Even the world of regular eCommerce has the same attitude of people starting out in web hosting. Too often I hear from people that they can't afford the $10 for web hosting fees for their online store, or that the $200 for the software to operate their online store is too big of an expense. The $15/month fee for WHMCS, plus $5 for their own account is too expensive.
Business is not cheap, and should never be approached that way. If it's being approached on a shoe-string budget, that is the type of clientele it attracts. I understand maximizing proffits etc, but when people fail to establish a business plan, I think this in itself can hurt people.
The advantage of a business plan is to see just what factors are needed to operate a business, this includes salary for the business owner. Too often people don't factor their time or effort into starting the business, and this is an ONLINE trend. Any Brick & Mortor store will have these figures or their bank won't allow them to get a loan.
Can you start for less than $50? Sure - would I? No way.
If I was to start a new web hosting company, I would seek financing for between $20,000 and $50,000. This gives me apporx 5 months (3k/month) to pay a salary, and money for advertising and turn a proffit. Remember, it's an INVESTMENT OPPORTUNTIY, that doesn't mean guarantee, and that's how investors operate! If you cross your T's and dot your i's, investors sometimes don't even mind if you lose thier money as they get to write off a big chunk on their taxes. If you show neglagence however, that's a different story.
So for me, 20k minimum is what I'd need to open and keep things floating for a 5-6 month period. Investment to be paid back within 12 months.