the real cost of starting an online business in 2025

One of the most common questions I get is: how much does it cost to start an online business?

The honest answer has two parts: less money than most people think, and more time than most people expect.

Here's the full breakdown.

The Money Part: What You Actually Need to Spend

When I started, I was convinced I needed a significant upfront investment. Domain, hosting, WordPress plugins, paid themes, email marketing software, graphic design tools.

Here's what I actually needed for my first product launch: $0.

Let me break that down.

Platform for Selling: Free to Start

I use MadeThis to sell digital products. Free tier. No monthly fee, just a transaction cut when something sells. I didn't pay a monthly subscription until I was already generating consistent revenue.

Before I found MadeThis, I was on Gumroad, which also has a free start. The point: you can have a live product with checkout and delivery working for free.

Product Creation: Also Free

I wrote my first product in Google Docs. Exported to PDF. Free.

I created my first template in Notion. Free.

Google Slides, Canva's free tier, Google Sheets — these are all free tools that produce perfectly sellable digital products.

If you want to use AI to help write your product content (I do), ChatGPT's free tier is functional. The paid version ($20/month) is worth it once you're using it regularly, but not required at the start.

Website/Blog: Optional but Cheap

I didn't have a website for my first two months. I sold exclusively through direct links and community posts.

When I did start a blog to drive organic traffic, I used a free tier option to start. A basic domain costs about $12/year. A simple hosting setup runs $5–10/month.

This is optional infrastructure — valuable for long-term SEO, but not needed before your first sale.

Email Marketing: Start Free

I started with Mailchimp's free plan (up to 500 subscribers). There are several free tiers across different providers. Email marketing is essential as you scale, but free at the start.

Realistic First-Year Budget (Digital Products)

The ceiling for a lean digital product business setup is under $50/month, most of which is optional in the first 90 days.

The Time Part (Which Is the Real Cost)

This is where most people underestimate.

Starting an online business doesn't cost much money. But it does cost time — significant time, especially in the first few months.

Month 1: 10–15 hours to research your product, create it, set up your store, and do initial promotion. If you're also starting a blog, add another 5–10 hours.

Months 2–4: 5–10 hours per week if you're actively growing. This includes creating new content, responding to early customer questions, adding products, and building distribution.

Month 5+: If the model is working, this starts to drop. Income from existing products and content continues without the same hourly input.

The time investment is heaviest at the start and genuinely decreases over time as the business matures. But there's no honest version of this where you build meaningful passive income in 30 minutes a day from day one.

What "Low Cost" Doesn't Mean

Low startup cost doesn't mean:

• Fast results
• Guaranteed income
• A model that runs itself from week one

It means the financial barrier to starting is genuinely low. You're not betting your savings. You're not taking on debt. You're not paying for inventory.

The real investment is time and consistency. Those are free but not cheap.

Practical Takeaway

If you've been holding off on starting an online business because you thought you needed a significant budget — you don't. The tools exist, they're free or nearly free, and the platforms (like MadeThis) handle the infrastructure that used to cost real money to build.

What it costs is time, consistency, and a willingness to start before everything is perfect.

See how I set up my business at /copilot, or browse the products I sell at /products.