Last updated on February 23rd, 2022. Posted in The True Purpose Of Business.
Let's talk small business website costs. Specifically, how much cash you should keep on hand once everything's up and running. I call having money, time, and other resources on hand, ready to be deployed if needed, as my "War Chest." But how much money should you have on hand for your business website?
Here are links and resources mentioned in today's video. Enjoy!
Alright let's get into these "small business website costs"
Wikipedia: "A war chest is a metaphor for any collection of tools or money intended to be used in a challenging or dangerous situation. Historically, it referred to the chest located in the homes or barracks of soldiers, in which the soldier kept arms and armor. In the modern era, it more often refers to a collection of funds intended to allow a person or organization to get through a situation that requires much more readiness or money than usual."
Here are two examples of a huge war chests:
According to Forbes back in 2014, Apple reported in it's quarterly SEC filing that it had $158.8 billion in cash and cash equivalents.
That gives them plenty of breathing room for product mis-steps and magic pencils. And, it gives them room to research and develop new and innovative products.
Here's another example: Also according to Forbes in 2015, Microsoft had some $92 billion banked cash.
Again, This again gives them a huge safety cushion to work on new products, develop and research new ideas and concepts, and so on.
But you and I aren't Apple or Microsoft, right? So let's scale things back down to earth for a moment.
Once your business website's up and running, how big should your war chest be?
How much dry powder should you have on hand? How much time, money, and other resources should you set aside to keep your business running?
Well no matter what kind of product or service you sell, you'll have ongoing website costs, right?
So typically, you'll need to continue paying for web hosting, renewing your domain name, paying for your business email, and if you're accepting customer payments online, then you'll need to continue paying for your payment processor.
How much does all this stuff cost? Well, depending on how you're set up, web hosting will cost you around $100-ish a year...your domain name renewal will be around $10-$20 a year, and your business email might cost you around $120 per year.
Again, it all depends on how you've set yourself up...but you can use these numbers as a rough guide.
As far as being able to accept payments online, that continued cost is around $400 per year.
So added all up, all of these ongoing expenses come to $520 per year or about $43 per month.
But there are some additional ongoing expenses you'll have that we haven't addressed yet.
First, there's the issue of ongoing website maintenance. You'll always have things you want to change on your website...adding new products, adjusting prices, and so on.
Now I really urge you to learn how to build and run your website yourself. The good news is, building websites isn't difficult at all and modern web tools are very easy and intuitive.
So if you're doing it yourself, the only cost here is your time.
Another ongoing cost is your businesses marketing and advertising expenses. For instance, you might be using paid advertising to promote your business online.
If that's the case, you'll already know what your costs are here. Or, there's another approach that I use and recommend...
...and that is, to use email marketing in your business. So here, you'd have a mailing list for your business, where you'd send out frequent emails to your subscribers.
In terms of costs, this can be anywhere from free to around $100 per month.
One other issue -- a big one -- comes to mind: And that is, the day-to-day running of your business.
So in other words, the time it takes your business every day -- keeping the lights on, obtaining product (and possibly sorting and storing it)...
...handling orders that come in, customer service requests, handling returns, and all the other fiddly things that come with running a business.
This is easily where you'll spend the vast majority of your time. But that said, a lot of these sorts of tasks can either be automated or even outsourced if need be.
So How Big Should Your War Chest Be? It's difficult for me to throw out numbers because I don't know your business. But having gone over everything we've discussed here, you should have a pretty good idea of what you'll need in terms of time, money, and other resources on a weekly and/or monthly basis.