While running your own business from home may seem like a dream, it’s neither as cheap nor as easy as people may think. Because I’m a meticulous lover of spreadsheets and expense-tracking, I culled through all of our expenditures from the last calendar year and broke down what it costs to run a media business (or blog) for those of you looking to do the same.
Note: We run a two-person media production and marketing company with a few subcontractors that services DMOs of all sizes across the country, so if you’re simply looking at starting a blog, you can safely halve our overall expenses for the year to estimate what it will cost you to launch your own small business.
Unlike many of our friends who rent separate offices outside of the house at co-working spaces or share a larger building with other entrepreneurs, we don’t. Instead, we opted to upgrade our home to a 3,400-square-foot, four-bedroom house with two bedrooms that are adjoined by a bathroom that make for perfect offices for each of us. Had we still lived in an apartment in a big city, we’d likely pay anywhere from $50 a month each to $800 for a separate office. Since we do use our house as our office, we are able to write off 20 percent of the home—around $300 a month in our case—which is the maximum amount you can claim on your taxes, and bear in mind you do have to actively use the portion you write off for your office.
Power and utilities, write-off
Our power and utilities averages out to about $350 a month. Again, we can write off 20 percent of this on our annual taxes.
High-speed Internet, $70/month
We ditched cable years ago and only pay for Internet now. But we pay for the highest-speed, fiber-optic Internet at $70 a month (or $840 annually) because, well, we work in the digital media industry. And to date, we’ve had great experiences with our provider, only having two days of interrupted service in a whole year, which happened to everyone in our area, regardless of who they get their Internet through.
Looking for more advice for freelancers and small businesses on what you can and can’t write off? I wrote this handy tax guide just for you.
Web hosting, design + subcontractors
Once your website is designed and built—expect to pay anywhere from $7,000 to $15,000 for that, depending on the complexity of the site build and whether or not you already have photos and branding assets—you’ll want to keep your relationship with your development team alive should any problems arise. I could not speak more highly of Hannah and Lee of Furtherbound, who we’ve worked with for five years. Anytime we have a site error due to a WordPress or plugin update, need new designs for things like media kits or simply want routine maintenance, they handle it all, immediately. They’re amazing, have an excellent work ethic, and I hope that everyone has a duo as excellent as them to work with.
Web hosting, $1,300 annually
Our web host for C&C is WPEngine, and while yes, there are cheaper hosts out there—among them, Bluehost and HostGator; steer away from RackSpace, I’ll say out of personal experience—I’ve had such great customer service with WPEngine that I’d rather pay a premium than switch to a cheaper company I’ve yet to test out in person. Sometimes, it’s just worth it to pay more for guaranteed great service, you know? Note: You’ll pay for web hosting based on the traffic bracket you fall in, so it’s likely when just starting up a site, you’ll pay half of what I pay a month, if not even less.
Web maintenance, $2,500 annually
This varies by year, but on average we pay around $2,500 spread throughout the year for tweaks, new designs, and updates to our site and subsequent marketing materials.
URLs, $200 annually
Besides Camels & Chocolate, we own about a dozen URLs (like kristinluna.com, as well as future business ideas) that we renew annually at about $20 each per year via GoDaddy.
Hosting for other websites, $1,500 annually
We also have a handful of other active websites, like our Odinn Media site, our public art nonprofit and our media conference, on Squarespace and Wix. They’re substantially cheaper to run than C&C, which lives on WordPress, but still cost a bit of money to keep running. We also have a freelance designer out of Canada who helps us with any new designs we may need for our other businesses, the nonprofit in particular.
Social media managers, $4,800 annually ($400/month)
For the past three years, we’ve employed a couple different social media pros to help out with our Pinterest, Facebook and Twitter, which has freed up a lot of our time. This is definitely an expense worth making if you own a web-based business and have multiple clients and irons in the fire, but aren’t ready to hire additional full-time employees.
