Do You Need To Spend Money On Your Online Business Before You Can Make It?

The question I want to ask today is, “Do you have to spend money before you make it?” So, it’s a simple question and I…

The question I want to ask today is, “Do you have to spend money before you make it?”

So, it’s a simple question and I think it’s one that we need to address because a lot of people spend a lot of time in a constant hunt for free things. And, even though people will recommend solutions that are good, they will usually not sign up for them because it costs money.

The idea here is that, if you’re not making any money – you don’t want to spend it. I can definitely understand the desire to do that but at the same time, it can really, really hamper your growth when it comes to your online business if you’re not willing to spend any money on it.

There’s not really a business out there – anywhere – that started making money without some form of initial investment. You have to keep that in mind. And don’t necessarily expect an internet business to operate by different rules. Again, as I’ve always said, a business on the internet is a business. It’s just a business – that’s all it is, it just happens to be online.

The entire idea here is that you’re going to make  money with this and you’re growing an asset. Now, if you’re not looking at it from that perspective, it is just going to seem like you’re just spending money. But, realize that you’re creating an ASSET here. And the viewpoint should be completely different. You should be looking at it as an investment.

What Do You Really Need?

Now, let’s look at what you actually need to get going, here.

WEB HOSTING

Obviously you’re going to need some form of web hosting and you’re going to have to pay for that. Generally, web hosting is not very expensive. If you’ve got a really busy website, well, you probably already have some form of business going on, anyway. So you can probably afford dedicated hosting. But if you’re first starting out, just get a simple shared hosting plan with Hostgator or Bluehost or somebody like that. They will completely serve your needs. Generally it’s going to cost $10 a month or less. And I think most of us here can probably afford that. You’re going to need hosting. And if there’s somebody out there that offers free hosting… RUN!!! You don’t want to start a business on any kind of free hosting.

Now, the next thing you need is an email list. And this is definitely not something you want to skimp on.

EMAIL LIST

Do not go on something like Feedburner to build up your list. First of all, we know that Feedburner might be disappearing at some point soon. Google seems to have a death wish for Feedburner so it’s just definitely not a secure place to put a list in the first place.

I highly recommend Aweber, as you guys know. Aweber is a really, really good email marketing company. They have a 30 day trial for free… or maybe it’s a dollar. After that it starts out at $19 a month and then it will go up from there depending on how many email subscribers you have.

The thing to keep in mind with Aweber is… yes, at the outset you will be spending more money than you’re probably making. However, you’ve probably heard this a million times from people who are making money online, but… your EMAIL LIST is THE most important asset that you have. It’s extremely important. So, if you leverage the list correctly, it would be easy to make back the money than you’re spending on Aweber. So, don’t worry about it. At the outset, yes, you’re going to be spending money on Aweber that you may not be making, but it’s an investment into later when you’re going to be making some money. Investment into Aweber is going to seem really small. You’re going to be very happy that you set up on the proper platform to begin with. It’s not fun moving email lists!

Now the other option here is, MailChimp. That’s definitely one that you can check out. I don’t like them as much as Aweber, but they are a good company. They do have a free level of account that can help you get started. So, that is one way where you can actually start setting up a proper email list and not spend any money on it right off the bat.

PLUG-INs

And then you’ve got the issue of plug-ins. Now in order to run a membership site you’re going to need a plug-in. In order to do various things out there, you’re going to need a plug-in. There’s a lot of free plug-ins out there but, generally, the ones that cost something are of higher quality and they’re more feature rich. They’re just better. So, again, you’re going to have to look at it on a case by case basis. Look at it as an investment. If you know that what you’re going to do with that plug-in is something that is going to help pay off later, then, yes… spend the money before you’re making it.

If it’s something that is just going to be for fun, that’s not going to add up much to your site and just kind of “cool” or something, then don’t buy it! Just wait. You don’t need to buy everything on the market!

What About Training Products?

