business plan startup cost

Small Business Startup Costs Explained 

3 min. read

Updated March 4, 2024

What will it cost to start your business ? 

While every business is unique, there’s a common approach to helping you figure out what it’s going to take to get your business off the ground and sustain it as sales ramp up.

And, knowing the startup costs for your new business is critical before you launch. Underestimating the funds required could leave you without enough cash in the bank and heading towards failure before you even get started.

Read this guide and learn to calculate, manage, and minimize your startup costs. 

• What are startup costs?

Startup costs are what a business spends to get up and running before generating revenue. 

Starting costs vary based on business type but often include expenses like lease payments, permits, and market research. They can also include asset purchases such as vehicles, real estate, and equipment. Crucially, starting costs also include the money that you need to have in the bank to cover expenses as your business launches until your sales have grown enough to cover those expenses.

• Startup cost examples

Starting costs typically include expenses that occur before you start selling and major purchases, otherwise know as assets.

Startup expenses

• Permits and licenses
• Incorporation fees
• Logo design
• Website design
• Brochure and business card printing
• Down payment on rental property

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• Cash to cover operations until sales can cover expenses
• Improvements to your chosen location
• Vehicles used for business operations
• Intangible assets like trademarks, copyrights, and patents.
• Why calculate startup costs?

Knowing your initial costs and expenses improves your chances of launching successfully . It helps you:

Avoid unnecessary risks:

You can avoid unexpected financial pitfalls and make informed decisions by understanding potential expenses.

Start your financial plan :

It helps you budget and determine if you have adequate funds to launch and operate until you’re profitable.

Convince investors :

A detailed breakdown of startup costs can make your business more appealing to investors, as you’ll demonstrate thorough planning and financial acumen.

Improve decisions: 

With a clear view of costs, you can make decisions about pricing , scaling, and other critical areas more confidently.

• What are your startup costs?

Starting costs vary from business to business. So, how do you know your costs and, more importantly, how much money you need to cover them? 

Check out the following resources to answer those questions.

How to calculate your startup costs

Accurately estimate startup costs by accounting for expenses, assets, and cash.

3 Steps to Figure Out How Much Money You Need to Start a Business

How much cash will it take to start your business? Your total cash must go beyond startup costs and ensure you’re prepared to cover emergencies and initial growth.

How Much Should You Personally Cover for Startup Costs?

Before covering any business expenses, consider the impact on your personal finances. What’s the right amount? How will you pay yourself back? And are the rewards worth the risk?

• Tips for managing startup costs

Follow these steps to minimize unnecessary expenses and prioritize the right things.

How to reduce your startup costs

Keep your startup expenses in check and save money through proper planning, tracking, and exploring possible tax deductions.

Hidden startup costs you may overlook

It’s challenging to account for everything. Don’t let overlooked fees and expenses immediately throw off your budget.

What you won’t regret spending money on as a business owner

There is such a thing as being too frugal. But where should you invest more money? While it depends on your business, you can start with these recommendations from a seasoned entrepreneur.

Get the rest of your business finances in order

Knowing what it costs to start your business will make it far easier to get your finances in order.

Check out the rest of our startup financial resources to better understand your path to profitability.

• Create your financial plan
• Set up accounting and payroll
• Prepare for funding

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Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.

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• Get your business finances in order

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How to Calculate Business Startup Costs

Starting a business from scratch takes a lot out of you, even before you begin operating—whether it’s about selecting a revenue model, securing startup funding, or estimating startup costs.

I already knew it was challenging for entrepreneurs to calculate the startup costs accurately.

However, when I turned up to my computer, researching this article, I discovered so many challenges new business owners face while estimating startup costs that I had overlooked or didn’t pay much attention to earlier.

Thousands of startups close down every single year. 38% of them fail solely because they underestimated their startup costs and ran out of cash. You can’t ignore something like that, can you?

That said, I’m ready to pour my research into the article to help you calculate your business startup costs .

So, you’re ready to begin? Let’s dive right in.

Key Takeaways

• Startup costs are the expenses a startup must bear in the process of starting a new business, while operational costs are the expenses that are incurred during daily operations.
• Different types of business structures, such as sole proprietorships, partnerships, and corporations, have different costs.
• Business insurance, formation fees, licensing and permits, and marketing are some of the most common business startup costs.
• A modern financial forecasting tool is the most efficient method for calculating startup costs.

How much does it cost to start a business?

Startup costs for a small business depend on various factors like business model, location, industry, and scale of operations. Although it’s tough to estimate precisely, Guidant Financial’s 2023 survey reported that the average cost of starting a small business falls between $50K and $1 million .

You must consider the industry, business category, working capital requirements, and other common expenses associated with the business for the accurate estimation of startup costs.

Let’s kickstart this guide by discussing the common startup expenses to consider while starting a new venture.

Common Business Startup Costs to Consider

It is a typical list of expected business startup costs with rough cost estimates you must plan for while starting a new business. Your actual startup costs will entirely depend on your business category and the industry you serve.

Following are some of the most common startup costs to consider:

1. Equipment and tools

It’s no surprise we’re starting the list with equipment and tools. There’s no way a business can operate without the necessary equipment. The equipment costs may range from $10,000 to $120,000 . However, these costs will entirely depend on the business type and equipment requirements.

For instance, starting a food truck would require financing a food truck and expensive kitchen equipment, while starting a small daycare would only require purchasing a few play area equipment.

Here are the average equipment costs for some of the popular business types:

• Restaurant and food trucks: $24,000 to $120,000+
• Small Bakery: $6,000 to $8,000
• Clothing line: $2,000 to $15,000+
• Construction: $10,000 to $50,000
• Law firm: $5,000 to $25,000+
• Barbershop: $1,000 to $2,000

2. Incorporation fees

The first thing you should do is choose a business entity when you plan to form a new business. The most common and preferred business structure types include sole proprietorship, partnership, corporation, and LLC.

The business incorporation or filing fees can range from $50 to $725 in the United States depending on your industry, the state you operate in, and the business structure you choose.

However, the average incorporation fee is $300 in the majority of the states in the US. You may contact your secretary of state’s website to learn more about the filing fees or process for the articles of incorporation or articles of organization.

3. Business licensing and permits

Operating any small business requires specific licenses and permits depending on the industry compliance and regulations. For instance, a trucking company requires a USDOT number, heavy vehicle use tax, and others, while a restaurant may need licenses like food safety and liquor licenses to operate.

Similar to different filing fees for other business structures, the business licensing and permit fees vary depending on the business industry and regulatory compliance. You can expect to spend between $1,000 to $5,000 for your licensing and permitting requirements.

4. Office or retail space

If you’re starting a small business that can be operated from home like a home bakery or an online clothing store, you may not have to worry about office space costs.

But if it’s not the case, paying for an office or a retail space would make up a sizable portion of your fixed expenses, no matter whether you rent or buy the place.

Based on our research, you should spend around $100 to $1200 per employee monthly on your workspace.

However, the actual office space expense will entirely depend on your location and the type of space you’re using.

5. Legal and professional fees

Professional and legal fees may sound like an additional expense while starting up with limited resources, but it’s essential to ensure compliance with regulations and maintain accurate financial records.

You may choose legal assistance for business licensing, EIN registration, and legal paperwork, a business consultant for market research and strategic planning, and an accountant for bookkeeping and tax planning.

You can hire these professional consultants on an hourly basis; their services typically cost around $40 to $150 per hour.  You should spend around $2,000 to $10,000 per year on professional and legal fees.

6. Inventory

Retail, wholesale, distribution, and manufacturing—if your small business falls under any of the mentioned categories, you need an inventory to operate your business. Finding the ideal inventory size to carry can be challenging when entering a new marketplace.

You want to attract more and more customers and make sales in your early days. However, you can’t also risk having too much inventory since it can increase spoilage.

Consider allocating 15% to 25% of your budget to inventory, depending on your industry. You will eventually learn more about inventory management once your business starts operating and making sales.

7. Marketing and advertising

Although it’s an optional expense, marketing is something worth investing in. Your marketing expenses may include physical materials like sign boards, banners, hoarding, paid social media advertising and search ads, or money paid to marketing agencies or consultants.

It is suggested to keep your advertising and promotion costs under 10% of your budget. If you’re working on a really tight budget, there’s no need to spend big bucks on marketing or hire fancy consultants or agencies.

With social media being a free marketing platform, over 47% of small business owners run their marketing efforts themselves, and you can do it, too.

8. Website development

A business website is like an online office where customers can contact you, learn more about your offerings, and seek assistance.

When building a website, make sure it looks professional, is easy to navigate, and displays the relevant information about your product and service offerings, as well as the contact information.

You can either develop a business website using website builders like Wix and Squarespace or hire a developer to do it for you.

Creating a website can range between $1,000 to $10,000 when you hire a developer, whereas you can do it on your own with website builders by spending around 40 dollars a month.

9. Business Insurance

Like you have a house, car, and health insurance, you need business insurance to ensure your business remains intact in troublesome and inevitable times, be it a natural disaster or a customer filing a lawsuit against your business.

The level of security and type of business insurance your business will require depends entirely on your business, industry, and the number of employees you have. For instance, a big-scale manufacturing company with over a thousand employees would require much stronger insurance compared to a home bakery.

Some of the must-have business insurance types include:

• General liability insurance—for all online, offline, and home-based businesses.
• Worker’s compensation insurance—for businesses with 1 or more employees.
• Professional liability insurance—for businesses offering consulting services.

You must expect to spend approximately $500 to $1500 annually on business insurance.

10. Payroll

Payroll is undoubtedly one of the major business expenses most businesses incur. However, there’s no denying how crucial it is to hire quality employees to make your business thrive.

Of course, payroll expenses are employee salaries, but there’s more to it. Your payroll expenses may also include:

• Incentive or bonus
• Commissions
• Paid time off
• Overtime pay
• Travel allowance
• Other benefits

Most businesses spend around 20% to 50% of their monthly budget on payroll. It can be more or less for your business depending on your business and the number of employees you have.