Equipment can vary year to year—some years, we have to upgrade everything and some years only a few things—so I’ve averaged out what it costs annually to do this over time, rather than purchase a new, say, computer or camera each year.
iPhone, $1,104 annually
Both SVV and I are on the annual Apple upgrade program. I have the highest-end model ($56/month) with the most storage, while he’s still on an iPhone 7 with the least amount of storage ($36/month). I recommend this now that none of the cell providers have the “renew your contract, get a new phone for $100” deal they used to offer. I weighed the pros and cons of doing the monthly deal with Verizon vs. Apple, and the fact that I can trade in my phone for a new one every single year—and that it also comes with AppleCare—immediately sold me. Three years and three upgrades later, I’m still happy with this decision.
Though we don’t always have to get new computers, this last year has been a whammy with both of us needing to upgrade our iMacs (to the tune of about $6,000 total) and me buying a new MacBook Air (another cool $2,500) after the screen of my old Pro starting dying, pixel by pixel. Most years (or even every 18 months), I’d estimate we upgrade one computer and not three, which would average out to around $2,500, as we always opt for the fastest processor and highest amount of storage, because when we don’t, we inevitably end up having to upgrade it down the line.
Camera gear, $1,250 annually
It always makes me laugh when someone wants me to do a free photo shoot for them because it doesn’t cost me anything. That couldn’t be further from the truth! A camera’s shelf life is determined by shutter clicks—anywhere from 50,000 to 150,000, which happens a lot quicker than you’d think in a digital imagery world where we take multiple iterations of every scene—meaning the more I pull the trigger, the closer I am to having to replace parts or even the whole body. We have a total of four cameras in our arsenal, and while we probably only upgrade a body every second year (about $2,000 to $3,000 for the level of DSLR we use), we do occasionally add new lenses and routinely have to send our equipment into Canon for repairs and replacements. Here’s a look at our full camera kit. Plus, then you’ve got accessories—tripods, gear bags, monopods, gimbals, memory cards, spare batteries, etc.—and you can see that working in a photography profession is hardly easy on the wallet. This is a conservative estimate, saying we only spend about $1,250 a year on camera gear, as some years it can easily tally four times that amount depending on when our existing equipment fails and what upgrades need to be made.
Storage, $500 annually
A few years ago, we had an IT company build us a NAS server for $2,500 so that we could triple back-up all of our files. While that’s not an annual cost we incur, it was a big investment upfront, and given that we work on the road so often—and have taken to editing photo and video files from an SSD versus housed on my computer to keep from slowing it down—we’re constantly filling up external SSD drives and buy a few news ones a year just for insurance. This G-Technology 1TB G-DRIVE mobile SSD Durable Portable External Storage is my go-to, and while nearly $200, it isn’t cheap, it’s reliable and small and sleek, meaning it easily fits in the pocket of my laptop bag. There are also 500GB and 2TB models should you need less or more storage.
Audio gear, $1,000 annually
Last year, we invested about $2,500 in an audio rig for some big upcoming projects, and while this isn’t something we’ll have to pay for annually, it seems we’re often adding bidirectional mics, headphones and other recording equipment to our kit, so I’m just going to assume some kind of audio equipment will become part of our annual expenses.
Vehicles, write-off (mileage)
We each put upward of 20,000 miles on our personal vehicles a year, so that’s a lot of gas purchased, oil changes and other routine maintenance. Note: You can either write off gas and maintenance (oil, tires, etc.) or mileage, but not both. We opt for the mileage route, so the above is just what it costs us annually to maintain my Jeep and SVV’s Audi since we use both of them for work travel. We also pay for AAA service, as well as insurance, of course, all of which is lumped into our annual vehicle cost that we write off on our taxes.
Software, services + subscriptions
One of the biggest things that has eaten into our bank account over the past few years is every software company’s insistence on building a subscription model vs. paying outright for the software like we all could do once.
Business license, $250 annually
As an s-corp, we pay an annual fee to the city and state governments to be able to operate.