Now, what about info products here? We’ve got the various solutions that you need to actually start up and run a business, but what about training products?

Well, the big thing here is make sure that you definitely DON’T fall for any shiny object. Marketers are good at making it seem like you need what they’re selling. And in many cases you don’t.

It really comes down to the fact that you need to be your own compass. It’s not that their product is good or bad; in most cases the product is probably fine. The big thing is you need to be your own compass. Know where you’re heading. And know if that product is going to address it to help you get to your goal faster. But if you are looking for something that will give you the goal in the first place or basically hand something to you on a golden platter, you’re going to be very sorry and disappointed here and you’re going to waste a lot of money.

So the big thing here with info products is – just don’t go out there willy-nilly and buy a bunch of info products. You want to be very strategic in the ones that you buy and that way you don’t waste money on it.

Now, can you find what you need for free? Possibly. However you’re going to probably find that going with a paid info product that’s strategically going to help you get to the exact thing that your INNER COMPASS says that you want to go do… it’s going to save you a lot of time; it’s going to save you a lot of needless leg work. So I think it generally is worth it. Look at it as an investment.

Now is some particular info product going to help you get there? I don’t really know. You have to be that judge. But the general thing that I want to say here…

Don’t pay for the WHAT but be willing to pay for the HOW.

You want to know how to get something but you don’t want a product to tell you what you need to do, in my opinion. I think you should have an INNER COMPASS as to which direction you want ahead.

Don’t come in there and say, “Hey… I just want to make money, please show me how to do it.” When you come in with that kind of an attitude, you’re setting yourself up for failure.

Avoid Going Into Debt For Any Of This

And lastly, I want to wrap up by saying, do not go into debt on any of this stuff. I have heard horror stories of people who had charged up expensive info products onto their credit card. JUST DON’T DO THAT! You’re coming at this from a completely wrong angle when you use your credit card.

Now, does that mean I’m saying don’t ever use your credit card? Obviously not. Because, when you’re on the internet, that’s pretty much the de facto way of buying things.

But if you’re not making enough money to pay for it and if you’re using that credit card as a buffer to buy something that you really can’t afford right now, I wouldn’t buy in that case. Because the thing is, if you’re trying to come in and form an internet business and you’re doing it with debt right off the get-go, you’re setting yourself off for a big problem.

Again, JUST DON’T DO THAT! Make sure that you only buy things you can afford. And when it comes to the things that you actually need to get off the ground, those things are usually pretty cheap, anyway.

Now, when it comes to the info products, sometimes it can be a lot more expensive. It really comes down to what you’re looking at and, again, you’ve got to be guided by your INNER COMPASS and, of course, your budget. If it’s going to take you multiple months to pay off the balance you just put on that credit card for some info product, do not buy it. It’s just not worth it.

So, hopefully that gives you my viewpoint on the whole idea of “do you need to spend money before you make it?”

I love to hear your point of view. Please post in your comments below and thank you very much!

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About David Risley
David Risley is the founder of the Blog Marketing Academy, a 20-year veteran blogger and online entrepreneur. His focus? Building a reliable, recurring business around his "lifestyle" and the lives of his students. He has this weird obsession with traveling in his motorhome around the country with his wife and 2 kids. David also likes to talk about himself in the third person. In bios like this one. Read his full story.
  • Jane says:

    Any business needs to have some sort of investment for the head start. And online business is no different. Although free is always tempting (free hosting, free training etc.) the more we try to save money with all these stuff, the more money and time we lose. That’s from my personal experience.

    So the moment one decides to start an online business, one should plan on how much investment (or monthly running cost) will be required for the same and save that chunk of money.

    And it is VERY important to hold that urge to spend on every plugin and every training course that is shiny. Unless and until the business makes income (a stable income, that is), it is wise to spend only on the minimal essentials!

    Good one Dave.

