Startup cost
$200–$2k
TRUiC Business Ideas
How to Start a Data Entry Business
Decision Snapshot
Data Entry
Idea Score
50
Profit margin
5%
Break-even
4 mo–12 mo
Time to launch
12 wk–36 wk
Demand trend
Stable
5-yr failure rate
—
Capital intensity
Low
Time commitment
Flexible
Part 1 - How to start a Data Entry business - Background
These businesses are necessary because most businesses have a need for data entry, information tracking, organization, and analysis. Popular websites offer jobs that can be bid on by data entry businesses, which then enter data for any company that needs it. Most large companies contract with independent data entry companies for either part-time or full-time data entry needs.
You may also be interested in additional side hustle ideas.
Our guide is in 3 parts:
- Part 1 - How to start a Data Entry business - Background
- Part 2 - Our planner tool to see if this idea is the right fit for you
- Part 3 - Action plan to get started
What are the costs involved in opening a data entry business?
The cost involved in starting a data entry company is minimal. That’s because they can be run from home, or operated out of an office on a larger scale. Today’s data entry businesses operate mostly or entirely online.
All that’s needed is a computer and an Internet connection. These costs can range from a few hundred dollars to a few thousand, depending on the computer purchased.
What are the ongoing expenses for a data entry business?
Ongoing expenses for this type of business are low and limited to utility costs for running the business, computer maintenance, repair, and replacement, rent, and insurance. These ongoing costs can be as little as a few hundred dollars per month to several thousand dollars, depending on the size of the business.
Who is the target market?
Preferred customers are larger corporate clients or those with ongoing data entry needs. The worst types of clients for this business are smaller accounts or businesses that have sporadic cash flows and cannot afford to pay for ongoing data entry services.
How does a data entry business make money?
A data entry company makes money by charging clients for data entry services.
How much can you charge customers?
Data entry companies typically charge customers an hourly rate or a “Full-Time Equivalent” (FTE) rate. FTE rates are usually a flat fee per month for services.
Rates for services can also vary depending on specific services. For example, catalog management, data entry, scanning, and data mining services may fit on one “tier” of services, which the business can charge $7-$10 per hour for.
A company may also decide to offer FTE rates of between $1,000 and $2,000 per month for ongoing services.
More advanced data manipulation and management services may warrant higher charges of between $10 and $20 per hour, or $3,000 to $6,000 per month.
How much profit can a data entry business make?
A data entry business can have a high profit margin. However, it all depends on how quickly your employees can finish jobs. Profit margins of 5% or less may be typical for a startup with little experience. However, those margins can grow to over 20% if processes are streamlined.
How can you make your business more profitable?
Making a data entry business more profitable usually means either specializing in one sector or niche or offering more value for the money. For example, a data entry business that specializes in the healthcare industry may be able to charge its clients more money because the company needs specialized knowledge of its customers’ industry — knowledge that isn’t widely available in the general data entry market.
Day-to-Day and Growth
What happens during a typical day at a data entry business?
Day-to-day activities of a data entry company include processing requests from customers and, of course, data entry. Most of an employee’s time is spent working at his or her desk organizing, sorting, entering, and manipulating data.
The owner of the company may be involved in marketing, so most of his or her time would be spent managing client relationships and attracting new clients.
What are some skills and experiences that will help you build a successful data entry business?
Data entry companies require specialists who are skilled in typing and data entry, scanning, manipulating documents and data, organizing, and other office-related skills. Proficiency in a variety of spreadsheet and word processing applications is usually a must. Good communications skills are necessary as is the ability to meet tight and changing deadlines.
What is the growth potential for a data entry business?
A data entry company can remain small, with just one or two people operating the business. These kinds of businesses typically take on a handful of clients and establish a relationship with them that lasts for years. A lot of businesses stay small like this forever.
As the client base grows, however, some companies decide to hire staff to assist with the workload. These companies can scale easily as long as they continue hiring data entry specialists, HR support, and management that is sufficient to handle the growth of the company.
