Due to pandemic crises and digital developments, small to large-scale entrepreneurs have decided to flourish their store’s sales and improve their presence by going online. A plethora of stores has witnessed revenue growth during the early phase of business, however, as time passes by less than half only stay in the line. And, it all majorly happens due to a shortage of money.
So, does it mean that stores can’t manage their expenses, or do they lack knowledge about the money they would require to run a store- at least for a year?
In 2020, Shopify ran a survey in the US and found that the majority of the owners were unaware or have miscalculated the amount they would require to run an online store.
So, today we’re going to find out what does it really cost to start a business.
How much does it cost to start an online store?
Well, the right answer to the above question ranges from one store to another as all stores are different in their products, employees, customers, niche, etc.
However, it’s noticed that a Shopify merchant would require to spend around $1,000 to $1,00,000 in the first year of business.
But this doesn’t mean that you would require to keep all the amount in cash before starting your store. Your recurring earnings can also be added to your revenue to bear the business expenses.
The above-said cost is based on several parameters and covers various aspects, given as below:
Operations- place to manage inventory, apps, software, legal fees, etc.
Marketing or Branding- logo, ads, packages, etc.
Product- inventory, manufacturing, supplies, etc.
Shipment and Delivery- packaging, labels, certificates, invoice, etc.
Store setup- website, hosting, domain,designer/developer cost, etc.
Employees- salaries, bonuses, awards, etc.
In the first year, most of the amount is spent on products and the least cost is allocated to setting up a store.
But that totally depends on various factors like industry and business niche; whether you have a full-time, part-time, or a hobby venture; have fewer employees or more; you are dropping or using print-on-demand; etc.
Financial Sources to Start a Business
Though many Shopify merchants take their first step into the business by using their personal savings. However, there are still many who totally rely on their business sales to cover their first-year costs.
Here are the top financial sources to bear business costs for the first year:
- Personal savings
- Trade Credit
- Using business sales to cover expenditures
- Support from friends and family
Around 70% of merchants whether big or small use personal cost to start a business.
Plus, it’s important to note that the first year of business will be hectic as you would be suffering from losses due to fewer profits. So, make sure you have plenty of money to keep you safe from losses and continue your business journey.
In the first year of business, there will be little or no chances of profits so you must be mentally prepared to cope up with all situations. To tackle the situation effectively, you can prepare a comprehensive financial plan highlighting the amount you would require to bear the expenses and the places where you’re going to spend the amount.
Our Budget Recommendations
Before we present our recommendations on the cost to start a business, you must remember that starting a business is a marathon, not a sprint.
Though each business is different from one another, hence there’s no point in how much cost would be really required to start a business, but you must know how to spend your amount on different things.
Starting with the right platform
Though there are a plethora of platforms where you can set up an online store, Shopify is the most convenient and user-friendly eCommerce platform, to begin with. Whether you want to run a small scale business or large; whether you want a new domain or generate a new business name, Shopify got you all covered.
Using Shopify POS, merchants can even sell the products to the customers in person. This eCommerce platform is the No.1 choice of all kinds of sellers which is why hundreds and thousands of entrepreneurs in over 175 countries sell their products online on Shopify.
From themes selection to experts help, Shopify can help you in building and reaching your store to heights.
The platform comes with a 14-days free trial and here are its pricing details:
Hence, to have a basic Shopify store you would be required to spend $29 per month. Additional charges may apply.
Soaring it to new heights….
Once you have built up your store, and have added product images, it’s time to add some revenue-boosting apps. Perhaps, your store would require popups, trust badges, payment icons, email collection bars, chat buttons, countdown timers, etc. to grab visitors’ attention and give a smoother shopping experience.
Downloading all these apps is somehow mandatory but the cost related to all these is pretty high.
Let’s have a look at their pricing!
- Loox Photo reviews- $9.99/month
- Sales Pop‑ $29/month
- Pre‑Order Manager- $24.95/month
- WinAds: Facebook Pixels- $24.95/month
- Bold Quantity Breaks- $20/month
- Instant Search- $19.99/month
- Sales Box ‑ Shipping & Offers- $19/month
- Wheelio ‑ Gamified pop‑up- $14.92/month
- Ultimate Sticky Add to Cart- $9.99/month
- Email Collection Bar- $9.99/month
- Free Shipping Bar- $9.99/month
- Also Bought • Cross Sell- $9.99/month
- Countdown Timer Bar- $9.99/month
- BEST Currency Converter- $9.95/month
- Frequently Bought Together- $7.99/month
- Hurrify ‑ Countdown Timer- $6.99/month
- Tabs by Station- $6/month
- Chaty: All‑In‑One Chat Button- $5/month
Hence, you would require to invest around $250/month in using these apps in your store.
But, spending this much amount is pretty expensive especially when you have just started your online business and already have a huge list of expenses.
But we have a solution for you!
Instead of spending a huge amount on these apps which ultimately make your store speed slow, it’s better to have one single app named XOOT. It consists of 25+ apps that assist merchants to boost sales, improve conversions, reduce abandonment, build social proof, collect emails, and more.
Thinking of the cost? The apps are completely free for 3 months and only $10/month is chargeable on more than 50 monthly orders.
Plus, these apps are completely customizable with no coding skills required. And, you can get elegant designs, templates, and advanced options to target specific countries’ audiences. Even if you get stuck, XOOT’s support and articles will guide you through all the ways to install & customize.
Do you wish to install the app? Tap here and run your business for free!