Can I Start a Home Based Business Online with No Money?

The answer is Yes - and No! You can do it, but I wouldn't advise you to. Let me draw you an offline comparison. You want to start a window cleaning round with no money. You borrow a ladder and find an old bucket and a rag in the garage, and you're off in business. But very quickly you find that the ladder isn't long enough, the bucket leaks and the rag does't clean the windows like a leather would. You spend hours walking your round because you don't want to buy fuel for your car, and nobody takes you on because you don't look like you can do the job. What is more, you are spending so much time knocking on doors looking for business that you don't have time to clean many windows anyway. See what I'm getting at?

Would you have been better off investing a little money on the right equipment, budgeting for fuel and having a few nice leaflets printed and delivered? Of course you would. And it's the same with an online business or any home based business. Notice that I use the word 'invest', not 'spend'. Business is about investing money to make more - hopefully much more. It's about calculating, or estimating, how investing money in different ways will affect your business. And ultimately, it's about figuring what return you will get on the money and time you invest.

The temptation with your own home based business, but particularly online, is to always try to do things for nothing. I'm not against free stuff, some of it is great and I'll talk more about it below, but if you never invest money, your business will look cheap, it will be inefficient and it will grow much more slowly. Those things directly affect the main areas of your business: your reputation and image; your return on time and money invested; your business growth, which is particularly vital in the early stages of your business.

That established, what should you be investing in your own home based business? The actual amount will vary of course depending on what you are trying to achieve. A part-time home based business will have more modest ambitions, at least initially, than a group of experienced businessmen launching what they believe is a world-beating idea; and the budgets will reflect that. I would suggest you need a few hundred pounds (or dollars or your equivalent) as a minimum. You may not need it all on day one, and you should distinguish between start-up and working capital costs. And you must have a business plan, something that online business people in particular tend to miss out. Elsewhere on this blog you will find information on business plans.

So what can you get online for free?

By that I mean stuff that is worth having.

Free introductory periods. Many software products come with a month or so free introductory period, after which you have to pay to continue using them. The products include web builders, auto-responders, bulk emailers and so on. Most offer the full software facilities during this period. It's also a good method of trying before you buy.

Free introductory versions. For many software packages and web services you can sign up for free, with an option to upgrade to a paid package. These always have fewer facilities than the paid options. They may be good enough for you long-term in some cases, but for many you will quickly become frustrated at the reduced capabilities.

Search Engine Optimisation. Still the best way of getting yourself noticed online. You can do it all for free if you have the skills, and there is a lot of advice out there, not least from Google themselves - just have a look on google.com for 'business solutions'.

Writing. Write your own articles, blogs, web pages, whatever, and not only will you be saving money but also creating the unique content that the web loves and searchers are looking for.

Advertising. Some free advertising is not worth bothering with in my opinion. I would include free entries in ad directories, unless you have a business aimed at a local community that might actually go looking for you. Others are potentially useful, like InstantBuzz (find them under Links on this page). The two main questions to ask yourself are: will these ads reach my prospective customers, and, would I pay for this advertising if I had to? If the answer to both is yes, it's probably worth trying.

Social networking. Provided you follow the rules and the spirit of each site, networks like twitter, del.icio.us, flickr, youtube and so on can be a great way of spreading the news about your business.

Free web pages. You can write your own blog on blogger.com, your own 'lens' on squidoo.com or the equivalent on several other sites. These can be alternatives to having your own site, but are probably better seen as gateways (portals) to your main selling areas.

Free hosting. Some sites offer free hosting for your website, especially if you buy your domain name through them. Look out for the facilities you get, as they may quickly be outgrown by your site, or just not be good enough to begin with.

Free email contact lists. These should be double opt-in lists. The free versions often have restrictions on how often you can download. http://freeffas.com for example, allows you to download just once a month in the free version. These lists may not have members relevant to your own business.

What should you pay for?

Customer interface. By this I mean anything that your customers come into contact with: your site, blog, emails and so on. Unless you are confident that you have or can acquire the skills, get some to do it for you. Online work is usually inexpensive. See elance.com and guru.com

Advertising. You should have an marketing budget and paid advertising can be well worth while. Adwords is the product from Google ( google.com business solutions again). You can also find companies with full advertising campaigns to suit most budgets.

Things you are not good at. We all have different capabilities. Play to your strengths and spend most of your time on things you are good at and which contribute most to your business. Pay someone to do the rest.

Things that take a long time. Balance your time budget with your money budget. If the choice is between investing a small amount of money and investing a huge amount of effort, choose the cash option.

Invest wisely, both your time and your money, and you'll see a good return.