11. Office furniture and supplies

Those planning to have a traditional nine-to-five corporate workplace, be ready to spend some severe bucks on office furniture and office supplies.

When you operate from a corporate workspace, you need a desk, chair, telephone extension, computer, computer programs like accounting software, and, of course, a coffee machine or two.

The cost of furniture and supplies depends solely on your employee strength and the size of the office. However, it’s recommended to keep your furniture and supply costs to 10% of your total startup costs.

12. Utilities

No matter whether you plan to rent or purchase a workspace, you are bound to pay utility bills that include electricity, gas, water, internet, and phone bills for your office.

Unlike other fixed costs, it’s hard to estimate utility expenses, but the average cost of utilities for commercial buildings is $2.10 per square foot , according to a report by Iota Communications .

Besides the electricity, internet, and phone bills, the utility expenses may also incur the HVAC unit installation costs. This heating and cooling system will add a few additional thousand dollars to your startup expenses.

13. Business taxes

How much you’d spend on business taxes will depend on your business entity, tax-deductible expenses, and revenue. Since it’s hard to predict your revenue, estimating the exact amount to allocate for tax preparation may feel a bit challenging.

Under US federal law, corporations pay a flat 21% corporate income tax . If you’re a pass-through entity(a legal entity that passes all its income on to the owners), the business income or losses will pass through to your personal taxes.

However, you, as a pass-through entity, can claim a 20% deduction on income before paying taxes.

 14. Other expenses

Since you’ve reached this section, you must already have a clear understanding of all the expected startup costs, whether they are one-time or recurring expenses.

Here, we will discuss the other costs most small business owners tend to miss or overlook while estimating the startup costs— research expenses and borrowing costs .

Capital is required for starting a business, and equity financing and debt financing are considered to be the most preferred ways to acquire the initial working capital.

Equity financing, however, does not apply to most small businesses since it requires stock issuance. So, securing a small business loan seems to be the most likely source of debt financing for small business owners.

Research expenses, on the other hand, are the expenses incurred even before you started operating, spent on conducting a careful industry analysis and market research.

When calculating your startup costs, make sure to include these two as well.

Since we have already discussed common business expenses, let’s move on discussing calculating the startup costs.

How to Calculate the Costs of Starting a Business

There are various ways to calculate the cost of starting a business. Still, drafting a business plan remains the best way to estimate startup costs.

The financial forecasting section of your plan provides three to five-year projections of revenue, profit, and expense.

The other resources for estimating startup costs include using Upmetrics’ startup costs worksheet or calculator . These resources will help you estimate the initial investment required and determine how much capital or financing you’ll need.

Know that many of the common business expenses we discussed earlier are recurring, with some of them being one-time expenses.

Be sure to categorize them and calculate the recurring expenses on a monthly, quarterly, and annual basis. In contrast, consider expenses like incorporation fees and equipment financing one-time costs.

Sounds like a lot to digest? Get a business planning software like Upmetrics and calculate startup costs in minutes with AI-powered financial forecasting .

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Calculating Startup Costs for Your Small Business

Does your business fall under one of these categories? Excellent. We have startup cost guides for all the business categories listed below. Get a cost estimate for starting the business you plan to launch.

How to Reduce Your Business Startup Costs

Starting a business means being prepared to bear some non-negotiable expenses; there’s no other way around. However, sound research and thoughtful planning can help you save on high-ticket purchases—ultimately reducing your startup costs.

For instance, hiring professional business plan writers can be expensive for a business owner on a tight budget to create a business plan, so they can opt for a business planning software like Upmetrics to draft a business plan at a much lesser cost.

It was just an example, here are a few tips to help you reduce your business startup costs.

1. Create a business plan

It doesn’t make sense. Isn’t it another business expense? How will it reduce costs? Some of you must be having this line of questioning in your mind, but let us clear it up for you.

Brainstorming and listing all the important business costs, and estimating your total startup costs is challenging. Missing out on some critical expenses tends to happen. However, creating a comprehensive business plan makes things easier.

An AI-powered tool like Upmetrics makes sure you don’t miss out on any critical information and helps you properly estimate your startup costs.

Remember, accurate estimation of startup costs is your first step to reducing them.

2. Start small

You don’t need everything or a perfect business setup when you are not making any sales, forget about the business profits. Start small with limited resources and grow your business as it grows financially.

For instance, instead of having a big fancy office for your startup, start with a remote team or a co-working space until you raise capital or gather the necessary resources.

One way of doing that would be listing all the major high-ticket expenses and researching competitive alternatives for them.

3. Lease instead of purchasing

Of course, having your own office or a retail space feels good, but not at the cost of more than 70% of your budget for starting a business. Prefer leasing the place instead of purchasing.

It will leave you with enough working capital or cash to efficiently manage your business operations and handle the other non-negotiable costs.

Furthermore, there’s no guarantee your storefront will find success at the very first location; you may have to relocate if things don’t work out. The further process will be more straightforward with leasing, whereas the same won’t be the case when you own the place.

4. Buy used equipment, tools, or furniture

Since you’re looking for ways to reduce costs and save money, there’s no way for you to have brand-new business equipment, tools, and furniture. You can look for used equipment, tools, and furniture on online selling sites like eBay and Etsy.

Be sure to thoroughly check the equipment before purchasing to avoid any future restoration or repair costs.

5. Funding and business credit card

Now that you have a long list of capital expenditures, you will need financing or funding to manage all these costs. You can’t simply do it all on your own, can you?

It won’t reduce the startup costs but will help you get resources to manage them. Your funding options include debt and equity financing. You may apply for a business loan, reach out to angel investors, or apply for business grants to secure the initial investment for your business.

With limited debt financing options, it could be tough to get through. Applying for a business credit card can be a more accessible alternative to a business loan. You can easily qualify for it while also gaining a higher credit limit than your personal credit card.

Make sure you’re not totally relying on it or taking out more than you can repay. This can negatively impact your credit score, making it harder for you to secure business loans in the future.

And, the final section leads us to our conclusion!

And there you have it. We hope now you have a better understanding of startup cost calculation. What’s next? It’s time to estimate the actual costs of starting a business, be it a bakery, restaurant, or hot shot trucking, and start budgeting.

Get your hands on the modern and AI-powered business planning solution, Upmetrics—and create precise startup cost projections in minutes, just like that.

Frequently Asked Questions

What is the average cost to start a small business.

It is a question with a broad scope for the answer since you can start a business with an initial investment of $100, $1,000, and up to a million dollars or even more. However, the startup and first-year operational expenses fall somewhere between $30,000 to $40,000.

How do you calculate startup costs?

The most easy-to-use method to calculate startup costs is to create a business plan. It’s easier than ever to calculate your startup costs using a tool like Upmetrics. 

Simply head to the financial forecasting feature, get AI suggestions to list your startup and organizational costs, add remaining costs, and let it make the automated calculations for you.

What are business startup costs?

Business startup costs are expenses incurred when starting a new business. These can be your marketing costs, payroll expenses, or any other costs involved. These can either be recurring or one-time costs. 

For instance, your advertising costs are recurring, whereas incorporation fees are a one-time expense. Although there can be some common startup expenses, the value or costs for them may not be the same for two different businesses.

What is the difference between startup costs and operational expenses?

Startup costs are the expenses small businesses incur when starting a new business, whereas operational expenses are those incurred during normal day-to-day business operations. 

For instance, equipment financing can be considered a startup cost, whereas inventory or marketing costs can be your operational expenses.

What are the examples of start-up costs?

The following can be considered as a few examples of startup costs:

• Equipment costs
• Inventory expenses
• Business licenses and permits
• Marketing and advertising expenses
• Payroll expenses
• And others.

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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When you’re writing your business plan , you’ll need an accurate estimate of what it will cost for you to start your business so you can decide how to manage your funding and expenses.

Accurately estimating your startup costs can be tricky, but this guide will help you understand your initial costs and how you can plan for them.

First we’ll look at some of the most common startup expenses to get you started:

Common business expenses

The first step is to make a list of all the purchases you’ll need to make in order to start operating.

Categorize your list into expenses that are one-time purchases and those that will be ongoing payments, since both will factor into your calculations.

Here are some of the most common expenses in both categories:

One-time expenses

Necessary equipment like a cash registers, machinery, or vehicles

Incorporation fees

Permits and licenses, such as city, county, and state licensing, or those related to your specific industry

Computer or technology equipment

Down payment for your office or store

Initial business cards

Initial inventory

Initial office supplies

Technology, such as computers, tablets, or printers

Office or business furniture

Ongoing expenses

Business taxes

Your rent or mortgage payment

Accounting services

Legal services

Business insurance

Payroll and employee benefits

Your salary and benefits

Operating expenses, such as bags in retail

Office supplies, such as pens and paper

Website hosting and maintenance

Travel if your business will require it, including gas

Utilities like electric, gas, water, phone, and internet

Marketing materials

Ongoing inventory

Ongoing office supplies

Loan or credit payments

Next, you’ll also need to determine which of your ongoing expenses are fixed costs, and which are variable costs. Fixed expenses you can plan for exactly, but for variable expenses, your costs will change each time.

Here are some common expenses in each category:

Fixed expenses

Lease or mortgage

Administrative costs

Variable expenses

When planning for your startup, you need to only consider items that are essential in the beginning, rather than optional items you can invest in later when your business revenue can help offset the cost.

Don’t forget to research additional necessary expenses in your industry. Other professionals in your field or websites about your type of business can help you determine what is essential.

>> MORE: Best budgeting software for businesses

How much do you need?

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We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

How to calculate startup costs for your small business

Use your list from above to complete the next steps:

1. Research

After you’ve made a list of your expenses, it’s time to research. You’ll need to estimate the cost of each item on your list for an accurate estimate.

When researching, don’t forget to do some bargain hunting. You’ll want to minimize expenses as much as possible without sacrificing quality for big-ticket items. This will mean that your research will include equipment capabilities, reviews, maintenance costs, and warranties.

Your one-time expenses and fixed ongoing expenses should have specific costs you can estimate fairly accurately.

