This is part 2 of a two-part series. You can read part 1 here. 

In this second part of the series, I’ll cover some example costs for software that can be used to run an online business.

Keep in mind that I’ll be showing examples for both the less expensive and more expensive paths, and that you can definitely start out with software in the less expensive category and later, after your business starts to grow, migrate to other more expensive software that will have more features to make running your business easier.

Let’s start off with some common, simple requirements for an online business and then I’ll add more feature requirements to this first example as I go.

Feature Requirement and Software Cost Examples

To begin, in these examples I’ll use WordPress as the foundation for one’s online presence, since it’s the website creation platform that I recommend for people building small online businesses.

WordPress itself is free, but you’ll need to pay for a good webhost account and domain name registration.

You can get a good webhost account at Bluehost or Hostgator for around $7/mo.

Domain name registration at a registrar like GoDaddy or domain.com will cost you about $20/year.

You’ll also need a WordPress theme, which you can usually pick up for around $25 to $35.

If you choose to use Gravity Forms to create a nice contact page form where people can send you a message right through your site, this plugin will cost you $39.

You don’t have to go this route, but it’s the best, easiest way to create forms on your site that people can fill out to send you messages, like the form you’ll need on your Contact page.

You may also want to buy some stock photos for your site, which are images you can use royalty free for a one time purchase. A typical amount for a good collection of stock images is around $30, though it can be easy to spend a lot more if you’re not careful. Good places to get stock photos are Depositphotos, Big Stock Photos, and iStockphotos.

You’ll also want to sign up for an Akismet account so you can use the Akismet plugin to block comment spam on your site. This service costs $5/mo for the business license.

Those things will give you a basic, but good looking, WordPress site with a great web form plugin for WordPress that you can use for your contact page, as well as for creating other kinds of forms to put on pages of your site.

Now, let’s say in this first example that beyond the WordPress website, I want to have an email list that I can build up by offering a free report on my homepage and I also want to be able to sell an ebook to prospects.

The least expensive way to accomplish the need for an email list and the ability to start building it up with a free offer is to use Mailchimp. They have a very generous free plan that allows you to use their service for free, with most of the features enabled, as long as the number of subscribers on your list is below 2000.

You can send up to 12,000 emails a month to your list with this free plan.

If your list grows to over 2000 people, or if you need to send more than 12,000 emails a month, they have graduated payment plan options, based on the size of your email list and how many emails you need to send per month.

These monthly payment plans range from $10 to $240 per month.

You can check out the pricing details here.

For this example, I’ll use the free plan.

The best, easiest way to sell an ebook and deliver it to your customers easily is to use a service called Ejunkie. It’s a service that allows you to upload a digital product (e.g., a pdf ebook, .mp3 audio file, or an .mp4 video file) to their servers and create a simple payment and delivery process for your products.

You can also use Ejunkie to sell physical products, but I won’t focus on that part of it in this example.

Ejunkie has a monthly payment scale that depends on both the number of products and the amount of storage space you need to use for those digital products.

The minimum monthly cost to use their service is $5 a month, and goes all the way up to $265 a month.

For this example, I’ll assume that my e-book is under 50 MB, which is the limit for the lowest level of their plans.

You’ll also need, at a minimum, a PayPal Standard account that’s a Premium account type. That type of Paypal account doesn’t have any monthly fees, but does take out per transaction fees (usually around 3% of the transaction.)

So, this is a very simple example of a small online business that has a WordPress website with basic functionality, the ability to create and grow an e-mail list and do e-mail marketing, and sell an e-book or other digital products like an MP3 audio file.

The totals of the above costs are below.

Example 1 Costs

Example 2

For the second example, let’s say that instead of selling an e-book, I want to sell access to an online home study program that has streaming videos, article content, and downloadable PDFs that are delivered within a password-protected members only area.

For this example, I’ll give both less expensive and more expensive options.

First, the less expensive option.

Again, using WordPress as the foundation for the online web presence, I’ll need all of the features I mentioned above, along with their expenses, except for Ejunkie, because in this example I won’t be selling an e-book.

I’ll also be using MailChimp in this example, because it’s the best way to get a great e-mail marketing platform for free when you’re getting started.