  • When I started building my online business I was on my own, beyond broke, in debt – with a son to take care of. I couldn’t have overspent on my business if I wanted to. I thought it was a handicap back then but I look back now and see it as the productivity boost it was.

    Not having a credit card to fall back on, I had to DO something instead of buying something. It took about four years but I got out of debt, quit my job and came home to run my business full time. Even since then I’m still an under-spender. I’m happy to spend money on tools and resources that I absolutely need – it’s just that I don’t need much!

  • Great advice Lawrence! I have struggled with the notion of ‘you have to spend money to make money’ for sometime now while getting my business off the ground. It’s easier said than done when your flat broke. I have made decisions on my business in purchasing products or services before where it sounded good but after more research I probably could’ve done it for free myself. From that point I’ve been more careful about what I invest my money on and continue to look at it as just that, an investment. If I have to choose between going out to eat or by an extra gadget that could very well increase revenue for my business, I choose the gadget. However like you said it’s all in the ‘how to’ and not the ‘what to do’. Sort of the give a man a fish versus teaching a man to fish philosophy. It certainly can go a long way. My current project is to help as many work at home moms as possible to be able to promote their online ventures so that they can continue to work from home. This has been a dream of mine for too long and it’s exhilarating to get closer to my grand opening!
    Thanks for the advice!

  • Hi David,

    A really great article!

    I guess that challenge is always the break-even point. Unfortunately (or fortunately), I’ve learned the hard way (wasting a lot of money).

    But, I do believe that I’ve learned valuable lessons from all that wastage.

    I like the ‘how to’ a lot because a lot of marketers hide behind the ‘what to’ as they continue to punt products where they are merely affiliates.

    Thanks for the lovely post

  • Shayna says:

    This was one of the biggest questions I struggled with when starting out at the beginning of this year. I have invested – but cautiously – about $2400 over 10 months. Nearly half that, unfortunately, was wasted on placing Facebook and Google ads going directly to my landing pages. Those ads did NOT result in any sales.

    The most fruitful investments for me have been:
    – Hosting with WPengine. I started on Bluehost, but my traffic got up to the point where I was experiencing major CPU throttling – think site load times of 10+ seconds
    – Premium thesis theme from Alex Mangini and logo from 99designs.

    I put both of these into practice around the same time, and my traffic jumped AND mailing list sign-up conversion rate doubled and stayed there – so both the increased speed and more professional “look” made a big difference.

    Now I’m back to investing in some ads, but driving people to my list optin + free gift and not straight to a product page. Pretty much all of my sales come from my list.

  • Hey David,

    I refused to spend any decent amounts of money as hard as I could when I was getting started and boy oh boy how much do I regret that right now.

    I did start with the domain name and hosting but took several months to finally get Aweber’s service.

    Then I spent a lot of months (again) to get a decent wordpress theme (1st one I bought was Thesis) and this held the same for all my resources.

    It probably was fear of failure, not going at it 100%, even though I really wanted to suceed online I’d still not invest what I needed so my take on this is don’t take any shortcuts.

    I think that you either have time, money or both (best position).

    Today I’m not out of debt (yet) but I do not hesitate whenever I identify something that is going to help me make progress to make more money online or in other words… I don’t waste my time trying to find shortcuts in order to save a few bucks.

    Sergio

  • David,

    Good morning.
    This is major, valuable advice for anyone launching a business on the Internet, or trying to grow her business on the Internet business.

    I loved the point about evaluating information products/services by whether the product teaches you the “HOW TO” rather than the “What to do.” A brief story…I read a number of very “helpful” comments posted on a very popular marketing forum. The postor desperately asked for help using a specific marketing software product. However, the comments were suggesting lists of “what to do” not “how to do it.”

    I offered to work together with the postor and show him “how to” do it. I met a super good guy, with a great story to tell, and with a tiny bit of “how to help” he was on his way.

    You are one of the best examples of a guy who gives your followers, and students the “how to” recipe. Thanks so much!

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