by April Wilson

Created on: November 08, 2009

When starting an online business, or any business on a shoestring, it's tempting to cut corners. One of the biggest errors in judgment people make when they start a business is spending too much money and losing track of their expenditures. I did this on my first business venture and ran out of working capital. So anytime you have the opportunity to save a little money and do something free, it's good to at least check into it.

But not everything free is practical. Having a free website has it's pluses and minuses. The major plus is that it's less money you're spending out of your working capital. But there are several drawbacks. The biggest drawback is that if you're trying to present a business face to the world and you don't have your own domain name, but a subdomain instead like: name-of-free-host.yoursite.com, you'll look unprofessional.

People are often leery about dealing with businesses on the internet they aren't familiar with. If you aren't Amazon, Yahoo, or Paypal, or another equally recognizable name, your first order of business online is to build trust and credibility with your potential customers. You aren't going to do that with a subdomain.

Another minus is that a free host often doesn't have as much bandwidth or storage space as you'll need. Though this is not always the case. Hosts like wordpress.com allow you to have unlimited traffic to your site without charging you extra for it. Though Wordpress is a blogging tool, many people use it as a website, since many of their templates allow you to add pages across the top menu bar.

Free hosts often put ads on your pages. This can be a severe drawback to your business as the ads could clutter your site and make you look less serious to prospective customers, or the ads could be totally unrelated to your business. Further, if you are planning on an online business where you employ the use of ads yourself, such as Google ads, a free host may not allow this.

There is a wide range between free and the thousands of dollars some people spend on a website. Just because a free website isn't very practical for a business, doesn't mean it has to cost you your first born child. Often people run to extremes, either trying to do something totally free, which ends up being both impractical and coming off unprofessional, or spending a lot of money they don't have to have "the best" website.

It helps to break down what your costs are:

* Domain registration and privatization. Privatization is optional but helpful

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