It Takes Money To Make Money, the Fallacy.
\I hear this statement all the time.
“It takes money to make money.”
It is probably the most rehashed statement I hear these days in the business world and to it has always been this way. I even see people making that statement when they don’t have money.
That creates doubt and often times is self serving as another excuse why you cannot succeed.
If you don’t have a substantial budget, that is fine. If you have a budget, it can be well served to create a very successful if done right, but by no means is it required.
The reason you don’t need money. The internet.
The Cost of Building a Business Has Changed.
Prior to the Internet that it cost a significant amount of money to start a business.
Sure, you could start a lemonade stand for under $50, but that’s what you ship your kids out to do on hot summer days. No reasonable adult is going to be out there selling lemonade. But prior to the Internet, if you didn't have $10,000's to budget on a business (or more), you were out of luck.
Before the Internet, the costs of creating and owning a business were incredible. The failure rates in business were incredibly high and that is part in parcel due to the expenses associated with starting an offline business.
Some data indicates that 95% of all offline businesses fail. There are many reasons for this, but one of the main ones is that they all have an operating budget and as soon as you run out of funds to operate an offline venture, your business is doomed.
Let's have a look at the real costs of owning some of the most common types of offline businesses.
Costs of a Conventional Offline Business
The conventional costs of starting a business haven't really changed over the past 14 years, the time in which I have been navigating the online world. If anything, starting an offline business has never been higher.
Let’s look at the real costs just to start an offline business...
As you can see, the range from $60,000 for a small coffee shop kiosk to $850,000 for a gym.
And this is just to get started. Not to mention monthly expenses. Food, gas, heat, hydro, equipment, maintenance, labour, phone, employees, internet...it goes on and on.
In most circumstances, starting an offline business requires you to go into major debt, max out all of your credit cards, borrowing money from friends and family, give up ownership in a percentage of all of your business and profits.
In addition, most start-ups require folks to go get a bank loan or have access to a good deal of financing to start your offline business ventures, whether that is a restaurant, a coffee shop or a barbershop.
So if you were to say "it takes money to make money" about an offline business, you are correct. Most of the time it is "borrowed money"!
Internet Has Minimized Start-up Costs. Drastically.
The thing is, the Internet has really flattened the playing field between those that have the MONEY to create a business and those that don't. Now everyone has adequate money to start a business, regardless of your situation.
Those with little money have the same opportunity as those with lots of money. Let's have a look at the average start-up costs for an online business.
As you can see, between website design, hosting and website security, education and mentoring you can expect on average of around of just $1,500 per month to start up and run a business (monthly). There are many services out there that charge this and in most cases, you have to join 5-10 services to manage your business.
It is definitely a lot more affordable to run an online business than it is offline. But there is a MUCH more affordable way to start a business online. One that removes the argument that it takes money to make money. Want to know what that is?
The REAL start up costs for a business at Wealthy Affiliate.
The total cost of starting a business online, growing and managing your business online within Wealthy Affiliate is $49 per month (or $359 per year). That includes everything and from this you can absolutely create and grow a business to any level of success online.
With 3.4 billion people online, an online business has WAY more potential than any offline, and much more expensive business could have.
The argument that "it takes money to make money" is now a complete fallacy. There you go, I said it.