Study: Entrepreneurs can save big money with broadband service

New businesses can save $16,000 in the first year by using Internet-based services instead of traditional ones, a study says

Solo entrepreneurs can save more than $16,000 in their first year by using broadband-based services such as printing and logo design instead of traditional vendors, according to a new study released Wednesday.

Business start-ups, by using broadband, can save more than $1,000 in travel costs through video conferencing, and they can save more than $6,100 a year by working from home with a broadband connection, instead of renting office space, according to the new study from the Internet Innovation Alliance and the Small Business and Entrepreneurship Council.

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Some of the cost savings may be obvious, but others detailed in the study may be less so, said representatives of the two groups. The cost of printing business cards, letterhead, brochures and other needed materials would be about $875 using a traditional printer, but only about $497 using an online printing service, said Ray Keating, chief economist for the SBE Council.

An online logo design service costs about $42, compared to $500 using a traditional designer, he added. The cost of a traditional telephone line for a year of service would be just under $700, while voice over IP service would cost $264, he said.

The study also calculates significant savings by using online accounting services and online website design and hosting. The study factors in $490 for the cost of a year of broadband service.

While many budget-conscious entrepreneurs may be aware of some savings they can achieve with broadband, it's important to publish real numbers to show the importance of broadband, Keating said during a news conference. The study should show prospective entrepreneurs that they can start businesses in a tough economy if they are smart about keeping costs down, he said.

"This is the type of analysis that can help them think, 'Maybe I can take a shot at this,'" Keating said.

The groups also aimed the study at U.S. lawmakers, added Karen Kerrigan, president and CEO of the SBE Council. Lawmakers need to think about ways to encourage broadband deployment and network improvements, as well as make more spectrum available for mobile broadband, she said.

"We need more spectrum and more investment," she said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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