An example of a large data entry company would be ARDEM Incorporated or Invensis. These companies are global, working with international corporations. So, the theoretical upper limit is huge.
What are some insider tips for jump starting a data entry business?
Jump starting a data entry business is difficult. Because it has almost no startup costs, competition for jobs is fierce in this field. Because this business is entirely online, there is also a sizable risk of scams.
Convincing the marketplace that you’re a legitimate company will make it a lot easier. Realize you are operating in an industry that is seen as untrustworthy simply because of the number of scam artists operating amongst legitimate businesses.
Start small. Get reviews from reputable and well-known companies or companies whose contact details are very easy for potential customers to check.
How and when to build a team
Building a team is never necessary. However, if you want to become a large data entry company, you should consider starting with a small staff of at least 3 to 5 people and expand as your budget allows. The most important personnel are the data entry specialists, followed by HR staff.
Part 2 - Is a Data Entry business the right fit for you?
Business Evaluation & Strategy Tool
We'll walk you through the four pillars every business needs: Points of Leverage, Marketing Strategy, Financial Model, and Personal Compatibility. At the end you'll see a personalized report and your action plan below will be tailored to your answers.
Step 1 of 4 — Points of Leverage
Every viable business has natural advantages. Below are common leverage points across four categories. Pick the ones that apply to your Data Entry business. We've pre-suggested a few based on your idea — review and adjust.
Step 2 of 4 — Marketing Strategy
Without a way to connect with customers, even great businesses fail. Pick the channels you plan to use to reach your customers.
Step 3 of 4 — Financial Model
Enter your monthly baseline costs — the minimum overhead to keep the business running. Then we'll calculate how many sales per month you need to break even.
Step 4 of 4 — Personal Compatibility
A business that doesn't fit your life will fail no matter how good the numbers look. Tell us how this business fits you.
Your Data Entry Evaluation Report
Complete the four pillars and your personalized summary will appear here.
Points of Leverage
Marketing Strategy
Financial Model
Personal Compatibility
Part 3 - Action plan to launch your Data Entry business in 90 days
Nine concrete steps to take you from idea to open business, grouped into 30-day phases. Complete the planner above and we'll highlight what's most important for your situation.
First 30 days — Foundation
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Form your legal entity
An LLC keeps your personal assets separate from business debts and lawsuits — the most common reason small business owners choose this structure. Sole proprietorships and partnerships do not provide this protection.
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Get an EIN and register for taxes
Apply for your free Employer Identification Number through the IRS, then register for any state or local taxes that apply to your business (sales tax, franchise tax).
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Open a business bank account and credit card
A dedicated business account is required to maintain personal asset protection. Mixing personal and business finances ('piercing the corporate veil') can void your LLC's liability shield.
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Set up business accounting
Recording expenses and income from day one makes tax filing easier and lets you see when the business is actually profitable. Use software (QuickBooks, Wave) or a part-time bookkeeper.
Days 30–60 — Compliance & Risk
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Get permits and licenses
State and local requirements vary widely. Brick-and-mortar businesses typically need a Certificate of Occupancy; service businesses may need specific professional licensing; food businesses need health permits.
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Get business insurance
General Liability Insurance is the most common starting point. If you'll have employees, most states require Workers' Compensation. Specific industries need additional coverage (product liability, professional liability, etc.).
Days 60–90 — Launch
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Define your brand
Your brand is how customers perceive and remember you. A clear name, logo, and visual identity make every later marketing decision easier and protect you legally as you grow.
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Create your business website
Every legitimate business needs a website. Social media pages are not a substitute — you don't own the platform. Modern website builders mean you can launch a clean site in a weekend without a developer.
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Set up your business phone system
A dedicated business number keeps your personal life private, makes the business look legitimate, and lets you route calls professionally. Cloud phone services start under $20/month.