Financial Travel Tip #93: Overhead Costs for Location Independent Businesses

by Nora on August 17, 2013

At it’s core, a location independent business needs three components:

  1. Product or service
  2. Method to deliver the product or service
  3. Platform to get paid


Depending on your business choice (which varies in the location independent world), the overhead costs you need to set up and maintain this system can range from minimal to…more.


Overall, location independent businesses have less overhead costs than conventional businesses, due to two factors:

  • There are no physical office costs, nor commuting expenses
  • You have the freedom to manoeuvre yourself to live in a place and way that saves you money (I have proven a few  times over that the cost of living full-time on the road has consistently been sustainable given a varying location independent income.


Overhead Costs for Location Independent Businesses

Necessary Expenses

Most of these are fees – hidden or otherwise – that you’ll have to pay in order to run your location independent business.

Internet Time

Internet is the lifeblood of location independence, whether it’s internet cafes, free hotel wifi, or a subscription plan.

Computer & Equipment

These are capital costs, but ones that will also require upgrading and maintenance.

Website Domain

You’ll pay a one-time fee to buy your domain (under $100), plus a minimal annual fee to maintain it.

Website Hosting

Once you have your domain, you need a service to host your site. Annual fees vary depending on your site’s needs, but they start at less than $100/year.

HostGator Web Hosting

For both web domain and web hosting, I use HostGator, as I have from the start.

Note June 2017: I’ve recently switched my hosting service to Performance Foundry – which specializes in managed WordPress hosting. It comes with a much higher price tag, but it’s one of a few steps I’m taking to up my game. It’s secure, fast, and includes a boatload of services that take the work – and worry – out of the tech side of managing my site. I actually expect my traffic and search results to increase as a result. 


You’ve got to file your taxes (unless you’re structuring your business/residency to be a tax-free off-shore deal – in which case you’ll still need accountants and lawyers.) It’s a good idea to set aside a percentage of your income in an online savings account to cover anticipated tax needs.

Currency conversion charges

If you’re working from the road, you’re probably juggling different currencies; you might be paid in British Pounds, convert them to an American bank account, and then access/convert the money to pay your expenses in Thailand. Every time money is converted, you’re getting dinged for currency conversion charges, running up to 3%. They’re less painful because most often they’re hidden.

Payment platform fees (Paypal, bank transfers)

You need a way to get paid online, and Paypal is generally the platform of choice. Again the fees come off the top, and range from 3-5% of the amount you are paid. (They get you again with currency conversion charges when transferring money to your bank account).


Optional Expenses

You may or may not need to incorporate these overhead expenses into your location independent business:

Mailing List/Newsletter Service

If you have an e-course to offer, or are building a mailing list through subscription newsletters, you’ll have to use a service like Mail Chimp or Aweber (I use and endorse Aweber). Fees vary depending on the volume of mail you send and the number of subscribers you have.

Advertising/Acquiring Clients

There’s a cost to getting clients; and unless you’re building your clientele/following entirely organically (which is possible), you might have to pay for some exposure.

Merchant Platform Fees

If you have a product to sell to the public, then you need to establish a merchant platform for people to pay you. Paypal is popular, and E-Junkie is an example of a site that you can use to sell a digital product like an e-book. Monthly fees depend on the number of (digital) products you have to sell and how large they are.


Depending on how sophisticated your business and tax/residency situation is, you may wish to incorporate. There are hefty fees to establish a corporation, and some ongoing accounting and legal fees to maintain it.

Design & Development (initial and ongoing)

You may hire a designer to set up your website, design deliverables like e-books, or set up your sales pages and merchant platform. Although I initially designed my own site (in a haphazard fashion), I eventually started outsourcing this for a better return on investment.

Shipping (products, as well as supplies to wherever you are)

There are overhead costs with shipping a physical product, as well as with having supplies or products shipped to you – wherever in the world you may be.

Virtual Mailing Services

If you have no fixed address, you might subscribe to a virtual mailing service to give you an official address (for your taxes and driver’s license for example); they’ll scan your mail and email it to you, giving you the option to have them trash it, forward it, or hold it. (See Financial Travel Tip #109: Virtual Mailing Services)

Insurance (property/business)

Depending on your industry, you might need business (liability) insurance, and depending on your equipment, you might need property insurance.