For variable ongoing expenses, you may have to do some extra research and make some broad guesses. For example, you won’t know what your ongoing inventory costs will be until you’re operational, but if you factor in a bit of cushion on these expenses, you can ensure you’ll have enough funding to cover these expenses.

2. Expense totals

You’ll need to total your one-time expenses, so that you know exactly what just opening the business will cost, but that isn’t all. You’ll also need to factor in several months’ worth of ongoing expenses.

While your business will be able to cover these expenses once it is operational, it may take time before it can generate enough sales to cover these costs, much less make a profit.

Generally speaking, it’s a smart idea to count on covering six-12 months of business expenses up front while your business is growing. While you can factor sales growth and business revenue into the payment for these costs to lessen the upfront burden, it’s generally safer to make calculations on the assumption that your business won’t be able to contribute, since you won’t be able to accurately forecast sales until you’re operational.

You may also find that some expenses will increase as your business grows, such as marketing, inventory, or payroll, so you’ll want to factor in some extra cushion for growing needs.

4. Total startup costs

Once you have all these figures, you can total your expenses to estimate your startup costs fairly accurately.

Yes, it’s probably a large number, especially if you plan to factor in a cushion for the first few months to a year of operation, but there are many funding options for new business owners.

Once your business begins operating or you begin making purchases for your business, you may find additional needs you left out of your estimates or that some expenses are lower than you planned. You’ll need to keep adjusting your plan as you learn more through the process of starting your business.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

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Understanding Common Business Startup Costs

Additional startup cost considerations, the bottom line.

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Starting a business involves much more than just setting up an office or choosing furnishings. It demands careful financial planning and precise accounting, particularly in the initial stages.

Many new businesses make the mistake of not properly estimating and budgeting for startup costs, relying too much on a sudden influx of customers. This approach often leads to poor results and even the business's failure . A solid financial plan is key not only for managing startup costs but also for building a foundation for your venture's future growth.

Key Takeaways

• Startup costs are expenses incurred while establishing a new business. They can be divided into two categories: pre-opening and post-opening. 
• Pre-opening startup costs include a business plan, advertising, employee training, professional services, and setting up books and records.
• After the business opens, costs shift toward advertising, promotional activities, and employee salaries.
• Different types of business structures—like sole proprietorships, partnerships, and corporations—each have unique startup costs. Understanding these variations is crucial as you plan your budget and financial strategy.

Startup costs are the expenses a new business faces during its creation. Unfortunately, starting a business with no money is challenging and not an option for most businesses, which will require capital to start operations. Each business is unique and thus incurs different types of startup costs depending on its nature of operations.

For example, online businesses, such as e-commerce websites, often have lower initial capital requirements than brick-and-mortar businesses, such as restaurants. This difference in startup costs may stem from online businesses needing less physical space, fewer furnishings, and often fewer staff compared to brick-and-mortar operations.

Despite these differences, several expenses are common across most types of businesses. These typically include costs related to legal or attorney fees, licensing, initial inventory, market research, and marketing efforts to launch the brand.

Keep detailed records of all your startup expenses from the beginning. This not only helps with budgeting and planning but also ensure you can take full advantage of any tax deductions available for startup costs.

The Business Plan

Creating a business plan is crucial for starting a business as it provides a detailed roadmap and prompts careful consideration of various startup costs. Underestimating these expenses can lead to an inflated expectation of net profit, which can be detrimental for a small business owner. Hiring a consulting firm or a business plan writer to assist with creating a business plan can cost between $1,000 and $5,000 or more. The final price often depends on the complexity and length of the plan.

Research Expenses

Before launching a business, it's crucial to thoroughly research the industry and target consumer demographics. Some business owners opt to hire market research firms for this purpose.

Hiring a market research firm is essential for companies wanting to excel in competitive markets. These firms offer key insights into customer preferences and industry trends, using both qualitative and quantitative data to inform strategies ranging from product development to marketing. Their analysis helps businesses make informed decisions and identifies potential risks and opportunities.

For business owners who choose to follow this route, the expense of hiring these experts must be included in the business plan.

Borrowing Costs

Starting up any kind of business requires an infusion of capital. There are two ways to acquire capital for a business: equity financing and debt financing. Equity financing usually entails the issuance of stock, meaning the company offers shares of its ownership to investors in exchange for funds. However, this doesn't apply to most small businesses, which are proprietorships and don't issue stock.

For small business owners, the most likely source of financing is debt in the form of a small business loan . Business owners can often get loans from banks, savings institutions, and the U.S. Small Business Administration (SBA). Like any other loan, SBA business loans come with principal and interest payments that need to be carefully planned for when starting a business, as failing to make these payments can result in severe consequences.

Insurance, License, and Permit Fees

Many businesses are expected to submit to health inspections and authorizations to obtain certain business licenses and permits. Some businesses might require basic licenses while others need industry-specific permits.

Carrying insurance to cover your employees, customers, business assets, and yourself can help protect your personal assets from any liabilities  that may arise. 

Technological Expenses

Technological expenses include the cost of a website, information systems, and software, including accounting and point of sale (POS) software , for a business. Some small business owners choose to outsource these functions to other companies to save on payroll and benefits.

Equipment and Supplies

Every business needs equipment and basic supplies, which are crucial components of startup costs. When planning these expenses, you must decide whether to lease or buy the equipment. 

The state of your finances will play a major part in this decision. Even with sufficient funds to purchase equipment outright, it might be more practical to lease initially, with the option to buy later, especially if other unavoidable expenses arise. However, it's important to remember that, regardless of the cash position , leasing isn't always the most beneficial option depending on the type of equipment and the lease terms.

Advertising and Promotion

A new company or startup business is unlikely to succeed without promoting itself. However, promoting a business entails much more than placing ads in a local newspaper.

It also includes marketing —everything a company does to attract clients to the business. Marketing has become such a science that any advantage is beneficial, so external dedicated marketing companies are most often hired.

Employee Expenses

Businesses planning to hire employees must plan for wages, salaries, and benefits, also known as the cost of labor . This includes not only direct payments but also any additional benefits that contribute to employee compensation packages, including health insurance, retirement plans, and bonuses.

Failure to adequately compensate employees can result in low morale, mutiny, and bad publicity, all of which can tarnish a company's reputation and be disastrous for the business.

Set aside some extra money for any overlooked or unexpected expenses. Most companies fail because they lack the cash to deal with unexpected problems during the business season.

It's important to note that the startup costs for a sole proprietorship differ from the startup costs for a partnership or corporation. Some additional costs a partnership might incur include the legal cost of drafting a partnership agreement and state registration fees.

Other costs that may apply more to a corporation include fees for filing articles of incorporation, bylaws, and terms of original stock certificates.

What Are Business Startup Costs?

Startup costs are the expenses required to create a new business. Once the business is operational, these costs can be broadly categorized into pre-opening and ongoing or operating expenses . Pre-opening costs may include expenses for developing a business plan, market research, securing a location, and initial marketing. Ongoing costs typically involve operational expenses like employee salaries, utilities, and inventory replenishment.

What Business Startup Costs are Tax Deductible?

Tax-deductible startup costs generally include essential expenses for establishing a new business, such as market research, opening advertisements, and employee training salaries. The IRS allows new businesses to write off startup expenses of $10,000 in startup costs and $5,000 in organizational costs in the year the business begins. However, total startup costs must be $60,000 or less and organizational costs must be $50,000 or less. If the costs exceed the maximums, the remaining has to be amortized.

How Do I Calculate Business Startup Costs?

To calculate your startup costs, first identify all necessary expenses like office space, equipment, licenses, permits, salaries, and marketing. Estimate each expense by researching online and consulting with mentors or similar businesses. You can then organize these costs into one-time and monthly categories, then calculate a total to understand your capital needs. Calculating your expected startup costs can help you secure funding, attract investors, and launch your business successfully.

Understanding and planning for startup costs is crucial for any new business. These costs include pre-opening expenses, like market research and business plans, and post-opening expenses, such as marketing and employee salaries. Every business has unique costs, but common expenses often involve legal fees, permits, equipment, and technology.

Accurately estimating your startup costs is key for any new founder. Realistic figures can help secure funding from investors or banks and ensure smooth operations. Keeping detailed records from the start can also help you in financial planning and maximizing tax benefits.

Internal Revenue Service. " Why Should I Keep Records? "

PlanBuildr Business Plan Software. " How Much Does a Business Plan Cost? "

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Internal Revenue Service. " Publication 583, Starting a Business and Keeping Records ." Pages 9-10.

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Business Startup Costs in 2022: What Small Business Owners Can Expect

Starting a new business is exciting, but it also may come with intimidating startup costs. Before you become a business owner, you’ll want to sit down and estimate the total price tag of the venture. In this article, we walk you through the process of calculating each business startup cost so you can launch your business on the right foot. 

What Are Business Startup Costs?

Every new business owner will run into costs associated with launching a business — but the amount you’ll pay depends on your business type and your needs. You’ll want to know ahead of time estimates of the business expenses you can expect so you aren’t hit with surprising costs you can’t afford during the launch process. 

Business startup costs depend largely on the type of business you open, which can be:

• Brick-and-mortar
• Service provider

When you start a new business, you may pay for things like business formation fees, marketing costs, business insurance, a website, and more. We cover each possible expense in detail below.

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How Much Does It Typically Cost to Start a Business?

The amount you’ll pay to start a small business will depend on the business itself. According to a 2021 Shopif y survey , small business entrepreneurs spent $40,000 on average in the first year of launching a new business. But this is an average. 

A small business with a physical location will come with a heavier price tag than a business that is run completely out of a home. You’ll have to pay for things like rent or a commercial mortgage, furniture, and physical marketing materials. But you’ll also need more insurance coverage since you’ll have a business location where customers or employees could hurt themselves. 

You can use this startup costs worksheet from the U.S. Small Business Administration (SBA) to help guide you through your estimate process.

