Starting Your Own Business: Do You Have To Risk Your Life Savings?

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Most people think that starting their own business has to be an expensive endeavor. While it is true that many successful entrepreneurs self-fund their startups by racking up massive debt on their credit cards, it definitely does not have to be that way.

Thanks to the internet, starting your own online business is as inexpensive and risk free as ever. In fact, I highly recommend that you create a business that is well within your own means rather than risking your life savings all in one shot. If you can handle it, it’s best to start your own business while you have a steady job or an alternative source of income.


Photo By Rob Lee

I’ve received many questions regarding how much we spent starting our wedding linens business and I’d like to enumerate all of these costs below. As you’ll find out from reading this post, we risked next to nothing to start our online venture.

The monetary aspect of starting your own business does not have to be stressful at all depending on what market you choose to pursue.

Webhost – $7 A Month

You might think that an online store would require an extremely expensive hosting solution in order to process transactions quickly and reliably. The truth of the matter is that you aren’t going to have many customers early on anyways so you may as well start out cheap.

We chose because they offer an inexpensive hosting solution with tons of features already built in. Let’s face it, why pay hundreds of dollars for dedicated hosting when you are probably only going to be processing single digit customers a day in the beginning?

When business eventually picks up, you can easily move your store to a more expensive hosting solution later. Even if you are technically challenged, your hosting service will be happy to help you out for free.

Shopping Cart Software – Free

Most people are intimidated by the amount of web development required to start a website or online store. Well guess what? There are a ton of free options available to create a shopping cart for your website at no cost whatsoever. In fact, I can name several free shopping carts off the top of my head that power thousands of online stores across the globe.

If you are thinking about starting an online store, make sure you read my article on choosing the right shopping cart software. The bottom line is that you don’t need to be an expert programmer in order to implement a professional looking website.

Digital Camera – $200

You don’t need a fancy shmancy camera to take pictures of your products. While an SLR camera certainly helps, you can easily take great product pictures with just a pocket camera.

You can get away with an inexpensive camera because by the time your photo reaches the web, the resolution of your photos will be on the order of hundreds of thousands of pixels which any old cheap digital camera can handle.

The key to taking great pictures is to take them in a well lit room during the time of day when there is the most ambient light. If you only have time to take pictures at night, it is extremely easy to create your own lightbox for your products. Just do a google search for “do it yourself lightbox”.

If you’d like to learn more about how we take pictures for our online store, make sure you check out our articles on 5 Tips for Establishing an Efficient Picture Flow For Your Store and 4 Things to Avoid with the Product Pictures on Your Online Store.

Shipping Materials – Free

That’s right! Shipping boxes and materials are free. Most shipping carriers will provide you free shipping boxes and even tape for free just for using them as a carrier.

The United States Postal Service for example offers a wide variety of different shaped boxes for free as long as you ship using priority mail. It’s as simple as going on the USPS website and ordering them. There are no fees, no charges whatsoever. They don’t even charge you for shipping!

Computer – $100

If you are reading this article, you already have a computer. In fact, who doesn’t have a computer these days? The key to remember is that you don’t need a powerful computer in order to run a business unless what you are selling or creating is computationally intensive.

When we first started out, we were running the business on a cheap AMD Athlon Thunderbird based machine that I picked up second hand from Craigslist. It certainly doesn’t take a super computer to run Quickbooks or Excel. Even today, we still perform the bulk of our online store operations on this cheap computer.

Inventory – $322.90

You’re probably thinking that $322.90 doesn’t sound like enough money to stock an online store and you are correct. We didn’t fully stock our online store in the beginning. For one thing, my wife and I were somewhat skeptical that we were going to sell anything at all. We also weren’t sure which products would sell and which would not.

As a result, we stocked a wide variety of products but in extremely low quantities. All it really took was 2-3 orders of a single product and we would be sold out. Sound like a customer support disaster waiting to happen? I’d like to explain our mindset at the time.