Optional Cost/No Cost Expenses

These optional services can be acquired for a fee or for free, depending on your needs:

Communication (Phone/Video conferencing)

Depending on how creative you are (and how good your internet connection is), you can accomplish most of your communication needs for free. You may wish to pay extra for a phone number that is local for clients to call you on (with services like Skype and Google Voice), or for sophisticated video conferencing needs, etc.

Invoicing and Task Management Programs

If you’re managing a team, or have complicated invoicing needs, a task management and invoicing program may help. There are both free and paid versions.


You’ll want to back up your data, which can be done many different ways. If you have a lot of data to back up, or want to encrypt the backups, or if you need to purchase external hard drives, you’ll likely pay for it.

Photo Hosting

Photo-heavy sites often use photo-hosting services to relieve the burden on their site’s server, as well as to back up – and even have a platform to sell – photos. I use Zenfolio for backing up and hosting my photos (use the discount code K5N-RQA-X23 for 10% off).


If you’re using dodgy internet connections, have extra sensitive data, or want to access country-restricted websites, you’ll want to use an external VPN service such as TunnelBear or IP Vanish. I’ve used both and enjoyed them; the biggest difference between the two is that IP Vanish can accommodate Windows phones. Here’s some more information on VPN services in general.


What did I miss? What are your own location independent business overhead expenses?



{ 10 comments… read them below or add one }

1 Gigi August 17, 2013 at 12:36 pm

For me, there’s also networking events and conferences (I do try to network even though I’m traveling) (but perhaps that falls under your acquiring clients header).


2 theprofessionalhobo August 17, 2013 at 7:31 pm

Gigi –
Bingo! Although you could put networking and conferences under Acquiring Clients, it probably deserves a category all its own. Thanks!


3 Erin August 18, 2013 at 11:13 am

Great list!
The only thing I would add is IT fees. Maybe that falls under website maintenance, but I’ve had unexpected tech fees come up from time to time.


4 theprofessionalhobo August 19, 2013 at 7:40 am

Hi Erin,
The IT fees I’ve incurred are what I would have put under Possible Design Fees (which I’ve just renamed Design & Development Fees)!


5 Mark Mercer August 20, 2013 at 10:41 am

Great list Nora!

I’d add, as much as I hate to admit it’s still necessary, a fax-by-email/web service. Especially if you do any business in the USA. Despite the E-sign law dating back to the Clinton administration, and not requiring any particular type of “electronic signature”, many USA businesses are ridiculously outdated in their thinking. Some entire industries, such as real estate, are still back in that “it’s secure because it’s a piece of paper with ink on it” days.

I’ve tried a bunch, most of which were just re-brandings of, and alternate pricing strategies for, giant j2, as in Jfax, Efax, etc. , (or were acquired by them, like Comodo Internet Security’s once-great cheap-n-simple TrustFax).

For the past year or so, I’ve been on MetroFax, which is not any part of the jfax imperium. Cleaner, modern infrastructure, lots of options, and a great Android app that actually works for sending and receiving faxes. (not an affiliate link, I’m not an affiliate, and in fact their current affiliate program via CJ is inactive. Just a happy customer here in Uruguay with a fax number at “home” and in my “office” in Florida, USA!”

On VPN, I do think it’s for far more than “dogdy connections” and not just for those with “top secret” stuff. Firesheep and other easy-to-see add-ons show how much your passwords and private data are at risk at every internet cafe, WiFi-equipped hotel, airplane, bus, public park, to anyone on the same network. Encryption should be your default when you aren’t on your own secured home connection, and even then, probably, so that your browsing and email traffic is not “in the clear” to be logged at your ISP and available for browsing by the bored kid on the night-shift support desk.

Plus, the main reason expats and long-term travelers get a VPN, even though not the inherent purpose of VPN: Streaming movies, TV, news, sports, from legal services “back home” or somewhere else. Hulu, Netflix, CTV, CBC, BBC iPlayer, Amazon Prime video, Google Play video, with the correct selection of content for your “home” country.