10 Most Common Startup Expenses

In the first year of running a small business, you’ll likely encounter two types of costs:

• Capital expenditure : One-time purchase or debt that invests in the future of your business. This can include purchasing new property, facility upgrades, updated equipment, or patents. 
• Operating cost : Ongoing expense that allows your business to run in an efficient and productive way. Marketing, payroll, insurance, and research falls into this category.

The amount you pay for each operating cost depends on how much of the work you do yourself and how much you offload onto a professional that you’ll have to pay.

Here are the 10 startup expenses you’re most likely to encounter.

1. Research costs

Conducting market research before you launch a business can bring clarity to how effective your products or services will be. You can subscribe to a marketing research platform for a more affordable but more do-it-yourself option. Or you can hire a market research firm. According to the Vernon Research Group , hiring a market research firm can cost anywhere from $4,000 to $50,000, depending on the type of research you conduct.

2. Getting a business plan written

A business plan is an essential document that establishes your business structure and goals. You can write your own informal business plan or subscribe to software like LivePlan to guide you through the process, which charges a monthly fee. 

Otherwise, you can turn to a business plan company to complete it for you. If you hire a professional service to write your business plan, you can expect costs to start around $1,500 and increase with complexity. 

3. Business formation fees

How much you’ll pay for business formation depends on the business entity type you choose. A sole proprietor won’t have costs directly associated with founding a business, but an LLC will need to pay to file articles of organization (or if you’re incorporating, articles of incorporation). Filing fees depend on the state you live in but typically cost between $50 and $100, and may cost as much as $300. 

You may also have to pay for a state or federal business license , depending on your industry. Associated costs depend on the license.

4. Insurance and permits

Business insurance can provide protection if you need to pay for claims against your business. Without insurance, you’ll have to pay upfront for the damages and potential legal fees. You’ll likely need different business insurance if you run a fully online business than if you operate an office space, for example. 

The most common types of business insurance are:

• General liability insurance : Protects against “general” claims for property damage, bodily injury, or personal injury. The cost is determined by how risky your industry is, like retail vs. construction. 
• Errors and omissions insurance : Covers mistakes you or your employees make against customers or clients. The price depends on factors like the size of your business, the industry, revenue, and its employee training process.
• Commercial property insurance : Protects offices or brick-and-mortar locations against damages from instances like flooding, fire, theft, or vandalism. The cost depends on factors like the property value and its assets, as well as its location. 
• Workers compensation insurance : Pays for medical and benefit costs for employees that get hurt or ill while working. The cost of your workers’ compensation policy depends on the state, business size, payroll, and your industry’s risk. 

Having a business website that looks good and is functional is essential — it acts as the face of your business. Hiring a web design company to create a website for you can cost into the tens of thousands of dollars, but it can be worthwhile to pay this cost upfront to ensure that your site is everything you need it to be. You’ll also need to consider hosting options, which can determine how quickly your website loads when customers visit, and how much traffic your site can handle.

There are several affordable do-it-yourself website builders and hosting services out there, including:

• Squarespace : You can use this website builder to create a business website for between $16 and $49 per month. 
• Weebly : Create a business website for between $0 and $26 per month. 
• Wix : Its website plans cost between $16 and $45 per month. 
• Shopify : You can set up an online shop for between $29 and $299 per month. 

6. Setting up accounting systems

You don’t want to skip figuring out your accounting process before you start a business — or you may find yourself under a mountain of paperwork come tax time. Some accounting solutions cost money. To start with, opening a business bank account is a great way to separate your personal and business expenses from the beginning. (And you may pay a monthly fee, depending on the account). 

In terms of tracking your transactions, you can do it for free manually using a spreadsheet or pay for software that automates much of the process:

• QuickBooks : $30 to $100 per month
• FreshBooks : $15 to $50 per month
• Xero : $12 to $65 per month
• Wave : Accounting software is free

Connecting your business checking account to accounting software can simplify your bookkeeping and accounting. You can import your transaction information to easily see your business’s cash flow and expenditures. When it comes time to pay your business taxes, you can send this information directly to your bookkeeper or CPA. 

7. Marketing expenses

You may not need to pay for marketing, but if you do, it’s good to keep costs below 10% of your total budget. Your business may benefit from physical marketing materials, like signs or mailers, or from online marketing. Social media marketing can be free or paid. 

Come up with a small business marketing plan to make sure you are clear on your goals and not spending money without getting results. 

8. Technology and equipment fees

An office or physical location can eat up a large portion of your budget. Whether or not you have an office that staff comes into, you’ll need to equip it. You’ll need reliable technology like a computer and internet access to run any modern business. If you have a physical location or staff office, you’ll need things like office supplies and office furniture. Costs depend on how large the location is and the types of equipment you need.

9. Inventory fees

If you’re opening a business that requires you to keep inventory, like retail or wholesale, you’ll need to estimate how much your initial inventory supply will cost. You’ll want to consider stocking up more inventory in the beginning than you might later. The cost depends on how much inventory you need and what you’re ordering. 

10. Hiring employees

According to Glassdoor, it costs around $4,000 on average to hire someone new. These costs include background checks and drug testing, marketing, posting on job boards, and any internal expenses. These expenses will vary based on your business, but if you’re planning to hire employees for your new business, you’ll need to budget accordingly.

In Total, How Much Startup Cash Will You Need?

As mentioned, the average business startup costs fall around $40,000, but you can do it for much less or much more. The amount you pay for organizational costs depends on factors like your business size, the industry, the state it’s located in, and whether or not you have employees. 

If you complete your startup cost estimate and realize you don’t have enough cash on hand to launch — even though you’re ready in every other way — consider turning to lenders. Small business lenders can give you a leg up to start a new business and help you avoid waiting around for years before launching. 

Nav shows you your best options for small business loans if you need cash for things like capital expenses or business credit cards for help with cash flow. Create a free account at Nav.com to see the financing options you’re most likely to qualify for instantly.

Can You Write Off Startup Costs?

Yes, you can deduct certain startup costs on your tax return, but not all of them. The IRS provides a useful breakdown of what is allowed for a tax deduction for a new business. However, it’s a smart idea to hire a professional accountant to complete your tax return for you because of the complexity involved.

Tiffany Verbeck

Tiffany Verbeck is a Digital Marketing Copywriter for Nav. She uses the skills she learned from her master’s degree in writing to provide guidance to small businesses trying to navigate the ins-and-outs of financing. Previously, she ran a writing business for three years, and her work has appeared on sites like Business Insider, VaroWorth, and Mission Lane.

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Resources for Your Growing Business

13 business startup costs and how to calculate them.

Entering entrepreneurship is an exciting undertaking, but it’s not without challenges. Many first-time business owners underestimate the costs and how long it takes to turn a profit. Overhead costs such as rent, utilities, and equipment can add up quickly. Unforeseen challenges like supply chain issues or a natural disaster can eat away your profits within the first year.

However, with a strong business plan and the right support, you have a better chance of making your business ownership dreams come true. Read on to discover the 13 most common business start-up costs, how to calculate them, and support tips to help you through the start-up phase.

Key Takeaways

• Understanding and accurately estimating your startup costs can help your business succeed.
• When calculating your costs, include your one-time and ongoing expenses.
• Obtain financing, get a business credit card, and use accounting software to save costs.

Table of Contents

• Legal and Incorporation Fees
• Equipment Costs
• Office Space
• Research and Development Expenses
• Utility Expenses
• Marketing and Advertising Budget
• Website Development Costs
• Office Supplies and Furniture Expenses
• Professional Consultation Fees
• Payroll Expenses
• Insurance Premiums

How To Calculate Startup Costs for a Business

Best ways to save on startup costs, closing thoughts on business startup costs.

We’ve compiled a list of 13 common business startup costs. Not all will apply to every active trade or business and there may be additional costs specific to your situation. Consider these a starting point for your consideration.

1. Legal and Incorporation Fees ($145 to $1,000)

Not every new business needs legal help to set up. It will depend on your business structure and business type. 1 IRS, Business Structures , Accessed June 6, 2024 However, it is a good idea to seek legal advice before making any final decisions about your business to ensure you haven’t left yourself in a legally vulnerable position.

Business registration costs will vary by state and region, as will incorporation costs. 2 SBA, Register Your Business , Accessed June 6, 2024 However, many startup businesses begin as sole proprietorships and move on to incorporation later. Your lawyer can help guide the decision process and outline your best options.

2. Equipment Costs ($10,000 to $130,000)

For many brick-and-mortar businesses, equipment can make up a substantial portion of the startup expense, often costing upwards of $30,000. Generally, most equipment is a fixed asset as it is intended to last for the duration of the business, requiring repairs over replacement. For example, a bistro or coffee shop needs flatware, utensils, a coffee machine, a stove, fridges, and other related equipment. A physical therapist or chiropractic office needs examination tables, anatomical figures, and specialized machinery. A delivery business needs a warehouse, skid steer, vehicles, and palette jack.

Average equipment costs across several industries are:

• Small coffee shop: $15,000 to $30,000
• Chiropractic office: $7,000 to $22,500
• Retail store: $12,000 to $30,000
• Restaurant: $85,000 to $125,000

3. Office Space ($37 per square foot)

The average cost per square foot for lease space in the US is $37. 3 Commercial Edge, National Office Report , Accessed June 6, 2024 The city and location where you set up shop will influence the total cost. For example, New York City and Washington, DC have some of the highest rates in the country, whereas Albuquerque and Louisville have some of the lowest rates. 4 BDC, Expensive US Commercial Real Estate, Accessed June 6, 2024 5 Biz Journal, Cities with the most affordable office space , Accessed June 6, 2024

Leasehold improvements count as a fixed asset and can add to the overall cost of your office space. These include bathroom or kitchen installations, painting, lighting, flooring, and signage. Your landlord may offer a credit for improvements that can offset the cost. 

Some communities have strict regulations around signage, requiring permits and municipal or city approval.

4. Inventory (15% to 30% of your budget)

Service-based businesses, such as web development, freelance writing, and accounting don’t have inventory because they aren’t selling a product. However, anytime you sell a physical product, you’ll likely have inventory. Even if you are a B2B (business-to-business) model, it’s possible to be ‘on the hook’ for storing an unwanted product. 