To accomplish the need of creating a protected members only area, for this example I’ll choose Digital Access Pass (DAP), which is, in my opinion, the best plug-in to use for WordPress to create a members area right on your WordPress site.

DAP has many features rolled into it, making it almost an all-in-one solution.

It gives you a shopping cart that allows people to sign up and pay on your site for something like an online program that you’re offering.

After paying, customers gain access to pages that you create on your WordPress site that contain the members only content, such as articles, streaming videos, downloadable PDFs, or audio files that can be listened to right on the site.

DAP costs a one-time fee of $167 for a one site license.

You can get away with using just a Paypal Standard account with a Premier account type, but you may want to consider getting a merchant account and payment gateway so you can offer an easier way for customers to pay with credit cards than is possible via the Paypal checkout process.

It won’t cost you anything to get a merchant account (aside from the time it takes to apply and get approved, which can take a week or two), but they will take out per transaction fees, and you’ll likely have some monthly fees for your payment gateway, which are typically $30 per month.

For this example, I’ll stick with using just Paypal.

If you would like to stream videos as part of the content for your online program that you’re selling access to, you can use YouTube to stream your videos for free, or if you want to use a video player with a few more options, you can use a service like Vimeo or Wistia.

For this example, I’ll use YouTube.

With a basic WordPress website and the ability to sell access to a paid members only area on your website for an online program that you create, the costs for the less expensive route to accomplish these things are below.

Example 2 Costs (Less Expensive Route)

A More Expensive Route

Now for an example of accomplishing the same thing using an all-in-one platform as the basis for the tech system.

In this example, I’ll show the costs of using Infusionsoft for customer relationship management (CRM), e-mail marketing, affiliate tracking, e-commerce, and part of the membership area access control.

Infusionsoft is a very powerful all-in-one platform, and is what I use as the basis of my own tech system.

Unfortunately, it comes with a pretty hefty required training fee of $2000 when you first sign up.

What you get when you pay for that training fee is a dedicated trainer at Infusionsoft who will work with you one-on-one for many sessions to help you get started with the process of learning how to use it.

However, that required training fee can be reduced if you purchase Infusionsoft through someone like me, who is a referral partner with Infusionsoft.

If you’re interested in signing up for Infusionsoft and would like to get a discount, contact me and let me know.

The monthly expense for the plan that most people need of Infusionsoft, which is the Plus plan, is $299 per month. Again, that can be discounted somewhat.

For this example, I’ll just use the straight, un-discounted rates.

In addition to Infusionsoft, which, as I mentioned, handles CRM, e-mail marketing, affiliate tracking, and e-commerce, you’ll need other software in addition to Infusionsoft if you want to create a protected members only area to deliver an online program you’d like to sell.

There are a couple different options for this. One is CustomerHub, which is a membership site platform owned by Infusionsoft, which means that it integrates tightly with Infusionsoft.

Customerhub also allows you to use their platform to stream videos and audio files without using a third-party service.

The plan that most people use for CustomerHub is the Plus plan, which costs $79 a month.

Using Infusionsoft and CustomerHub is a fine choice, and is actually the combination of software that my wife and I use for her business and online programs.

Another option for creating a members only area to deliver an online program using Infusionsoft as the basis for your tech system is to use Infusionsoft with Kajabi.

Kajabi is similar to CustomerHub but has quite a bit more features. Like CustomerHub, Kajabi also creates a members only area for you to deliver online programs that’s completely separate from your main website, which means that people will not be accessing your online programs on pages that are on your main website (this would be your WordPress site, if you’re using WordPress.)

Instead, they access a separate website that is hosted either by CustomerHub or by Kajabi on their servers. In other words, you’d have a separate site with a different domain name that looks a bit different from your main website.

To use the plan for Kajabi that includes a video and audio streaming service, it will cost $199/mo.

Keep in mind that you’ll also be getting another whole bunch of features with Kajabi that CustomerHub doesn’t have, which is a set of features that allows you to create sales and landing pages, or sales funnel pages for doing a product launch sequence.

A product launch sequence is where you create a series of free content posts that may or may not have videos in them, and the last post of the series is a sales letter or sales video for your product that gives details about your product or program and a way to purchase it.