Accounting, $750 annually
We use QuickBooks, which was a one-time fee of $200—FYI, both SVV and my CPA sis recommend the desktop version and says “run, run far away from the web-based software,” so do with that what you will—to do all of our expenses and bookkeeping, plus pay Housholder Artman, PLLC, the accounting firm my granddad started in the 50’s, to do our taxes. We also pay our CFP to invest our 401K for us, but that’s a percentage of what’s in our fund, versus on outright monetary expense. If you have more cash flow to track to various vendors, I’d highly suggest hiring your CPA to also do your bookkeeping, which will start around $600 a month and is an expenditure worth making.
Phone service, $160/month
We have Verizon (I do not recommend) and have been on a family plan with my parents and sister for my entire life, so our slice of the pie equals out to about $80 each a month or $1,920 annually. When we go overseas, I pay the $10 daily fee to be able to use my phone abroad, but honestly it really only gives us enough data to use our maps for navigation. Other than that, it’s pretty useless, so I rely on hotel WiFi to do any heavy web-browsing or data transfers.
Mailchimp, $468 annually ($39/month)
We use Mailchimp to send out all blog posts in full, as well as newsletters to our other endeavors, like Media Grits. We pay by user, and right now are at the cusp of being bumped up to the next price category, which I believe is another $7 a month. If you didn’t know you could sign up for my new posts to hit your inbox, you can do so on our subscribe page.
Jetpack for WordPress, $99 annually
Back when Furtherbound redid our site five years ago, they installed this premium plugin by WordPress that does daily automated backups of my site, keeps a 30-day archive and performs other routine checks I need for my site health.
Tailwind, $120 annually
Pinterest is a significant driver of traffic to our site each month, with others Pinning our content, not to mention one of our social media managers actively maintaining my account there (we get around 1.5 million monthly views on Pinterest). So a few years back, she talked me into joining Tailwind for easier management on her end, and while I admittedly don’t use it much, I think it’s a very valuable tool for anyone who is actively using Pinterest to promote content, a service or a destination.
Microsoft Office 365, $218 annually
We each pay for our own subscription for this, so that equals out to $109 a year (including tax) times two. Of all software we use the most, it’s Word and Excel, so this is not an expense I mind paying at all. If you’re using the free Apple Pages, just man up already and pay for Office. Pages is such a pain, and even with all Apple products, we often can’t open documents sent to us that were created in Pages. It just looks unprofessional.
Adobe Creative Cloud, $1,272 annually
It irks me to no end that Adobe does not allow a small business like ours to share accounts. You can only be logged into two computers at once on an Adobe account, and as I’m always working simultaneously on my laptop and iMac, that means SVV has to pay for his own. So we’re now paying $53/month x 2 to use Adobe’s suite of products. Gulp. It’s hard on the wallet. I did just notice that you get a discount if you pre-pay for a year, something Adobe failed to mention when I upgraded my plan a few years ago, so thanks to this post, I’m now saving $20/month on what I’ve been paying.
Music services, $549 annually
I’ve gone back and forth with various royalty-free music services over the past few years for video-editing purposes, and while I like Soundstripe, my favorites that I’ve stuck to are Motion Array ($250/year or $30/monthly if you choose month-to-month) and Epidemic Sound ($299/year or $40/monthly if you choose month-to-month). If you have others you love, please drop them in the comments as I’m always looking for recommendations.
Sprout Social, $1,962 annually
Whenever there’s the ability to save money by paying annually, I do it if I know it’s an investment worth making. Though I’ve been using the free version of Hootsuite for years, I switched to Sprout Social just last month for its reporting features. Not sure if it’s worth it or not just yet, but I’ll reevaluate when my year membership lapses.
Keysearch, $135 annually
Keysearch is an SEO software that helps you find relevant search terms to attempt to rank for, and one I’m forever convincing myself I’m finally going to use, but have yet to really crack. Sometimes, I spend the time searching for keywords to rank for; others, I’m in a hurry and just gloss over it entirely.