Inventory-based businesses can anticipate inventory costs using up to 15% to 30% of their budget. The key is matching demand with supply. This can take time because it involves understanding the specific needs of your consumer. If you have too much, it adds to your overhead and could risk damage or going bad if it’s perishable. If you have too little, you won’t be able to keep up with demand and risk your clients finding an alternative elsewhere. 

5. Research and Development Expenses ($100 to $30,000)

Research and development (R&D) is one of the costs that can vary the most, from as little as $100 to $30,000 and more. You can perform a significant amount of research by scrolling through the internet and social media channels for many things but anything that skirts infringement or involves big business ideas will require significant research. 

R&D is the investigation, exploration, experimentation, analysis, and design stages of your business idea or plan. The purpose is to understand your competitors and set yourself apart. There are a few key ways to approach R&D, including interviewing potential customers, A/B testing (running 2 different product versions simultaneously and seeing which one performs better), and various data collection methods.

6. Utility Expenses ($2 to $15 per square foot)

Your regional location will make a big impact on your utility expenses. For example, California, Hawaii, Alaska, and Connecticut pay some of the highest utility fees in the country. 6 Energy Information Administration, Electric monthly power , Accessed June 6, 2024 Small business utilities 7 Constellation, How to estimate utility costs for a business , Accessed June 6, 2024 can include:

• Electricity and natural gas
• Water and sewer

States with deregulated energy, such as Maine, Ohio, Texas, and Florida, allow shopping around for the best rates, which may lower these costs. The square footage and number of employees you have will increase the cost of your utilities.

7. Marketing and Advertising Budget (7% to 10% of your budget)

Your total budget for marketing and advertising should not exceed 10% if you are starting a small business. It may be tempting to throw everything at marketing to get your business noticed but it isn’t sustainable if you aren’t turning a profit within the first 3 months. 

Alternatively, you could utilize a social media campaign, print advertising, and a website SEO strategy. An often untapped option is public speaking engagements such as community or church events. Depending on your target audience, you could explore speaking opportunities in senior centers, college or university settings, and service groups like your local Lions Club or Rotary Club. 

8. Website Development Costs ($0 to $10,000)

Website development costs will vary greatly depending on your needs and how you go about it. You can use a free website builder and design your own or hire a freelancer or agency to design and build it for you. The latter can cost upwards of $1,000 to $,5000 to build and require thousands in maintenance fees per year.

A website builder is free but you need to pay for your domain name and each integration, such as a payment solution and inventory tracker. If you have little to no experience with web design, it’s a good idea to hire someone to do it properly. An inefficient website can drive away customers. 

9. Office Supplies and Furniture Expenses (10% to 15% of your budget)

The office supplies that apply to your particular business will vary but in general, you can expect supplies to consume 10% to 15% of your budget. In a digital age, we often overlook basic office expenses, especially for online businesses or a paperless workplace. Keep in mind that pens, notepads, desks, chairs, tablets, and computers are all expenses you’ll need to consider. Even software subscriptions for collaborative environments, data processing, and presentations can add up quickly. 

A traditional office environment will include printers, ink, printer paper, whiteboards, a phone or headset, a breakroom coffee maker, a microwave, and mugs. A high-cash environment or expensive retail store will need a safe and other security features such as blast-proof windows, cameras, and a security monitoring system. 

10. Professional Consultation Fees ($300 to $5,000 per year)

Professional consultants include CPAs and lawyers. The cost can range from $75 to $400 per hour. It may seem like a big cost but investing in professional help can save you more in the long run.

An accountant can ensure you are tax compliant and provide guidance on what business structure to choose. They can also provide tax preparation and accounting services and help limit your tax liability by ensuring you claim and deduct everything that applies to your business, including startup expenses. 

A lawyer can also help with business structure, especially if you plan to incorporate. They can also help if you have legal concerns, such as copyright infringement .

11. Payroll Expenses (30% to 80% of your budget)

Employees make up a substantial cost in any business, often around 30% to 80%. This can feel hard to take at the beginning when you aren’t making money but they play a vital and important role in your business. 

The average employee actually costs 1.2 to 1.4 times their salary in ‘hidden’ costs such as required insurance premiums, the cost of background checks, administrative hiring costs, and the cost of training. 8 SBA, How much does an employee cost you , Accessed June 6, 2024 The good news is there are tax savings that accompany hiring staff. Talk to your accountant or the Small Business Administration about potential tax savings and options.

12. Insurance Premiums ($40 to $147)

Your monthly insurance premiums will cost between $40 and $147 a month. 9 Insureon, Small Business Insurance Costs , Accessed June 6, 202410. Your insurance startup costs will depend on the business type and regional requirements. You may be able to save by bundling your insurance policies under one provider and paying yearly rather than monthly. Insurance premiums are considered a part of your small business administration.

General liability insurance is a common choice for many small businesses and usually costs about $42 per month. If you have employees, you’ll need Workers Compensation Insurance 10 Insureon, Workers compensation state laws , Accessed June 6, 2024 which averages about $45 per month.

Other common insurance types include commercial property insurance at $67 per month and commercial auto insurance at $147 per month. 

13. Taxes (varying costs)

The taxes are variable startup costs that differ by region, business type, and business structure—sole proprietors pay according to their tax bracket and corporations are taxed at 21%. Taxes are a hidden cost for many small business owners because they don’t always know the tax laws in their area nor the taxes applicable to their type of business. 

Learn about the taxes you need to charge your customers and pay come tax time, such as state sales tax or excise tax to prevent high penalties come tax time. You can count on paying Self-Employment Tax at 15.3% which covers your social security and medicare insurance. 

Keep in mind you can deduct startup costs, depending on your business type.

To calculate your business startup costs, start by making a list of all your expenses, including small business administration costs. Put them into one-time and ongoing expense categories. One-time expenses are things like equipment, such as a computer or tool needed to manufacture your product. Ongoing or recurring expenses include things like your rent, utilities, payroll, and office supplies.

Next, estimate the cost for each. Consider the long-term value of purchasing a quality product once versus a cheaper product that will fall apart sooner and require you to purchase a replacement within the year. It’s a good idea to round up and add a buffer for inflation, taxes, and fees. 

Next, add up the expenses in both categories. You should budget enough to sustain your business for at least 1 year past your target launch date, not from the date you calculate your start-up costs.

Finally, run your numbers. Keep in mind some of these costs can rise unexpectedly from things like inflation and supply-chain issues. Use the results to determine your pricing model.

Small business owners use a cost sheet to make up part of the business plan and attain financing. Therefore, it’s important to be realistic about each of your estimated startup costs.

Small business owners can help to lessen your overall startup costs by making strategic choices. Here are a few examples of ways to save on startup costs. 

Obtain Financing

To obtain financing, first determine the kind of business loan you need. Review your credit score and itemize the value of any collateral you have. Next, explore all your business loan options before making any decisions. A traditional bank or credit union business loan is often a first choice for a prospective business owner but you should also look into the government funding programs through the small business administration, an asset loan, business line of credit, or investment partners.

Finally, carefully consider the interest rate, duration, balloon payments, and other terms of the loan. It’s important to get enough to sustain you for 1 to 3 years or longer, depending on the type of business you want to start. However, it’s more important not to overextend yourself.

Apply for a Business Credit Card

A business credit card offers three main benefits. It helps you build credit for your business and you can usually gain a higher limit than you would with a personal credit card. A business credit card can also help keep all your work-related purchases in one location, making your bookkeeping process more streamlined. 

Use Accounting Software

Accounting software can help you streamline your process and simplify tax time. FreshBooks accounting software does more than offer comprehensive cloud-based bookkeeping software. It has a full suite of features that can provide support to your small business and help it grow. Features include email and banking integrations, invoicing, and payment solutions.

Review Your Costs Monthly

Each month, review your costs and your revenue, including your small business administration costs. Look for areas where you can cut back on expenses and carefully consider your price point to see if you should raise or lower your prices. 

Roll Out Slowly

It’s tempting to put it all out there at once but there are many benefits to rolling out your product slowly. For example, a retail company making shirts is better off choosing a small number of styles and colors and adding more after six months or a year. This limits your overhead—you don’t have bolts of fabric in multiple colors or unsold inventory taking up space. It also gives you an opportunity to get customer feedback and pivot accordingly. 

Knowing how to estimate and anticipate the startup costs of starting a business can help you on your entrepreneurial journey. A strong business plan and comprehensive budget can help your business survive until you can enjoy your business profits, and effective cost-management techniques will give you the support you need to enjoy a successful career as a business owner. Utilize professionals to help you avoid legal and tax pitfalls. Use accounting software to help streamline your business processes and make tax time simpler.

Article Sources

• IRS, Business Structures , Accessed June 6, 2024
• SBA, Register Your Business , Accessed June 6, 2024
• Commercial Edge, National Office Report , Accessed June 6, 2024
• BDC, Expensive US Commercial Real Estate, Accessed June 6, 2024
• Biz Journal, Cities with the most affordable office space , Accessed June 6, 2024
• Energy Information Administration, Electric monthly power , Accessed June 6, 2024
• Constellation, How to estimate utility costs for a business , Accessed June 6, 2024
• SBA, How much does an employee cost you , Accessed June 6, 2024
• Insureon, Small Business Insurance Costs , Accessed June 6, 2024
• Insureon, Workers compensation state laws , Accessed June 6, 2024

Sandra Habiger, CPA

About the author

Sandra Habiger is a Chartered Professional Accountant with a Bachelor’s Degree in Business Administration from the University of Washington. Sandra’s areas of focus include advising real estate agents, brokers, and investors. She supports small businesses in growing to their first six figures and beyond. Alongside her accounting practice, Sandra is a Money and Life Coach for women in business.

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Free Startup Plan, Budget & Cost Templates

By Kate Eby | September 12, 2017

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A business plan describes how a new business will meet its primary objectives over a given period of time. It is both a strategic document that can act as a roadmap and a tool for securing funding and communicating with stakeholders. For a startup business, planning is key to developing a thorough understanding of the target market, competition, market conditions, and financing opportunities.