I use Kajabi as the platform for the times when I open up my own program, called Web Tech Genius, for registration, except for the video streaming platform itself (I chose to use another video streaming service rather than use the Kajabi video streaming service. More on why I chose that path in a moment.)

I also use Kajabi to create the member’s portal for that program.

If you’d like to offer an easier way for your customers to pay by credit card than can be accomplished via the Paypal checkout process (which kind of hides the option to checkout with just a credit card and not a Paypal account), you’ll need to apply for a merchant account and get a payment gateway.

As I mentioned above, the merchant account won’t likely have any monthly fees associated with it, but per transaction fees will be taken out (though they will be less than Paypal fees in most cases.) Your payment gateway, such as Authorize.net, likely will some monthly fees. These can vary depending on which payment gateway you use and what features you sign up for, such as the ability to do automatic recurring billing.

A typical monthly fee for payment gateway services is around $30/mo.

For this example, I’ll use Kajabi in the estimated expenses below. 

Example 2 Costs (More Expensive Route)

Selling Physical Products

If you’re going to sell physical products that need to be shipped to customers, this introduces a whole new set of feature requirements, such as shipping calculations, taxes, drop ship fulfillment notifications, and inventory tracking.

Some of the software I mentioned already in this article can also be used to sell physical products, such as Ejunkie and Infusionsoft.

Other good options for selling physical products are Cart 66 and WooCommerce, which are both WordPress ecommerce solutions. (Cart 66 also allows you to sell digital, downloadable products.)

You can buy a single site license for Cart 66 for $89, and WooCommerce is free to download (but you’ll have to sign up for a WooTheme package to get support for WooCommerce.)

Other Expenses

Now, let’s say that in addition to creating an online program, either with the less expensive or more expensive routes I discussed above, I’d also like to offer one-on-one coaching. In this example, I’d like to provide a way for my clients to schedule themselves on my coaching calendar and to allow them to pay for the coaching sessions as well.

In the less expensive example above, if I wanted to provide an easy way for my clients to schedule themselves and pay for the sessions, I would choose to use a web app called Satori.

You can get started with a Satori plan for $15 a month.

In the example above that used Infusionsoft, I wouldn’t need to use Satori to handle the billing for client sessions because I could run the payments for sessions through Infusionsoft.

I could still use Satori without using the billing features, but since I don’t need to bill my clients using my scheduling app software, that opens up another option called Genbook, which does very similar things in terms of allowing self scheduling for sessions that Satori does.

You can’t process payments for sessions using Genbook though, but if you have a platform that already has e-commerce built into it, like Infusionsoft, you can use Genbook in combination with Infusionsoft to create self scheduling and billing for sessions.

You can get started with a Genbook plan for $20/mo.

You may also want to use a better video streaming service to cut down on video playback issues with any videos you use, such as marketing videos on your main website or videos that are part of an online program you offer.

I personally use Wistia for all my videos, including marketing videos, blog post videos, and the training videos in my program.

Wistia costs $99 per month for unlimited videos and 200 GB of bandwidth per month. (Bandwidth refers to how much data flows between the Wistia video servers and your customers. The more people that play your videos, the more bandwidth you’ll use.)

They have other plans with different rates, so if you’re interested in learning more, have a look here.

As I mentioned earlier, I use Kajabi for the member’s portal for this Tech Genius program.

Kajabi has the option to stream videos using their video player and the Amazon Content Delivery Network (which is a very robust network for delivering content like videos).

However, I use Wistia to stream my videos for the lessons for two reasons: 1) I find that Wistia plays videos better than the Kajabi video player, which means a better experience for members of my program and much less support time I have to spend for people having trouble playing videos. (I rarely get support requests from people having trouble playing Wistia videos), and 2) The video viewing analytics of Wistia are over-the-top amazing and useful.

With their video analytics data, I can see exactly where people stop watching videos, or which sections of videos people watch multiple times. That information is invaluable for marketing videos, but also helps me see where I might be able to create more clear instructions in my training videos.

Conclusion

As you can see, even with the few examples I gave in this article, there are many different paths you can take to accomplish different feature requirements.

Hopefully though, the examples I shared will give you a ballpark estimate of how much tech systems can cost, as well as giving you a head start on your research around which combination of software to take for your own business.

Let me know your thoughts in the comments below.

All the best,
Forest

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