Starting an online business is exciting! But before diving in, it’s crucial to know what costs you might run into. Whether you’re launching a blog, e-commerce store, or service platform, you need to have a solid understanding of your startup costs. This is where the online business startup budget in Excel comes in handy.
Budgeting is your first step toward turning dreams into profits. Today, we’ll break down how to estimate your online business startup costs using Excel. This tutorial uses real-world examples from my very own website, melcompton.com. By the end, you’ll understand how to build a budget template and what expenses to consider for your new venture.
Check out my YouTube video for a full walkthrough:
Why You Need a Budget
It’s easy to get carried away when launching an online business. You want everything to be perfect—which can lead to overspending on things you don’t need right away. Creating a solid online business startup budget in Excel helps you avoid that.
First and foremost, your budget doesn’t have to be exact. Unexpected costs happen. But aiming for an estimate helps you gauge what you’ll need to invest upfront. If nothing else, it helps you set financial goals for the future. Whether your total startup cost is $500 or $5,000, you’ll be able to plan each step wisely.
Let’s dive into the details of how I created a budget template for starting an online business, with the example budget for melcompton.ca.
Laying Out Your Budget
Let’s start by organizing your business expenses in Excel. Start by creating a simple layout, and list everything you could possibly need from day one. Separate the costs into categories for clarity. I suggest organizing into major sections:
- Website Costs
- Software and Tools
- Operating Expenses
- Hardware
- Advertising & Promotions
While the numbers might change based on personal choices, here’s a breakdown of some common expenses that most online businesses will face.
Website Costs
One of the first costs in our online business startup budget in Excel is a website is non-negotiable for any online business. You need a domain name and hosting to get started. Here’s a quick look at essential website-related expenses:
Domain and Hosting
Your website is your business’s home on the internet. I recommend Bluehost for hosting because it’s reliable and affordable. Typically, they provide your domain for free for the first year. Expect to pay around $300 for three years of hosting. After your first year, you’ll pay about $20 annually for renewing your domain.
Website Development
You have two options here—do it yourself or hire a developer. If you don’t have coding skills, consider using a theme like Newspaper 12. It’s user-friendly with drag-and-drop features and costs around $75. Hiring a developer costs more but may be worth it to save time if you’re not tech-savvy.
Essential Plugins
- WP Forms ($99/year): Helps you create contact and newsletter signup forms.
- WP SMTP ($49/year): Ensures your emails connect smoothly through your website contact forms.
Total cost for website setup is around $523 for basic services.
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Software and Tools
The next item in our online business startup budget in Excel is software expenses can add up, especially as your business grows. These tools help you run everything from email campaigns to social media marketing and blog management.
Mailchimp for Email Marketing
If you’re running email campaigns, Mailchimp is a great tool. It starts at $13 a month, but as your subscriber list grows, so could the cost. This is a necessary tool, especially if you’re running a blog or e-commerce shop.
Microsoft 365 or Google Workspace
You’ll need cloud storage and productivity software. Microsoft 365 costs around $12.50 a month, while Google Workspace is similarly priced. Pick the one that fits best with your workflow.
Canva for Graphics
If you create YouTube thumbnails, blog banners, or social media posts, you’re going to want Canva. It’s free to start, but the premium version costs about $120 annually, which is worth it for the time you save on design. Canva is indispensable if you need graphics fast.
RightBlogger (Optional AI Assistant)
AI tools are optional, but RightBlogger offers a suite of features like SEO research, social media tools, and content writing support. At $29.99/month, it’s a bit of an investment, but it’s perfect for beginners who need help with writing or SEO.
Adobe Photoshop (Optional)
If you need more advanced design capabilities, Photoshop costs $9.99 a month. Not everyone will need Adobe, but for perfectionists, it’s a great tool for complex designs.
TubeBuddy for YouTube SEO
Planning to start a YouTube channel? TubeBuddy helps with SEO optimizations for all your video content. It costs $145 annually and is a must-have for serious YouTubers.
Total cost for essential software and tools: about $450 per year, but it could be higher depending on what you need.
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Operating Expenses
Let’s not forget one of the biggest items in our online business startup budget in Excel and that is operating expenses for online businesses are usually lower than for traditional brick-and-mortar ones. However, there are still some basics you need to account for.
Physical Address or Mailbox
You’ll need a physical address for website registrations, email marketing platforms, and tax purposes. I use a UPS Store mailbox for about $350/year. This helps maintain privacy and separates personal details from business-related activities.
Business Licenses & Insurance (Optional)
If you plan to form an LLC, you may need additional liability insurance or a business license, depending on your state regulations. However, this expense typically kicks in at later stages of the business.
Total for operating expenses: around $350 annually.
Hardware
One of the most expensive items on our online business startup in Excel is hardware depends on what type of online business you run. Here are some standard items to consider:
- Computer (If you don’t already have one)
- Monitors (for multitasking)
- Keyboard and mouse
If you’re running a YouTube channel, you’ll also need:
- Headphones
- Microphone
- Video recording/editing setup
Set aside $1,000-$1,500 for hardware costs if you’re starting from scratch.
Advertising and Promotion
At some point, you’ll want to advertise, but don’t worry about this right away. When you’re ready, social platforms like Facebook, Instagram, or Twitter are great for targeted audiences.
Once you’ve found your flow, start setting aside a small budget. Prioritize SEO and organic growth in the beginning rather than burning money on ads.
Plan for $100-$200 per month if you start running ads within 6 months or a year.
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Starting Small + Final Thoughts
The total for starting an online business might seem overwhelming, but start small and work with what you have. My total startup budget for melcompton.ca landed around $3,400, but that will vary based on your situation.
The most important part is to set realistic financial goals. At first, aim to cover your startup costs. Look for smaller wins, like your first email subscriber or your first blog post. Once you find your rhythm, the bigger achievements will follow.
Create a structured plan, stay the course, and don’t compare your progress to overnight success stories. Take baby steps and watch your business grow over time.
Remember, this is your journey—no one else’s.
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