Included on this page, you'll find a variety of helpful, free startup business planning templates , like a SWOT analysis template , a competitive analysis template , a business startup checklist template , and more.

Startup Business Planning Templates

Competitive analysis template - excel.

Download Competitive Analysis Template

Excel | Smartsheet

Analyze multiple competitors based on the categories you want to compare, and use the results to identify your top rivals. This template contains several sheets to provide a comprehensive look at how your startup stacks up to the competition, the strengths of each company, and potential partnerships or opportunities.

SWOT Analysis Template - Excel

Download SWOT Analysis Template

While researching your business plan, both risks and opportunities are likely to arise. This critical information gives you the chance to plan for how you will take advantage of or address them as needed. A SWOT analysis helps you identify and gain a clear understanding of internal strengths and weaknesses as well as external opportunities and threats. The results of the analysis will inform your business goals and strategies for reaching them. Once completed, you can add this SWOT template to a startup business plan or use it as a planning tool. If this template doesn’t have the details you require, you can find more of our  free SWOT Analysis Templates .

Marketing Plan Template - Excel

Download Marketing Plan Template

Easily create a detailed marketing plan for different campaigns, including projected and actual costs. It also doubles as a marketing calendar template, showing a weekly, monthly, and quarterly breakdown of your timeline and initiatives. A marketing plan is typically part of a business plan, but you can use this dedicated template for developing a thorough plan and schedule.

Business Startup Checklist Template - Excel

Download Business Startup Checklist Template

This template offers a simple checklist to help you organize all of the tasks that need to be accomplished, from initial research and planning to establishing professional partnerships and acquiring necessary permits. Edit the list to include relevant actions for a particular business. This is an easy way to ensure that important items are not overlooked and prioritize steps.

Business Planning Schedule - Excel

Download Business Planning Schedule

This template allows you to create a schedule for tasks with a visual calendar for planning. This layout can help you organize your planning process and provide a timeline for reaching certain milestones. The template is structured around planning stages, allowing you to separate tasks hierarchically. To use this template for another planning process, simply edit the tasks included and add your dates to the schedule.

Target Market Comparison Template - Excel

‌ Download Target Market Comparison Template - Excel

Utilize this worksheet to compare target markets in order to understand which are ideal for your product or service. Understanding your customers is vital not only for developing effective strategies, but also for showing investors that you’ve done the necessary research and understand how to reach potential customers.

Startup Business Plan Template - Word

Download Startup Business Plan Template

Word  | Smartsheet

This template offers a traditional outline for creating a business plan document. You’ll find sections for an executive summary, company description, marketing plan, product and operational information, financial data, and room for appendices. You can refine the plan to suit different industries and business types. For example, if you want to create a technology startup business plan template, you will want to show how the startup will deal with rapidly changing markets, and provide product and market research that shows how your business will be on the cutting edge. You may also need to provide longer-term financial projections since high-tech startups often operate for an extended time without profits. 

For additional resources, visit " Free Startup Business Plan Templates and Examples ."

One-page Business Plan Template - Word

Download One-page Business Plan Template

Excel  |  Word  |  PDF  | Smartsheet

Create a streamlined business plan document on a single page with this Word template. A simplified plan can be helpful for summarizing information into a brief report. This format gives readers a quick overview of your startup business plan while emphasizing key points. 

For additional resources, visit " One-Page Business Plan Templates with a Quick How-To Guide ."

Startup Financial Templates

Small-business budget template - excel.

Download Small-Business Budget Template

This basic budget is ideal for small businesses that want an easy, blank template to customize. To create a business budget, include both fixed and variable expenses along with revenue and funding sources. Use this template to track expenditures and revenue, maintain a balanced budget, and to help grow your business.

Sales Forecast Template - Excel

Download Sales Forecast Template

With this template, you get a 12-month sales forecast as well as sales data from prior years. You can organize the spreadsheet based on product names, target customers, or other categories, and then enter forecasted monthly sales, including adjustments for seasonal changes or other factors that might impact sales. The template also calculates monthly and yearly totals.

Business Startup Costs Template - Excel

Download Business Startup Costs Template

Startup costs begin to accrue before operations begin, so it’s important to determine expenses early on to avoid being underfunded or overspending. This startup costs template shows a summary of both funding and expenses at the top, with itemized details below. You can use this worksheet to outline expenses, create a tentative budget, and compare actual costs as they accrue. Similar to a start up budget template, this version helps you focus on expenditures.

Startup Budget Template - Excel

Download Startup Budget Template

A startup budget is an important tool for identifying what financial resources are available, determining how much revenue is needed to meet business goals, and pinpointing areas where you can save money. A budget works as a planning tool as well as a method for tracking actual expenditures. As part of a business plan, it supports the process of pitching to investors and completing loan applications. This budget template is geared toward startup companies and includes a section for projected monthly costs.

Startup Financial Projections Template - Excel

Download Startup Financial Projections Template

Similar to a pro forma template for startups, this version includes a 12-month profit and loss projection, a balance sheet, and a cash flow statement. Use the template to analyze the current financial standing and run a future forecast for a business. The spreadsheet includes pre-populated fields with expenses and income sources, which you can easily edit to accommodate your business.

Personal Financial Statement - Excel

Download Personal Financial Statement

Some lenders may require a personal financial statement in addition to relevant business data. This template lists assets and liabilities in order to calculate net worth. You’ll also find space for adding a signature so you can certify that the information is correct.

Balance Sheet Template - Excel

Download Balance Sheet Template

This template can be modified to either show an opening day balance for a startup or to create a projected balance sheet. Choose a given time period, enter your numbers for assets, liabilities, and equity, and the template will provide automatic calculations.

First-Year Budget Calculator - Excel

Download First-Year Budget Calculator

Combining business and personal budget information into a single template can be useful for small business owners who are just getting started. This template focuses on first-year budget calculations including startup costs, operating expenses, estimated income, personal expenses, and more. You can identify fixed and recurring costs for a full view of expenses for the first year.

12-Month Cash Flow Forecast - Excel

Download 12-Month Cash Flow Forecast

This template shows all 12 months of the year for a monthly and annual cash flow forecast. In addition to creating a forecast, you can compare actual cash flow totals for each month. The template is divided into categories for cash on-hand, cash receipts, and cash paid-out, with an alternating color scheme for easy viewing.

Annual Business Budget Template - Excel

Download Annual Business Budget Template

As a startup becomes established, this template can be used to create a budget showing totals on a monthly, quarterly, and annual basis. You can create a projected 12-month budget as well as compare financial data to the previous year’s performance. The template provides detailed income and expense categories for thorough planning and tracking.

Financial Dashboard Template - Excel

Download Financial Dashboard Template - Excel

Create a visual financial report with this dashboard template, which tracks statistics over time using graphs and charts. Compare sales rep performance, product revenue, regional data, or other financial KPIs. A graphical report provides a quick overview of financial information in a format that is easy to understand and share with stakeholders.

Marketing Budget Plan - Excel

Download Marketing Budget Plan

Create a dedicated marketing budget with results displayed in both a spreadsheet format and pie chart. Calculate costs for various marketing campaigns in order to view fund allocation. The template includes space for comments and notes to aid in strategic business planning.

Website Budget Template - Excel

Download Website Budget Template

This startup website template provides sections for calculating initial development costs as well as creating a projected budget over three years. View a list of costs and benefits to see how the website will impact the business over time. This template can help you determine the value of your website investment and track actual annual performance.

Loan Amortization Schedule - Excel

Download Loan Amortization Schedule

Keep track of a loan balance, payments made, upcoming amounts due, and interest paid with this loan amortization template. Enter lender information and loan terms at the top of the template, and then use the schedule to track payment details. Startups owners will appreciate how easy it is to manage business loans and create repayment plans.

Why Write a Startup Business Plan?

The benefits of writing a startup business plan range from clarifying initial ideas to attracting potential investors. The process of business planning can help uncover weaknesses as well as opportunities you may have overlooked. Planning encourages entrepreneurs to examine each step required to start a business in order to avoid mistakes in the long run. Collecting data through market analysis can allow you to confidently make informed decisions and provide a dose of reality to your business idea by affirming or challenging initial assumptions about your product, business model, or strategies for achieving success. Once you clarify your startup vision, analyze financial and market data, and define goals, you can create a strategic action plan to use as a guide for reaching objectives and addressing potential challenges. 

After establishing a startup, continue business planning to identify ways to grow and improve the business as well as to plan for resource use and development. If you treat your business plan as a living document that you regularly review and update, you can also use it to measure progress over time. An effective plan communicates a company’s vision to team members and all stakeholders, and provides both a foundation and an adaptable model that can grow and change along with the business.

One key reason for startups to develop sound business plans is to convince investors and lenders to finance the endeavor. Most banks and investors will want to see detailed financial projections and a statement of your current personal and business financial standing. Investors may want to see market data and other proof that your plan has a high chance for success. Without adequate financing, no startup can succeed, so it’s essential to create an ironclad pitch for funders.

What to Include in a Business Plan

Business plans are tailored to fit a specific type of business and to serve a particular purpose, whether it’s to seek funding, influence a particular audience, or develop strategy for internal use. While you’ll need to continually revise plans need to fulfill a certain function, there are similar elements in all business plans. Here are some of the common sections included in a startup business plan:

• Summary and Objectives: This first section can provide background information, a detailed company description, general industry information, goals that you want to achieve, and long-term objectives. Depending on the size and type of business, this information may be divided into multiple sections or summarized in one pitch. 
• Marketing Plan: Providing market data and an outline for how you will market and sell products and services allows you to show a deep understanding of your target audience and your plans for branding and distribution. Be sure to conduct thorough research that you can use to back up your plans with supporting numbers and statistics. You may also include separate, detailed sections on competition, customer characteristics, product features, sales forecasts, and marketing strategy.
• Operational Plan: This section is concerned with the equipment, processes, and people involved in daily operations. You may want to include details on location requirements, production methods, legal issues (such as licenses or insurance requirements), staffing information, vendor needs, and other operational elements. 
• Management and Organization: A description of management positions and professional advisors provides an organized look at key roles, the experience individuals bring to the business, and important consultants or mentors. You can also include resumes for key employees and startup owners if the business plan is supporting a loan application or investor pitch.
• Startup Expenses and Financial Plan: Estimate expenses as accurately as possible and include contingencies for unforeseen costs. Creating estimates requires thorough research, and expenses should include even small items - while they are easy to overlook, they may add up to significant costs. A comprehensive financial plan can include profit and loss projections and other budget forecasts in order to provide a clear picture of a startup’s financial standing and future outlook. 