AppleCare + computer maintenance, $250 annually
We have so many Apple products—two iPhones, two iPads, AirPods, an Apple Watch, six(!) active iMacs and MacBook laptops—so AppleCare is imperative for us. You always get 90 days of insurance included with any new product, but I definitely recommend purchasing the additional three-year coverage, which is typically $250, for any computer product. The few times AppleCare hasn’t covered an issue I’ve had, or I’ve needed to upgrade my storage for which it costs a lot to go through the Genius bar, I also have a third-party computer tech guy in Nashville who fixes any issues I have for a much better rate than Apple would (he’s swapped out my battery, my keyboard, upgraded my RAM and performed many other small tasks to my computers over the years).
Dropbox, $240 annually
This is the most beneficial expense we make each year, in my opinion. We each pay $120 a year for a Dropbox Plus account, which allows us 2TB of space and the ability to constantly collaborate on the same projects, while also sharing large and high-volume files with our clients. We upgraded to Dropbox Professional for a year, which gives you 3TB of space for $204 a year, but it was excessive for what we need, so we downgraded again. For bigger companies than ours, Dropbox Business ($240 annually, unlimited space) might be a good option. Personally, I hate when someone sends me a doc or folder via clunky, ol’ Google Drive instead of paying the minor fee to use Dropbox, which is so much more fluid and professional-looking in my mind. Dropbox is another that rewards you for paying annually with a lower price than the per-month rate.
Canva, $156 annually
You definitely can get away with simply using the Canva free subscription in any basic design work you’re doing, but if you want to use logos, customize sizing and use it for more advanced projects, you’ll want to upgrade to the paid version at $13 a month. I’ve done this on and off over the years, depending on if we’re designing signage for our nonprofit events or, in this case, our conference. Canva definitely beats learning Photoshop and Illustrator as it’s so user-friendly, not to mention much cheaper.
Google One, $20 annually
I use Google Suite for my various email accounts. I hardly ever delete work emails, as you never know when you might need to reference them later (or as in our case, need to bring them back up for, ahem, legal matters…). You only get 15GB of storage with the basic, free Gmail account, whereas Google One gives you 100GB of storage. I upgraded years ago and still am only at 40GB. It’s completely worth not having to constantly cull your inbox every time you near that limit.
Facebook ads, $1,000 annually
We don’t do a ton of Facebook ads, but when a client project isn’t getting the eyeballs we had hoped (because algorithms…), we will set up a targeted set and throw anywhere from $10 to $50 at the post depending on how well the initial ad performs.
U.S. copyrights, $275 annually
After the city of Manchester, Tennessee completely screwed us over by not paying us the $22,000 in work we performed for them and, in the process, violated copious copyrighted material of ours—images, words, videos, you name it—our lawyer suggested that going forward, we copyright everything. Given that we produce thousands of words and images a week, that would be excessive, but I do batch-register content from any of our bigger projects, which is $55 a batch.
LastPass, $40 annually
With all the identity theft plaguing the Internet, plus the amount of personal information we all share on the regular, I finally locked down all my online accounts, use strong passwords for everything, and keep it all in one place via LastPass, a recommendation by my sister-in-law.
News services, $334 annually
I finally canceled all 25(!) of my magazine subscriptions pairing them down to zero. In reality, most were just $12 to $18 a year, so it wasn’t a substantial expense, but I hated wasting paper and never reading half of them. Back when I was freelancing for dozens of publications a year, it was imperative I keep up with so many different magazines, but now, as my career grows in different directions, it’s just not necessary. Instead, I pay for the two local newspapers in our area ($69 a year each) and digital scrips to The Washington Post ($100 a year) and the New York Times ($96 a year). FYI, both newspapers have promotional rates for your first year of service.
