I’m a little surprised every month at how much I have invested and continue to spend on elleSAT, so I wanted to document it. I hope this post might be useful to anyone considering starting their own business.
It costs me between $220-350/month to run the business when my annual expenses are included. I also spent at least $2,000 setting up my website, social media, etc. I don’t know how anyone starts a business with actual capital investments. I started tutoring on nights and weekends while I was still at Accenture, and I reinvested nearly 100% of my income from tutoring (first into a brand kit, then into a website and other marketing collateral before the big investment in an attorney). Bootstrapping went against pretty much every instinct I have. Even though I could see positive returns immediately from the investments I made, there was something unsettling about working so hard and not ever having my bank account balance go up.
Another thing I learned about running a business at this scale is how little you can actually make per hour even if you are charging your clients a lot of money. I spend a not insignificant amount of time each month creating marketing materials, engaging with customers (free consultations, etc), and conducting administrative and business development tasks. This experience will definitely inform how I price my professional services in the future.
The business is profitable, but would probably not be worth my time to operate if there were not other things that motivate me about it. This is in many ways a social enterprise business, and I feel real affinity and passion for my customers, who I think were underserved in the market by companies that I feel some antipathy towards. The business also creates flexible income opportunities for some very cool people. And, perhaps most important of all, having tutoring to fall back on gives me tremendous peace of mind and a sense of financial security.
This list does not include interest from the times I have carried a balance on a credit card. I’ve also spent a lot of money on my home office over many years and have not included those costs (or the cost of my tablet – I decided to buy one instead of a laptop so that I could draw for students).
Monthly costs:
Web hosting: $120
Associated subscriptions (Canva, e-commerce sites, Zoom, etc): $100
Bank fee: $15/month
Startup costs:
Website design: $850 (got really lucky with this)
Business incorporation: $269
Other marketing/business services: $400 (had someone set up forms and newsletters in SquareSpace along with a few Canva templates)
Legal fees: $2200 retainer (my attorney is very generous and has let me actually spend this on services instead of maintaining the full amount as a retainer with the firm)
Ads and stock photos: ~$500
Annual costs:
$79 filing fee with Illinois Secretary of State
Domain name registration fees
Other costs:
Swag: ~$250 (I bought my tutors and some clients masks. Also, a letterboard to make better Instagram posts. Next up: pencils!)