For starters, we weren’t 100% sure that we could trust our vendors. This was our first order and we were somewhat skeptical that we’d receive the same quality product that we saw on the show floor.

Second of all, we wanted to play things extremely safe in case we didn’t sell anything at all. Worse case scenario, if a customer wanted a large quantity of a certain item, we could take a small loss and place an emergency order to our vendors and have it shipped express mail.

Placing a small initial order of a large variety of items also allowed us to test the market and give off the facade that we were a well stocked store.

Do You Have $629.90 to Spare?

If you don’t, then you might want save up some money before you begin. But seriously, 600 bucks is next to nothing for the opportunity to start your own business and make infinitely more. Bottom line, there doesn’t have to be any major monetary risks to starting your own venture. Getting over the mental aspects is hardest part.

Ready To Get Serious About Starting An Online Business?

If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

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42 thoughts on “Starting Your Own Business: Do You Have To Risk Your Life Savings?”

  1. What an excellent article on how to go about what you need to start a business. Thanks for sharing your journey with us!


    P.S. I gave this article a Stumble. :-)

    1. Hi Michele,

      Thanks for taking the time to read the article and thanks for your support!

  2. You’re welcome, Steve! I definitely agree with your last sentence, too – it’s getting over the mental aspect that is sooo hard, especially if the person doesn’t have a support system.

  3. Hi Steve,

    I absolutely agree. There is no reason to tak unnecessary risks! One of the great attractions of online is the incredibly low cost of entry and start-up. If you are selling stuff which others will drop ship you may not even need to carry inventory.

    1. Hi Evan,

      The only problem with low barriers to entry is that there will always be a ton of competition. Good thing is that 90% of these people will drop out within the first few months. Drop shipping is definitely a nice strategy if you can pull it off, but generally it is less profitable than if you stock your own stuff.

  4. Thank you for sharing this! Those numbers is about what I spent to start my business. It doesnt take a lot of money these days, just careful planning.

    1. Hi Carla,

      I just read your personal blog for the first time today. I hope every turns out okay and that you will still have time to pursue your small business.

  5. This is an article worth reading, thank you!

  6. Hey Steve, remember when I asked about starting your own e-commerce site on Twitter? This post (along with the link to your earlier post on picking the shopping cart software) was just what I needed to move on with my idea!

    Most importantly, I was curious to hear about how you started out with the inventory. Now I know the answer. Did you, btw, think about the opposite way to go of starting with only a few product but getting a bit more of each? Do you think that would ever make sense, or is it limiting the customers too much?

    Thanks for sharing! Really useful stuff!

    1. Hey Jarkko,

      I’m so glad that you found this article to be useful. In regards to your inventory question, I think it depends on what you are trying to sell. For us, our competitors all carried a wide selection so we felt that we needed to as well. In most cases, you are forced to carry large quantities of a single product because most distributors (at least in China) won’t sell to you unless you buy in large quantities. Fortunately, we found someone that was willing to let us “test the waters” albeit at increased prices.

      If you are selling something truly unique, then I don’t think it’s necessary to fill out your store but only you can be the judge of your target market.

  7. What an excellent article! I think you explained very well on each and every obstacle.

  8. rags says:

    br0 any suggestions for online business other than online store??
    it’ll be really helpful to me..

  9. HI,

    if you have willingness start towards goal, there can be hurdles on your front, we have to take the risk to jump, no worries if we fall, we can learn how to jump next time


  10. Hi,

    If its 110 Hurdles race, we know that there are hurdles we have to jump, taking risk and going towards the finishing point is you power, same apply in the business, if we have a goal, we have to reach the risk,


  11. Hi, I’ve been trying to find time to read as much as I can. Thank you for excellent articles. I just wish I could remember all of your great advice. At least I know where to find your articles. My problem is that sometimes my mind like a steel trap. nothing gets in and nothing gets out. I have a couple of websites up and running, which as I could only Google and get email a couple of months ago seems like a big deal. my earnings so far $2.68. Keeping my fingers crossed.

