I created a Distribution List , however I cannot add email accounts that are not users on the server. Is there a way to create a distribution list for external emails?

Sure, create Contacts to represent the external recipients and add them to the Distribution Group. Tony www.activedir.org

Do I have to create one contact per email or can I create one contact for all email addresses? I have about 250 email addresses.

You will need to create one contact for each email address. Contacts can have multiple email addresses, but only one address is primary. The primary address is used for routing purposes. Tony www.activedir.org

I was trying to not create so many users.