A business plan will, of course, look different for a restaurant, web-based business, technology service provider, or product manufacturer. Before getting started, consider what you want to accomplish with your business plan, and customize it accordingly.

Business Plan Tips

Taking the time for thorough research and planning can help you make informed decisions, avoid potential pitfalls, and craft an effective plan. Here are a few tips to consider as you create a business plan:

• Get Creative: Business plans can follow a simple outline, but turning your plan into a creative presentation can make a statement and grab investors’ attention. 
• Use Data Wisely: No matter what format or approach you take, a startup business plan should be concise and include compelling evidence and hard data to back up your claims. 
• Refine Your Plan: Consider your audience and review your plan to ensure the information presented is appropriate, sufficient, and clear. 
• Focus on Objectives: Connect every strategy to core objectives so that there is a clear path for attaining success. 

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Business startup costs calculator

Learn and calculate all the startup costs that go into launching a business., startup cost calculator.

What exactly is Ramp?

Ramp is an all-in-one card, bill pay, and expense management solution. We simplify how your company spends money and highlight wasteful spend. Duplicate software licenses, monthly plans you should switch to annual, over $350,000 in pre-negotiated partner discounts – all designed to save you time & money.

Starting a new business can be an exciting and rewarding experience, but it also requires careful planning and financial management. One of the essential aspects of starting a business is calculating the startup costs. This process can seem overwhelming, especially if you're not familiar with the various expenses involved. In this article, we'll discuss how to calculate start up costs for your new business, provide common costs to plan for, and offer tips to save money during the start up process.

How to calculate the cost of starting a business

Calculating startup costs is crucial for any new business. The first step is to determine what kind of business you want to start and the type of expenses that will be required to help you determine the costs involved.

• Determine your business model: The cost of starting a business can vary widely depending on the type of business you plan to start. For example, a service-based business may have lower costs than a manufacturing business. Therefore, it's important to determine your business model, draft a business plan and understand the unique costs associated with it.
• Create a list of startup expenses: Make a comprehensive list of all the expenses you'll need to pay before your business can begin generating revenue. This may include everything from rent and utilities to marketing and legal fees. Be as thorough as possible and do your research to ensure you don't overlook any critical expenses.
• Estimate the costs of each item: Once you have a list of expenses, it's time to estimate the cost of each item. This may involve researching the cost of office space in your area, getting quotes from equipment suppliers, or consulting with a lawyer or accountant.
• Add up your estimated costs: After estimating the costs of each item on your list, add them up to get a total estimate of your costs.
• Consider ongoing expenses: In addition to startup costs, it's important to consider ongoing expenses such as rent, utilities, and employee salaries. This will give you a better idea of the total cost of operating your business over the long term.

By accurately calculating the cost of starting your business, you can create a realistic budget and financial plan that will help you manage your finances and make informed decisions as your business grows. Ramp’s startup cost calculator can also help with all these steps to help you throughout this process.

10 common startup costs to plan for

Starting a business involves many different costs, and it's important to plan for these in advance. By considering the common monthly and one-time business expenses listed below, you can develop a more accurate budget and better prepare your business for success. Here's a breakdown of the common startup costs to plan for, including some examples:

Office space

Renting office space is one of the largest expenses for many businesses. Depending on your business needs, office space could include a storefront, a warehouse, or a co-working space. You'll need to consider the location, size, and layout of the space, as well as the associated costs such as utilities and internet.

Equipment and office supplies

Equipment and supplies are essential for many businesses. This could include anything from computers and phones to machinery and tools. Consider the cost of purchasing or leasing equipment, as well as the ongoing cost of office supplies such as paper, pens, and printer ink.

Rent and utilities

In addition to office space, you'll also need to consider the cost of monthly rent and utilities. This could include rent for a storefront, warehouse, or other commercial space, as well as the cost of electricity, water, and internet.

Permits and licensing

Depending on the type of business you're starting, you may need to obtain permits and licenses from the local and state government. These can include business licenses, permits to operate in a certain location, and health and safety permits.

Business insurance

Business insurance can help protect your business in case of accidents, liability claims, or other unexpected events. The insurance needs of a startup can also depend on various factors, such as the business type, industry, size, and level of risk.

Lawyers, accountant, consultants

Many businesses will require the help of legal, accounting, or consulting professionals. This could include lawyers to help with contracts and legal compliance, accountants to help with bookkeeping and tax planning, or consultants to help with business strategy and planning. It’s important to consider various legal fees that may come up.

Product and inventory

If you're starting a small business that involves selling products, you'll need to consider the cost of purchasing or producing those products. This could include the cost of raw materials, manufacturing, and storage.

If you plan on hiring employees, you'll need to consider the cost of salaries, benefits, and payroll taxes. This could also include the cost of recruiting and training new employees.

Marketing and market research

Marketing and market research are essential for getting the word out about your business and understanding your target audience. Consider the cost of advertising, social media, and other marketing efforts, as well as the cost of conducting research.

A website is an essential part of many businesses, and a domain name is required for that website. Consider the cost of purchasing a domain name and setting up a website.

To give you a better idea of the costs involved, let's take a closer look at the average costs in various industries.

Average costs based on the industry

When starting a new business, it's important to have a good idea of the costs associated with your particular industry. Here's a table that provides some average costs based on industry:

This table was compiled using data from various industry sources, including the Small Business Administration (SBA) and industry associations. 

Note that these costs are only averages and can vary significantly depending on the specific needs of your business. It's important to remember that these are only estimates, and your actual costs may be higher or lower depending on your specific circumstances. Therefore, it's important to do your own research and create a budget that reflects your unique situation.

Tips to save money during the startup process

Starting a business can be expensive, but there are ways to save money during the startup process. Here are some ways to save money:

• Negotiate prices: Talk to suppliers and vendors to negotiate better prices.
• Stay on budget: Make a budget and stick to it.
• Avoid maverick spending: Do not spend money on items that are not necessary for your business.
• Monitor travel expenses: Track your travel business expenses and find ways to reduce operating costs .
• Apply for grants: Look for grants and alternative funding opportunities to help cover costs.
• Use free tools: Use free tools and resources instead of paid ones.
• Control spending: Monitor spending and find ways to reduce costs.
• Marketing Costs: Leveraging social media can be a cost-effective way for a new small business to reach a wider audience and save money on advertising expenses.
• Use tax write-offs: Take advantage of tax write-offs to reduce your overall costs.

How do I use tax write-offs to save on my startup costs?

When calculating startup costs, it's important to consider potential small business tax deductions that can help reduce your expenses. Here are some common expenses that may be deductible on your tax forms:

• Home office expenses: If you are starting your business from home, you may be able to deduct a portion of your rent or mortgage, utilities, and other expenses as a home office deduction.
• Business equipment and supplies: The cost of equipment and supplies, such as computers, software, and office furniture, may be deductible on your tax forms.
• Legal and accounting fees: If you've paid for legal or accounting services to set up your business, you may be able to deduct these costs on your tax forms.
• Travel expenses: If you've traveled for business purposes, such as attending a conference or meeting with a client, you may be able to deduct your travel expenses, including transportation, lodging, and meals.
• Marketing expenses: Costs associated with advertising and promoting your business, such as website design and hosting, business cards, and brochures, may also be deductible on your tax forms.

It's important to note that there are specific rules and limitations for each of these deductions, so be sure to consult with a tax professional or refer to the IRS website for guidance. Keeping accurate records of all expenses related to your business startup is crucial to ensure you are able to take advantage of any potential tax write-offs.

How Ramp can help startups grow

Ramp can be a valuable resource for startups. With Ramp, you can use our business startup cost calculator to estimate your expenses. We can also help with other financial needs as you grow your business, such as startup accounting software , expense management, and financial insights.

Starting a business requires careful planning and preparation. By calculating your costs and planning for common business expenses, are a few steps that can help set you up for long-term success.

Time is money. Save both.

Startup costs include expenses incurred before a business generates revenue, such as equipment, rent, utilities, legal and accounting fees, marketing and advertising expenses, and inventory.

Costs associated with purchasing an existing business, research and experimentation expenses, and intangible asset costs cannot be deducted. If you do not start the business, incurred startup costs are also not deductible.

You can calculate startup costs by conducting market research, creating a business plan, consulting with a financial advisor, or using a startup cost calculator or template.

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5 easy steps to determine your startup costs

Launch your business on solid financial ground and plan ahead for unexpected issues by calculating your startup expenses with this five-step guide. Presented by Chase for Business .

When you’re planning to launch a business, it’s easy to get lost in the numbers. Getting a clear picture of how much startup money you will need is essential to help avoid cash-flow  problems until your business starts turning a profit.

When you have a handle on your expenses, you can get the funding you need , plan for business growth and much more. Find out how to calculate startup costs for your small business in five steps.

Why do I need to know my startup costs?

Calculating your startup costs gives you more than just peace of mind. Knowing how much money you need to get started can help you:

• Write your business plan. Every startup needs a business plan that includes a complete list of expenses. The financial portion of your business plan should include both costs and assets. From there, you can calculate whether you need funding and when you’ll make a profit.
• Plan for growth. Once you map out your finances, you can create a strategy for business growth. Knowing your costs is essential for determining when you can afford to develop new products, hire a bigger team or open a new location.
• Apply for funding. Whether you want to set up a line of credit or get a Small Business Administration (SBA) loan, most lenders will ask about your costs. With your list of expenses and assets, you can clearly show why you need to apply for funding .
• Seek out investors. If you’re aiming to partner with investors or venture capital (VC) firms, you need detailed financial data. Investors often ask to see your startup costs and expenses to calculate how soon they can make their money back.