  12. Nico says:

    Hi, Steve.

    Thanks for the articles. They only give me hope and some ideas on starting an online biz. I’m still trying to learn how to build my own “Flash” website. Any ideas or tutorials on that ?

  13. Nina says:

    I read your building your website, but I really donot know whether it is easy to design it. I see there are web design company who does it for $600-$1000, do you think you can do it by yourself? have not see your online store yet, can you tell the web address? tahnks.

  14. If I were to do a re-over, I’d invest a bit of money to build an e-commerce site.

    Instead we decided to take a bank loan to buy an existing company 3 years ago. It’s been rough to say the least. I should have gone with my gut feeling and went online instead. I see many bricks and mortar businesses going Out-of-business on my street alone. It’s sad because I know these companies probably invested more than I did.

    Luckily I did have more internet marketing knowledge, and we are surviving the storm. E-commerce is picking up since we trashed the old site with a new one. And videos help to add personality to your business.

    Thanks for the post – more people should know. It will save them money and headaches.

  15. Hi Steve,

    I am SO glad I found your website and signed up! Loads of good information. I launched my business on November 27th, 2010 so I am still a NEWBIE :-D! Gotta lot to learn and I really appreciate the wealth of information you are making available.

    My Aha moment today after reading this article came when I read the “Shipping Materials – Free” section. WOW – I didn’t know that! Headed to the USPS website as soon as I finish here. I’ve been buying shipping materials at Wal-mart :-O!

    Anyway, Thanks again for what you are doing! Have a fantastic day!

    Much Love & Peace!

  16. There is always a model to kick start a business. This sharing shows the low cost of starting an online business. I think the most challenging part to start the online business, especially for those non-IT savvy is dealing with the application. Followed by the knowledge of driving traffic to our site. These 2 I think are the hardest parts. What do you think?

  17. This is a motivational article. Owning a business is not beyond anyone’s reach. You just need some vision and a business plan. To survive and thrive you obviously need more though.

  18. Starting your own online business might be infinitely cheaper than starting a bricks and mortar store but it is by no means easy. If you remember that upfront and do not treat it like a hobby and expect to work hard, you will do OK to excellent, it depends on how much work you will put in.

  19. I’ve been following your blogs for a while and I appreciate your honesty in your writings and helping others fulfill their dream of becoming a business owner. I’m posting anonymously because I’m still working 9-5 and I just started my own business providing translation and proofreading services.

    Thank You.

  20. Maur says:

    This article appears to leave out some of the expenses involved. In other posts you mention that meeting a vendor in person is crucial. Given that most product vendors will be overseas, that journey can be an expensive undertaking. Did you make this journey before you started working with your vendors and/or before getting your business going? What kinds of costs went into locating and securing your vendors above and beyond initial inventory costs?

    1. Hi Maur,

      Going to visit your vendors is not mandatory. In fact, I have colleagues who import from China and have still yet to meet their vendors. There were no real associated costs with locating overseas suppliers.

      1. Maur says:

        Thank you for your reply.

        What advice would you recommend for folks setting out on a search for vendors?

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  22. What a nice and motivating article. The possibilities really are endless when you have a desire to succeed and a well-thought-out plan.

  23. Maria M says:

    Steve thank you for sharing so much information. I got the sell permit, got the merchandise and I want to open an online store. The more I read it gets a bit more scared I’m aware in any business there is competition but there is always something about your own to make it succeeds. I’m ready to start I need guidance to open an online store. Would you really recommend to get an e-commerce website ??

  24. Hi,

    Thanks for the articles. I’m still trying to learn how to build my own eCommerce website. Any ideas or tutorials on that ?

  25. Thanks for sharing your info. This Post is priceless. I truly appreciate your efforts and I will be waiting for your further write ups thank you once again.

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