1. I do understand that cost of living varies. Still, I will insist that $500/month is too low. Even a single $2000 computer amortized over 24 months is going to eat nearly 1/5 of your revenue. Remember, your housing probably isn't free, you do have to plan for retirement, you do have to go to the dentist from time to time. Many people make unrealistic assumptions here.
2. If you start with $500 as your goal, you will end up reaching $500. You will have something that you have to support and maintain. If you designed it as a $500 dollar business, there is no good way forward, and you are stuck.