The beauty of starting an online business is that you can set it up with a small budget. Perhaps that is the main reason why people scour the internet looking for a home based business to set them financially free. Of course, running a profitable internet business with a small budget can be performed if you know where to go.

There are a great number of "free" things available on the Internet, including various internet marketing programs and services which could help you grow your business. However there are some things you need to pay for.

First, you need to have a domain name as it will give you credibility. Domain names will enable you to create your own existence in the world of internet. Keep in mind that although you can get a free domain name from a free hosting company, certain search engines will not appreciate it. These days, a domain name can be registered with less than $10. Just pick the one that reflects your product or service.

Next, you need to set up a hosting account. It depends on what kind of website you intend to build. For a simple website which only consists of a few pages you could use a low cost web host that will only cost you a few bucks per month. These days, many hosting companies offer various features such as fantastico and multiple domain capabilities. You may have to pay more but if you need some extra help in building your first website you may consider to sign up with one of them.

Unless you want to build a blog that resides in a free blogging service, never use a free web host. Such a service usually lacks of quality. Moreover free hosting accounts usually will also put advertisements on your web pages which could easily distract your potential customers.

How about the template for your website? You can easily find free templates from numerous websites. Good web hosts normally have already provided professional templates for their customers. If you sign up with one of them you can pick their free templates without the expense of hiring a designer.

As previously mentioned there are a large number of free internet marketing tools available today. Usually they come with some limitations. For instance there are some autoresponder services that also provide free services. They make their money by placing a small advertisement in each message that you sends out.

Using free online marketing tools is acceptable in certain situations. In the case of free autoresponder, using it is better than not using an autoresponder at all. You can start out with a limited free version, and then upgrade to the paid version once you have a large number of subscribers.

As the owner of a business, you are the only one who can decide whether you need to pay for something to start and to grow your internet business. Some free programs or services will cost you in reliability or image. On the other hand there are programs and services that you can pay for less or even free of charge which will give you the same results. Just spend your money wisely in setting up your internet business.