With a tough economy and a tougher job market, “Start a business for only ______” (fill in the blank- $100, $1000, 3 cereal box tops, whatever) headlines abound, which is frankly, not that surprising. However, I do find them a bit dangerous.  Here’s why:

-The amount it costs you to “start” is a fraction of your concern: Starting a business for $100 doesn’t mean that it only costs you $100 to operate the business, grow the business or to fund your life expenses.   I have seen experts say that you can start a business with just some business cards.  Ok, true, but then what?  If you are serious about success, you need to give yourself the opportunity to succeed, which means that you have enough capital to take you through operating for a year and a half to two years and to also live on during that time period.

-Start-up dollars ignore opportunity cost: Sure, it may cost you $100 to start a business.  And a whole lot of time to make it successful.  There could be another option that is more lucrative, even though it costs more to start.  You need to evaluate if your time spent (and dollars spent) will produce a return that is worth it, or you may find out that you are making less than the minimum wage on an hourly basis.

-Path to a job, not a business: Businesses that have low start up costs are often service businesses, which not only require a lot of time, but are harder to scale up.   Be wary that you may be creating a job for yourself instead of a true business.  This may be ok for you, but make sure you are choosing it intentionally and not ending up like the millions of solopreneurs that are working more hours for the same or less pay than if they had a job working for someone else.

-$100 is $100 for everyone: If it is so easy to start, then anyone can do it, which means a lot of people will probably try to do it. More competition makes it harder for you to compete for your potential customers’ attention.

Resist the urge to get sucked in by a sexy or “easy money” headline.  Building a business is hard work.  If you are serious about being successful, make sure that you do:

-Set a plan and an intention: You can set any intention you want (from having a hobby that makes money to creating a bona fide business), just be clear about your goals upfront and create a plan to get there, evaluating the risks and rewards of the opportunity for you.

Focus on total costs and make sure that you can fund it long term: Make sure you aren’t one of the statistics that goes out of business for being undercapitalized.  Think about not only what it costs to start the business, but to maintain and nurture it, before you take the leap.

Want to evaluate the risks and rewards of starting a business and its true costs? Check out The Entrepreneur Equation.