right? You can sign up for Stripe. And so if you invest in these five things, so learning a thousand dollars website, including domain and a theme, $250 email list, $120 for the year, zoom, $15 a month.
Danielle (12m 20s):
So $180 for the year, your LLC registration, 200 at $300. That brings our total to just under $1,800. These are essentially, they are pretty uniform across the board. So now let’s move on to variable essentials. These are going to depend on your industry and on your situation, these aren’t going to be applicable for everyone listening, because depending on your business model and what you’re pursuing, it might also be different. But just keep in mind what these other essentials are for your line of business, and then add it onto the 1800. So first variable essential is marketing.
Danielle (13m 2s):
How much do you want to spend on marketing? And please note Instagram reels, Tik TOK, all the free platforms. They are great marketing tools, but it’s going to be even more powerful. If you have a predictable marketing plan that doesn’t rely on any other algorithm. So with Facebook ads, with Pinterest ads, you can spend anywhere between $5 a day to $500 a day to $5,000 a day. This is completely dependent on your industry, on your situation and what you’re comfortable with, but marketing is essential to constantly grow your brand and get your name out there.
Danielle (13m 45s):
You can also hire people to help you with marketing. So of course that’s another additional expense, and this is why it’s under our variable essentials are two other expenses. Under variable essentials will be really dependent on what products or services you’re offering. So what I have down is a checkout cart. Will people need to be buying straight from your website, right? Do you need to invest in blue commerce in thrive cart? If that is a necessity, then factor that into your budget. The other one is course hosting. Are you going to be teaching an online course? And will you need something like Kajabi to host the course on and to sell the course on depending on what you’re going to be doing, you’re going to need to factor that in.
Danielle (14m 32s):
But of course, it’s not like a blanket essential for every person out there. Maybe today, you don’t need one, but then next year you want to launch a course. So that’s when it’s going to come into play, but it’s not a startup cost. Our last category is called upgrade. So these are optional, but they’re obviously going to make your brand look better. So maybe you can invest in a branding photo shoot for your website and your Instagram. That can go anywhere between five hundreds of $5,000, you can upgrade your G suite or increase our Google cloud storage. If you’re going to be uploading videos, those are also going to be optional upgrades. You can hire a web designer to make your website look really nice.
Danielle (15m 11s):
That can go from one thousands of 5,000 to $10,000. You can upgrade your phone and your laptop and all of these are optional. So I don’t want you to get caught up. You know, everyone thinks that they need the best website to begin with, but I started off with a free theme on WordPress. And that was all I needed to start done is better than perfect. If you find yourself really getting overwhelmed with something, that’s a variable essential, or that’s an upgraded item, you don’t need to be worrying about that. Focus on learning and executing and getting income into your business first. And then I’m going to add on a little category called support.
Danielle (15m 54s):
So this is what I always encourage clients to spend a little money on because it’s your business. You can design it however you want. And for my business and my clients, I want them all to feel good. So we support our business by investing in our growth and our happiness. This can look like candles. This can look like bath bombs. They can look like new planners, anything that helps you execute and feel good about working on your business. And one day you’re going to be a full-time entrepreneur, if you want to. Right? So we need to develop the habits, the rituals, that’s going to put you in the mindset of running your business.
Danielle (16m 34s):
Full-time. So if you look at this and you see that the essentials are just under $2,000, if you add on another $1000 you can have an online business. And that is exactly why I love working with new online entrepreneurs, because it’s truly just such low initial capital investment compared to other businesses. Like compared to we just started Anda and Annie and I split everything and it was still a higher investment. So with an online business and these online systems dedicate your time and money and energy first, so that you have the highest chance of being location independent and seeing income within your first year or even the first few months, if you worked hard at it, I hope this episode was helpful.
Danielle (17m 22s):
If you want to learn more about any of my other business building programs, check them out in the episode description or send me an email. If you’ve been wanting to start an online business, and you’re still looking for a sign, you’re stuck in paralysis by analysis, I’m giving you permission and I’m giving you a sign right now get started. And I promise you won’t regret it. We’re all going to be in the Facebook group. If you have any questions, if you need any advice. And I look forward to seeing you in the next episode, have an amazing week guys.
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