One of the questions most frequently asked of me is: “Do I need a lot of money to start and run a successful Internet information marketing business?”
In this article, I want to give you a definitive, to-the-penny answer to that question…something I don’t think you’ve gotten elsewhere.
I find the rule of start-up money is the same for Internet businesses as it is for many home-based businesses.
It’s the “Time and Money Factor” which dictates that you need either time or money to succeed.
If you have little money, then you must put a lot of your time into the start-up—”sweat equity” as it is known.
If you have little time, but plenty of cash in the bank, then you can pay others to do a lot of the work for you.
But you need to invest either time or money…either one will do.
You do not need both.
The corollary, however, is that it is extremely difficult to start a home business if you have no money and no spare time.
You need one or the other. There’s no way to get around that.
However, the one big advantage we have today is the Internet.
You can’t run an Internet marketing business with zero dollars. You need to buy domain names, pay for hosting, design web pages, and so on.
But thanks to the Internet, it is much easier—and far less expensive—to start a business than in the good old days.
It’s also far less risky.
At an AWAI Boot Camp, Gary Scott said “the Internet is very forgiving of mistakes”.
For instance, if an e-mail marketing campaign to your subscribers bombs, you don’t make much money that day.
But sending an e-mail, even to many thousands of subscribers, is relatively inexpensive, so you don’t lose too much money, either.
On the other hand, starting a business offline, especially with a physical product, can cost a small fortune, all of which is risk capital.
According to an article in the New York Post, Conde Naste was unsuccessful with a new business magazine called “Portfolio” which they had launched a few years ago.
Their total loss for 2 years of its operation: $120 million.
In my little Internet information marketing business, I never spend much more than $1,000 to develop and test a product.
Usually I spend considerably less: my first product, an e-book, cost me a total of $263 to launch.
Since most of us have grand plans, ambitious dreams, big ideas, but not all that much money, I suggest you start your Internet business with your own labor rather than begged or borrowed capital.
Especially at the beginning, you’ll work hard. But putting in so much time will give you an edge over your competitors, because most of them simply will not make the effort.
“If you work more hours than somebody else, during those hours you learn more about your craft,” wrote the late Randy Pausch in his book The Last Lecture (Hyperion, 2008, p. 156).
“That can make you more efficient, more able, even happier. Hard work is like compounded interest in the bank. The rewards build faster.”
Starting an Internet marketing business works like the compound interest Pausch describes.
It takes a lot of hard work to start and build a profitable online business…much more work than many “get rich quick on the Internet” promoters would lead you to believe.
But once you get going, Internet information marketing is a business that can generate a steady stream of significant passive income—without you putting in a lot of additional work: you create a product once, and then sell it again and again.
This is the great advantage of having a passive income vs. a service business such as freelance copywriting, coaching, consulting, speaking, dentistry, or dry cleaning.
In a service business, the start-up is simpler and easier: you just start advertising and make money servicing the clients who call you.
But service businesses generate mostly active income: you always have to keep working, at a high level of activity, to make a high level of income.
So starting a business that generates passive income, like Internet information marketing, pays bigger dividends down the line.
As I said, you can start your Internet information marketing with very little money, but not zero.
Exactly how much do you need, then?
I am comfortable saying that if you do most of the work yourself at the beginning, you can get started online with a budget of under $1,000.
Here was the budget for launching my first product on the Internet, an e-book titled “Write and Grow Rich”:
>> Writing the e-book: zero (I assembled it from previously published articles I had written).
>> Hiring graphic designer to put my Word file into a PDF format as an e-book: $75.
>> Registering domain name: $9.
>> Writing the landing page copy: zero (I wrote it myself).
>> Paying website company to design the landing page: $175 (I outsourced to an overseas firm).
>> Monthly shopping cart software subscription fee: $4 (they charge $49 to $99 a month depending on the version you select, but they offered a one month trial for only four bucks, and I started with that).
>> E-mail distribution: zero (I already paid Constant Contact a flat monthly fee for distributing the e-zine I send to my copywriting clients, and I never even came close to approaching the maximum number of e-mails I can send for this fee).
>> Total out-of-pocket cost excluding my own labor: $263.
>> Total revenues to date: $38,844.
Even with a budget of only a few hundred bucks, you should have enough to cover the small initial start-up costs, including hosting, domain name registration, design of landing page, creation of first information product (an audio or e-book), setting up a merchant account and shopping cart software fee (for your shopping cart, I recommend Web Marketing Magic).
The bottom line: if you have ambition, vision, and desire and are willing to work hard at it, at least in the beginning, you can start a successful Internet information marketing business for under $1,000.
Bob Bly is the author of “World’s Best Copywriting Secrets” and has written copy for more than 100 companies including IBM, Boardroom, Medical Economics and AT&T. He is the author of more than 75 books and a columnist for Target Marketing, Early To Rise and The Writer. McGraw-Hill calls him “America’s top copywriter”.