The Cost of Setting Up an Online Business

Billie Hillier

Updated on:

Business Startup Budget

Starting an online business may seem less capital-intensive compared to a brick-and-mortar store, but it comes with its own set of costs.

This article will walk you through the potential expenses you might encounter while setting up your online venture.

Keep in mind that these prices can fluctuate based on your business needs, the vendors you choose, and the scale of your operations.

Business Startup Budget

Business Startup Budget

Business Plan Development

Before diving into any startup venture, developing a solid business plan is essential. While you can draft a business plan yourself, hiring a professional consultant might cost between $1,500 to $5,000.

Learn more about Business Plans.

Website Design and Development

Creating a user-friendly, engaging website is a vital investment. Using website builders like Wix, Squarespace or Shopify can cost anywhere from $20 to $300 per month based on the plan you choose. If you choose to hire a professional developer, it could cost anywhere between $2,000 and $15,000 for a basic site, and significantly more for a custom-built e-commerce site.

Domain Name and Hosting

Registering a domain name usually costs between $10 and $50 per year, while web hosting can range from $3 to $50 per month, or more if you require dedicated hosting.

Learn more about Domain Names and Registration and Website Hosting.

eCommerce Platform

If you’re planning on selling goods or services directly from your site, you’ll need an eCommerce platform or shopping cart software. Many of these services have subscription fees that range from $30 to $300 per month.

Payment Gateway

A payment gateway is necessary for accepting payments online. Costs for these services can include set-up fees, monthly fees, transaction fees, and other charges. Common providers like PayPal or Stripe usually charge a fee of around 2.9% + 30¢ per transaction.

SSL Certificate

To ensure your website is secure for users, you’ll need an SSL certificate. The cost can range from $0 (some hosting companies provide it for free) to $200 per year.

Learn more about SSL Certificates.


If your business involves selling physical products, inventory will be one of your significant costs. These costs will vary widely based on the nature of your products.

Marketing and Advertising

Marketing costs can vary dramatically based on the techniques you choose. Search Engine Optimization (SEO) services might cost you anywhere between $500 to $5,000 per month, depending on the scope. Social media ads, PPC advertising, and email marketing tools will also add to your costs.

Setting up a business involves some legal paperwork. Depending on your location, registering your business can cost between $50 and $500. Moreover, you might want to trademark your business name or logo, which could cost $225 per class of goods/services.

Business Licenses and Permits

The cost of business licenses and permits will vary greatly depending on your location and the type of business you’re starting. It’s best to budget at least a few hundred dollars for these.

Read our article on Legal Considerations for Online Businesses

Accounting Software

Most businesses will need some sort of accounting software, like QuickBooks or Zoho Books. These generally cost anywhere from $10 to $50 per month.


Various types of insurance, like general liability insurance, may be necessary. Depending on your business type, these can cost from $500 to $2,000 per year.

WordPress Plugins

If you’re using WordPress as your CMS, you’ll likely want to use plugins to add functionality to your site. While many plugins are free, premium plugins can range in price from $15 to $200, depending on their functionality.

Virtual Assistants or Staff

Hiring employees or freelancers to help run your business can significantly increase your expenses. Hiring a virtual assistant, for instance, can range from $3 to $100 per hour depending on their location and level of expertise. Full-time employees, on the other hand, will have a substantially higher cost, not to mention potential benefits and payroll taxes.

Logo and Branding

Good branding is vital for any business. Hiring a professional graphic designer can cost anywhere from $200 to over $1000 for a logo. Comprehensive branding packages, which might include a logo, business cards, and letterhead design, can cost upwards of $2000.

Customer Service and Support Tools

Providing excellent customer service can be an important aspect of running an online business. This might involve purchasing customer service software or hiring customer service representatives. The software can range from $10 to $100 per month, while a customer service representative can cost anywhere from $1,500 to $3,000 per month, depending on location and expertise.

Professional Services

Apart from legal fees, you may need to hire other professionals like accountants, consultants, or IT specialists. The cost of these services can vary widely, so it’s crucial to budget for these expenses.

Ongoing Education and Training

In the ever-changing world of online business, continuous learning is key to stay competitive. You might invest in online courses, books, seminars, or conferences. These costs can range from $10 for an eBook to a few thousand dollars for a comprehensive training program or conference.

Office Supplies and Equipment

Even if you’re working from home, you might need a new computer, printer, or other office supplies. The cost of these items can quickly add up, so it’s important to account for them in your budget.

Shipping Costs

If you’re selling physical goods, you’ll need to consider shipping costs. These can vary depending on the size, weight, and destination of the items you’re shipping.


Depending on the nature of your business, the required equipment may vary. For most online businesses, at least some basic technological equipment is necessary. Here are some of the key equipment costs you might encounter:


Having a reliable computer is crucial for running an online business. A good computer can range from $500 to $2,000 or more, depending on your specific needs. If you need something portable, a laptop would be a better choice, though it might cost a bit more.


The type of software you need will depend on your business, but it could include everything from graphic design programs to project management tools. Software prices vary widely but can cost anywhere from $0 to several hundred dollars per license or subscription. For example, Adobe Creative Cloud, a popular suite of creative software, starts at around $60 per month.


While a digital business might not need a printer often, having one on hand for printing invoices, shipping labels, or other business-related documents can be useful. A good printer can range from $50 to $200, though industrial printers can cost significantly more.

Phone System

A dedicated business phone or VOIP system might also be necessary, especially if you have a team. Basic plans can start from around $10 per user per month.

Additional Equipment

For businesses that are creating content, other equipment might be necessary. Cameras, microphones, lighting equipment for photos or videos, or even podcasting equipment can range from a few hundred to a few thousand dollars.

To wrap it up, setting up an online business is not without its costs. The total can range anywhere from a few thousand to tens of thousands of dollars, depending on the complexity and scale of your venture.

But remember, a well-planned and efficiently executed investment in your business can pave the way for substantial returns in the future.

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