SEO

Crushing Barriers to Launching an SEO Firm — Part 4: Finances

Unlike the significant capital required to start up most businesses, opening up an SEO company requires very little upfront expense.

shutterstock 26293660 150x150 Crushing Barriers to Launching an SEO Firm    Part 4: FinancesYou’ll need to pay state incorporation fees, and you’ll probably need to enlist the help of an accountant to get started. You’ll need to purchase a domain and web hosting, and if you can’t make a decent enough website yourself, you’ll need to pay a designer to help you out. (Go deeper on the build-or-buy decision for a website.)

You probably already have a laptop or reliable access to a computer and the Internet if you’re considering starting an SEO firm, but if not, computers are as cheap as $300 nowadays, and most coffee shops offer free Internet access. There may be a couple of miscellaneous expenses like business cards, printing up promotional material, and the occasional office supply, but these might total to just a few hundred dollars.

That’s it — the bare basics. Lush office spaces, fancy computers, and all of the other non-essentials can wait. When there is a will, there is a way, and start-up companies have definitely bootstrapped it with less.

The Main Tools You’ll Need

If you’re working with a minimal budget, your main tools are inbound marketing tactics: SEO, e-mail marketing, social networking, word of mouth, Q&A sites, content syndication, social bookmarking, link referrals, forums, video, blogging, and news/media.

Notice a trend? All of these tactics are free, and they can all be incredibly powerful with the right approach.

Tiny Early Costs

My first-year expenses were pretty minimal:

  • Incorporation fees, accountant costs: $500
  • Domain: $12
  • Hosting plan: $150
  • Website: $0
  • Computer: $0
  • Internet access: $0
  • Business cards: $75
  • Miscellaneous supplies: $100
  • SEOmoz pro membership: $948 ($79/month)
  • Basecamp basic membership: $288 ($24/month)
  • Total: $2,073

My annual expenses totaled just over $2,000 — incredibly low by anybody’s standards. I saved a ton of money by having the skills to make my own website, and by having an existing computer and access to the Internet.

Additionally, I didn’t spend a single dollar on marketing. I used inbound marketing techniques to acquire clients, and this allowed me to remain competitive without a big time advertising budget. These costs could have easily been thousands of dollars more.

Half of My Expenses Were for Apps

Interestingly, over half of my expenses were spent on web apps –- SEOmoz Pro and Basecamp. Instead of investing in a sweet office or a 27-inch iMac, I opted to invest in technology that could really offer me a return on my investment.

I don’t regret these purchases at all. SEOmoz has been an absolute crutch in keeping my client’s campaigns organized, and I use their tool set on a daily basis. Basecamp has helped me stay organized with my clients, their employees, and third-party contractors. It has also helped internally to streamline my workflow.

The main takeaways here?

  • With the right skill set, you can really keep costs down. Bootstrapping is your friend, especially when you’re just starting out.
  • Don’t be afraid to spend money. If there is a service, web app, program, or tool set that is going to make your life easier, go for it. Technology is one of the best things you can invest in, and if you choose the right products, they will pay dividends.

Read about monetizing efforts behind the startup JoeShopper.com.

This post is part of a series that analyzes those barriers to entry for starting an SEO consulting firm. Check out the other posts in this series:
• Introduction
• Opportunity
• Experience
• Strategy
• Personality

 Crushing Barriers to Launching an SEO Firm    Part 4: Finances
Anthony Mangia is the CEO of Mangia Marketing, a boutique digital marketing firm based in Downtown New York City that specializes in SEO, paid search, and social media for companies of all sizes. You can follow him on Twitter at @Aignam.
 Crushing Barriers to Launching an SEO Firm    Part 4: Finances

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