Apps, $100 annually
There are several photo apps like Template and A Color Story that I either purchase, make in-app purchases or subscribe to. This isn’t a huge part of the budget as I mostly use my computer editing software for work projects, but probably averages out to about $100 a year. I did briefly pay to upgrade my free iCloud membership at $5 a month so I wasn’t constantly having to back up my phone to my computer, but I think Apple’s cloud is such a sham and never works right.
I admittedly don’t attend a lot of conferences unless I am speaking at or producing them, but I am a member of a few organizations, as well as pay for one-on-one coaching and courses as the needs arise.
Coaching, $2,000 annually
I have both a video editing coach, Eric Irvin, and a photography editing coach, Joe Hendricks, to whom I reach out when I’m having an issue or simply want a lesson on a new skillset. Investing in yourself and your continuing education is never a bad idea, and I highly recommend both of these professionals if you want one-on-one coaching via Skype. They were both my IRL friends first, who I talked into teaching me, and they now have robust coaching businesses.
Courses, $250 annually
I’m not a huge consumer of courses, but I do get sucked into doing a few annually—from SEO to affiliate marketing, photo editing to podcasting—when I see one that fills a hole in my skillset.
Industry memberships, $300
Right now, I’m a member of our local Chamber of Commerce, an organization that I love, and also SATW, one I haven’t gotten a lot of value out of and will likely let lapse if things don’t change soon.
So there you have it: The grand total of the expenses I outlined here that Odinn Media pays as a baseline to stay in business annually is $30,202. Does that surprise you? Did you think it would be more? Much less?
There are, I’m sure, plenty of other miscellaneous costs I’m missing; for example, I didn’t even factor in the flights, in-flight WiFi, airport expenditures, hotels and Airbnbs that we often pay for out of pocket when traveling to conferences or on-site client meetings. We also make a lot of annual charitable contributions, not to mention spend a good deal of money on our own nonprofit, DMA-events. Look, any business has overhead, I get it. And I’m not complaining; we chose this career, and I can’t imagine doing anything else. Being entrepreneurs just suits both of us as we’re creatives who are forever coming up with new ideas and are not afraid to test them out.
But next time you assume that because your freelance friend works from home, he/she has it good, is so much better off financially, yada yada yada, consider all of the above expenses, plus the fact that he/she is paying quarterly taxes (self-employment tax is no joke), health insurance for two—because we have a high deductible, our out-of-pocket doctors’ visits tallies thousands of dollars a year and doesn’t cover our derm, my annual well-women visits, my regular chiropractor and physical therapy appointments for lingering sports injuries, etc.—and, on top of all of that, paying credit card interest on client-driven expenses and setting aside money each month to invest in his/her own 401K. We try to contribute as much as we can to our SEP each year, and employ both a CFP (my cousin) and a CPA (my sister) to keep our finances in line and make sure we’re setting ourselves up for retirement, which is also why we’ve started investing in real estate and currently own multiple properties (a whole other set of costly expenses that’s a story for another time).
And while we have elected not to have ads on this site simply because we care about aesthetics and often are turned off by other websites that have too many flashing things diverting our eyeballs, now you see why so many bloggers use MediaVine, AdThrive and other ad networks to keep the lights on. (I do hope to one day get more into affiliate marketing, but again, lack of time has prohibited me from cracking that nut so far.)
This is also why you should never, ever, ever ask your writer/photographer/marketer friend to work for you for free. Because as you can see, it’s not actually “free” after all.
Running a web-based business isn’t cheap, no matter how you look at it, so use a blogger’s affiliate links when you can, click through to the site from his/her newsletter, and just be supportive and understanding that you are consuming a free product that takes time and money to produce. Capisce?
What questions do you have about the cost of running a media company, blog or other online business?
For more tips to running a blog or media business, check out these posts:
- Blogging Basics: Tools of the Trade
- Copyright, Blogging + Social Media: Photo Usage in the Digital Age
- Show Me the Money! How to Diversify Your Income as a Writer or Creative
- Influencers, Want to Be More Hirable? Take These Tips to Heart
This blog may contain affiliate links to products or services I purchased out of pocket.