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 especially if you work out of your home and don't particularly want the whole internet to know where you live.

* Hosting. There is a wide range of hosting packages out there. It can range as little as $5 a month to hundreds of dollars a month for dedicated hosting. Unless you've got a giant venture capital business, stick to the low cost range. As your business and traffic grows you can upgrade your hosting. You may want to plan ahead and find a good host that offers you both low-cost hosting options and dedicated hosting packages.

* Site Design. The most important thing about design is functionality. You don't need flash for a great site. You just need a site that looks professional and gets your visitor from point A to point B. Many web hosting companies offer professional looking templates you can use for no additional charge. wordpress.org (different from wordpress.com) also has some very attractive templates that allow for multiple pages (not just a blog), for your website. You can use templates and more basic banners you design yourself (graphic design skills for banners are a plus here), or you can spend several hundred to a few thousand dollars on site design. One benefit of using a template or handling your own site design is that it tends to be easier to update your site if you understand it's layout.

* Shopping Carts. There is a wide range of prices here as well. If you're just starting out and have a small business you might try something like ejunkie.com to meet your needs which starts at around $5 a month. If you need something much more in-depth, you may need to look into something like InfusionSoft which can run you several hundred dollars a month.

* Content. This can range from free (if you write the content yourself) to several thousand dollars for a good copywriter.

So the question of: Is a free website practical, is a little misleading, because the cost of a website isn't just in the hosting. It's in several things. There may be some instances where a free website would be practical if you can pay a little extra to use your own domain name instead of the assigned subdomain. But even then, I'd use it only as a temporary solution. Some people buy a domain name and then redirect it to a free site. This looks incredibly unprofessional and will likely result in lost business. You can get up and running very inexpensively, but free just doesn't pay here.

Also keep in mind, the more you know about web design, using templates, shopping carts, and writing content, the less money you have to spend out. If you know a lot, your only expenditures may be hosting, domain, and a shopping cart. To start out you could spend less than $25 a month, and branch out and build as you grow.

Learn more about this author, April Wilson.
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