How much does it cost to run an internet business if you are a publisher or a small business owner of an e-commerce website?
We made assumptions:
- Prices in Canadian Dollar CAD
- Minimum wage is $10 CAD
- We used prices from GoDaddy (not the cheapest) because they offer a wide range of services.
Recurring costs for running a web based business:
A) Domain, Hosting, Security ($17+$156+$80+$108) or $469/year
- Domain name – $17 CAD per year and I personally prefer to use google domains.
- Hosting – $13 CAD per month or $156 CAD per year
- SSL Secure Socket Lock to encrypt information your users will send for online payment. $80/year (optional)
- Dedicated IP address: Build your business on its unique IP address. $9 CAD/month (optional)
B) Plugins,Tools, and Software ( $89 + $300 + $175 + $900) $1464/year
- Yoast SEO WordPress plugin:$89/year (optional)
- Cloudflare CDN (Content Distribution Network) $25/ month (optional)
- Grammarly organize your internet business articles, plagiarism, check grammar $175/year (optional)
- Adobe Creative Cloud Subscription image creation, slides, video editing $75/mo (optional)
C) Hardware and Other Costs ($240 + $1,260) $1500/year
- Laptop – to run your online business, you need to have a decent laptop and they usually cost $1200 or so good enough to do video editing if needed. If you assume the lifespan of a laptop is 5 years and you depreciate the price over a 60 months it will work out $20/month or $240 a year.
- Another you will need Internet connection with good speed in Canada we have internet 150 speed for $105/mo or $1260 Cad a year. Yes, it’s costly!
D) Content creation and Social Media Interaction ( $2600+$3640+$3640) $9880
- Blog articles: Assume publishing two articles a week and the cost of one article $25 then the total cost for content per year $2600
- Dedicated time to answering posts one hour a day and assume min wage is $10/hour or total man hour cost $70 per week or $3640/year
- Social media content creation assume one hour will be spent everyday on social media, creating links to the blog posts and sharing short posts. $3640/year.
Fixed Costs for running an internet business.
E) Website Development and License for a wordpress theme($100+ $700) $800/year
- WP Theme assume $100 Cad at todays exchange rate buying $59 US theme from themforest.
- Developing a theme, updating and adding content if you consider work on SEO and not only developing time then assuming 60 hours of work will be required. Also, there will be additional work required to carry out updates and general maintenance say 10 hours for the whole year. So total hours needed for the year is 70 hours and at 10 min wage our costs is $700
Adding all costs together
Adding all costs together we have $14,113 per year to break even or $1176.08 Canadian Dollar a month. A blogger or a website internet business owner, will need to generate more than this amount to make a profit on his time investment.
Therefore, you need to generate more than $1176.08 CAD to break even.
Does your internet business need all those options?
First, a lot of you may say we need not pay for all those listed options, and we can cut our costs way down. I agree possible but alternative solutions still count as a cost even if you don’t pay for it in cash.
Example if you decide not to pay for the articles and you will write them yourself. While this may not take cash out of your pocket, it will save you according to item D content creation $2600, but it will still need you to do the work and put the time. Moreover, writing two columns a week will take atleast 5 hours if not more researching your topic, editing and presentational work. This five hours at min wage is equivalent to the $50 amount we assumed needed per week for creating content. Yes, hourly rates are different for each country, and it can be higher or lower than what we assumed here CAD 10/hour.
Other options for your internet business
Another you can say I know web development, and need not pay money for a developer to do the work for me. True but still it needs your time to create such a project from scratch the time about 60 hours to set up a well-built website. As a a result your labor hours is the same cost.
You will still need to put the time to do optimization, updating, and tweaking your site throughout the year., I have set a conservative number of 10 hours for the whole year.
Adobe products are way ahead of all competition, and it’s the preferred choice of many professionals for a reason. I think its essential to have in your arsenal if you want to be a professional publisher.
All the options are essential and necessary for any professional publisher or website owner thinking of generating income more than $1000/month from their internet business.
In conclusion, I can only assume that most content creators or publishers are doing what they do running an internet business, for the passion they hold for the subject discussed, and the money generated in the process is a bonus for doing something they love.
What are the expenses like for you?
Finally, you can find more similar articles at our Cashflow Section where we discuss the financial side of online businesses and how money flows in and out of a company.
You Might want to check out Website Flipping Case Study and What Other Entrepreneurs Are Doing.
Also, interesting read : What I Have Learnt From Going Through Tens of Website Flipping Case Studies.