We use a VPN service that allows unlimited switching between several dozen countries and multiple technologies at no charge. Also allows multiple users at the same location to connect simultaneously at no extra charge, even if one is on a Windows PC VPN’d to the UK to watch the latest Doctor Who Confidential on iPlayer, another is on a Linux PC to the USA to order a not-sold-in-Uruguay Nexus phone from the Google Play store, and somebody’s smartphone is connected to yet somewhere else. If we had a Mac or any iThings, we’d have native MacOS and iOS support and those could be happily simultaneously VPNing away too, to differing or same country endpoints, at zero extra charge.

Most of the other VPN services I’ve tried or considered, fail on one of those factors: limited free “endpoint country” switches, limited or no free multiple use, limited operating systems and technical coverage. They have upcharges for simultaneous use, or they give you “x number of free switches” per month, or have multi-month lock-in billing rather than monthly, or support only limited types of connection technology and platforms. Nothing wrong with Strong or HMA or Astrill or the other well-known players, but they all fall down on at least one of those critical-to-me requirements.

Overplay-dot-net, or with my easy-to-recall (yes-affiliate) link, For the “just-TV-streamers” they offer a non-encrypted “SmartDNS” product that is only $5 USD (4.95 to be decimal about it). Most people should probably get the $9.95 full product.


6 theprofessionalhobo August 20, 2013 at 12:09 pm

Hi Mark – Thanks for your input! I must admit, I’ve been lax on the VPN front, and I’ve only needed a fax service once (for which I borrowed a hotel’s fax number to receive and send).
But I think it’s worthwhile to look more into using a VPN more regularly – you don’t find that it affects your internet speed?


7 Mark Mercer August 20, 2013 at 11:31 pm

Nora, a VPN does lower the speed a little bit. But not substantially. Not a good one.

That said, I do sometimes have to try more than one of the endpoints in any given country. A particular node can be crowded or just not be ideal. But the encryption itself is not significant on any vaguely modern computer. As you no doubt know from travel life and previous more traditional professional job life, many companies routinely have people remoting in to work via VPNs. IPSec, or OpenVPN, or PPTP , all standard technologies just like the “https” in your browser on encrypted web connections. That overhead isn’t bad.

We have no problem streaming videos. But yeah, if you go to and compare your non-VPN to VPN, you will see at least a small drop. But is that significant? Usually not.


8 theprofessionalhobo August 21, 2013 at 9:50 am

Well, an insignificant drop in speed in exchange for internet security seems well worth some extra overhead expense. I must look into this more. Thanks!


9 Elena August 29, 2013 at 10:01 pm

Hi Nora,

Great post. I would suggest one more thing that I found extremely helpful: a proxy server. Some US Banks require their customers to notify them about traveling abroad. You have to let them know about when/for how long/where you are traveling. Otherwise, they may freeze your credit card or bank account if you access it from a location different than your usual pattern. This is a real headache. It becomes even worse if you have separate personal and business banking accounts. Using a proxy server to access business account on-line allows to “pretend” that you are in the US, so you do not have to call the bank every time you move to another country.

Now, I have a question. You mentioned Virtual Mailing Services. Do you have any recommendations? I’ve been using Regus (, but it is not cheap, and I would like to find a less expensive option.

Thank you


10 theprofessionalhobo August 30, 2013 at 10:38 am

HI Elena,
I believe VPN services also act as proxy servers – they allow you to use IP addresses in multiple countries to “disguise” your location, and they encrypt all your traffic against hackers.
Either way, you’re right – it’s a good idea to notify banks and credit cards of your travel plans (some credit card companies now have ways to record your travel plans through their site instead of calling it in); I’ve still had my cards frozen (which is why I always carry a back-up credit card), but at least it’s an easy call to fix, and I appreciate their attention to security.

As for virtual mailing services, I’ve never used one so I don’t have any specific recommendations. I’ve heard about Earth Class Mail, but I don’t think they’re particularly cheap either.
If I were you, I’d simply do a search for virtual mailing services in your area and evaluate the services you see. There are some smaller more local companies (eg: statewide) that are often reasonably priced, and can even perform services like cheque deposit and drivers’ license renewal. (I think – don’t quote me on that….I remember reading it somewhere a few years ago).


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