How to calculate startup costs

Adding up the costs to launch a small business takes both research and math. Follow these five steps to assess your startup expenses.

1. Identify your expenses

Start by writing down the startup costs you’ve already incurred — but don’t stop there. Research the expenses you’re likely to come across as your company gets closer to launching. Think about these standard startup costs:

• Business registration fees:  Unless you’re a sole proprietor , you need to register your business with the state. Most startups have to choose a business structure and file paperwork with the Secretary of State.
• Business licenses:  Many states require certain types of businesses to be licensed. For example, you might need to pay for a license if you broadcast online or on TV, or if you care for children or pets.
• Equipment:  Most businesses need some type of equipment to manufacture products or handle everyday tasks. Add up your company’s expenses for items like computers, smartphones, vehicles and production systems.
• Supplies:  Most businesses also buy necessities ranging from pens and paper clips to printer paper and cartridges.
• Consultants:  Account for the fees you might be paying another company to provide advice or help develop a strategy. Other examples include working with a management analyst or a recruiting expert.
• Payroll:  This amount should include what you pay your employees and your management team as well as yourself.
• Insurance:  Calculate both health insurance costs and any business insurance you need.
• Office:  Whether you rent office space or pay for a warehouse, note these costs.
• Inventory:  If your business sells products, account for the cost of keeping inventory in stock.
• Marketing:  Project your potential costs for marketing your business. Yours might include social media management, partnering with influencers or advertising through traditional channels like radio, print or TV.
• Website:  Remember to account for the cost of developing and maintaining your website as well as for creating content for it.
• Taxes:  Every business pays income tax. Depending on your business, you may also pay sales tax or payroll tax.
• Accountant:  Businesses of all sizes often depend on accountants to balance the financial books, prepare tax returns and produce reports.
• Legal:  Factor in the fees you pay an attorney to write contracts or to help you comply with industry regulations.

2. Estimate your costs

Once you’ve developed a list of your business needs, note the average cost for each category.

Check with the government offices in your state to determine business registration and license fees. To estimate the costs for equipment and supplies, you can shop online or request a quote from a vendor.

For other standard costs, you might choose to set aside a percentage of your total budget. For example, many startups budget up to 10% for marketing and at least 20% for business taxes.

3. Do the math

After estimating your costs, divide the list into one-time and ongoing expenses. Make sure all ongoing expenses reflect a monthly average. Add up your one-time expenses and multiply your ongoing expenses by the number of months until you launch.

The total represents your estimated startup expenses. For example, your list might look like this:

One-time expenses

• Business registration fees
• Business licenses

Ongoing expenses

• Consultants

4. Add a cushion

Even with a business plan in place, your startup could experience delays and setbacks. Make sure you have enough funds to keep your startup afloat by giving your expenses an extra cushion. Consider budgeting enough to sustain your business for up to 12 months beyond the target launch date.

5. Put the numbers to work

Finally, run your calculations. Factor in fixed and variable costs to help establish a pricing structure for your products and services. Include your startup costs in your business plan to help estimate when your company will become profitable. You can also use your expense sheet to see what kind of financing options are available  for you from banks, investors and VC firms.

Start your business on solid footing

Launching a business requires you to follow a disciplined path with countless twists and turns. You can increase your chances of winning the game of startup by taking the time to calculate your costs and manage your business expenses. 

Meet with your local business banker  to see how opening a business bank account  can help you get started on the right foot.

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Data from reputable organizations like the U.S. Chamber of Commerce and Kaufman Foundation reveal a sobering truth: a significant number of businesses falter and fail within their first few years. One of the critical reasons behind this high failure rate is an inadequate understanding of startup and operating costs. Businesses often stumble due to undercapitalization, inefficient budgeting, and unrealistic financial planning, directly linked to a lack of comprehensive startup and operational cost analysis.

By offering a detailed exploration of startup and operating costs, we aim to equip you with the knowledge and tools necessary for accurate financial assessment and planning. This step is about fostering a deep understanding of the financial framework your business operates within. 

With this comprehensive guide, you’ll gain the insight needed to make informed decisions, set realistic budgets, and price your products or services appropriately. Ultimately, this understanding can be the difference between a business that merely survives and one that thrives. As we move forward on this detailed roadmap, prepare to arm yourself with knowledge that will crucially impact the longevity and success of your venture.

Pro Tip: 

Review ‘Operations in Detail’: If you haven’t thoroughly examined the ‘Operations in Detail’ step or need a refresher, it’s essential to revisit this step. Understanding the operational aspects of your business is critical before you can accurately assess the financial implications.

Understanding Costs

Challenges in startup finance.

Navigating the financial aspects of starting a business is a complex task, often riddled with challenges that can significantly impact the success and sustainability of the venture. In this step, we address some of the most common financial hurdles entrepreneurs face and provide guidance on how to overcome them.

Key Takeaways: Financial Hurdles

• Undercapitalization: Many startups underestimate the capital required to launch and sustain their business until it becomes profitable. This oversight can lead to a cash flow crisis, with the business running out of money prematurely.
• Inadequate Budgeting: A clear understanding of cost structures and operating expenses is vital. Without it, creating an accurate budget is challenging, often leading to over or underspending in critical areas.
• Pricing Issues: Properly setting prices for products or services is crucial. Misjudging costs can result in uncompetitive pricing or, worse, selling at a loss.
• Poor Financial Planning: Comprehensive knowledge of startup and operating costs is essential for realistic financial projections, crucial for effective decision-making and strategic planning.
• Difficulty in Securing Funding: Detailed financial plans and cost analyses are typically required by investors and lenders. Inability to provide this information can make securing necessary funding challenging or, more likely, impossible.
• Operational Inefficiencies: Without a clear grasp of operating costs, identifying areas for cost reduction or efficiency improvements can be difficult, leading to wasteful practices.
• Risk of Business Failure: Ultimately, a lack of understanding of the full financial picture significantly raises the risk of business failure, particularly in the crucial early stages of operation.

Categories of Startup Costs

Your startup costs is the capital you spend before you open your doors to customers and can be broadly categorized into assets, expenses, and working capital, each with its own set of subcategories. It’s crucial to consider various aspects like lease vs. buy decisions, supply ordering strategies, and staffing choices. The following gives an overview of of startup assets, expenses, and working capital: 

Startup assets for a pre-revenue startup are the tangible and intangible resources acquired to create a foundation for the business’s operations and growth. These assets include physical items like equipment and inventory, as well as intellectual properties and digital assets, which provide long-term value and contribute to the startup’s capability, unlike startup expenses that are consumed or depleted through the initial setup. Subcategories for startup assets often include: 

Tangible Assets

• Real Estate: Land and buildings.
• Equipment: Machinery, computers, office equipment.
• Vehicles: Cars, trucks, or vans used for business purposes.
• Furniture and Fixtures: Desks, chairs, lighting, shelving.
• Inventory: Stock of products for sale.
• Equipment: Computers, tablets, servers, displays, phones, printers.
• Safety and Security Equipment: Surveillance cameras, alarms.

Intangible Assets

• Brand and Intellectual Property: Trademarks, patents, copyrights.
• Software and Technology: Custom software, tech tools, digital assets.
• Goodwill: Value attributed to acquiring a brand, its reputation, and its customer relationships.
• Non-Standard Licenses and Permits: Specific industry-related licenses where the license has a value if the business was sold (e.g., liquor license, cannabis license).

Other Assets

• Refundable Deposits: Security deposits for utilities or rent.

Expenses:  

Startup expenses for a pre-revenue startup are the initial outlays necessary to establish and prepare the business for operation, including legal and administrative setup, securing a location, initial marketing, and workforce preparation. Unlike startup assets, which are tangible and intangible items of value the business owns, these expenses are one-time costs primarily aimed at setting up the business infrastructure and operational framework, without residual value or future liquidity. Examples of common startup expense subcategories include: 

Legal and Administrative Expenses

• Legal Fees: Costs for legal advice, company registration, incorporation, patents, and trademarks.
• Licenses and Permits: Fees for obtaining necessary legal permissions to operate.
• Business Planning: Expenses for developing business strategy, model, and plans.
• Consultancy Fees: Expenses for professional services like business consultants, accountants.

Location and Infrastructure Setup

• Broker Fees: Initial payments and fees for securing a business location.
• Utility Set-Up Fees: Initial fees for setting up essential utilities like electricity, water, and internet.

Insurance and Risk Management

• Insurance Deposits: Initial deposits for various business insurance policies.
• Business Insurance Premiums for First Term: Initial premium payments for business-related insurance policies.

Marketing and Branding

• Branding: Costs for creating brand identity, including logo design.
• Initial Marketing and Public Relations: Costs for establishing initial market presence and public relations efforts.
• Website Development : Expenses for website creation, hosting, and pre-launch maintenance.
• Advertising for Launch: Pre-launch marketing and promotional activities.

Human Resources

• Training Period Salaries and Wages: Compensation for employees during training before business operation begins.
• Pre-Launch Employee Recruitment and Training Costs: Expenses related to hiring and training the initial workforce.

Research and Development

• Market Research: Costs for analyzing market trends, customer preferences, and competition.
• Prototype Development: Costs associated with creating prototypes or initial service models.

Miscellaneous Preparation Costs

• Software and Subscriptions: Pre-operational expenses for business software and service subscriptions.
• Travel and Survey Expenses: Costs associated with market surveys, business location visits, and other pre-operating travel.

Working Capital:  

Working capital for a pre-revenue startup refers to the allocation of cash reserves to cover estimated monthly operating expenses (burn-rate components) and short-term liabilities, along with a buffer for contingencies. This capital is essential to support the startup’s operations through to the point of break-even or until it secures the next round of financing, such as moving from seed to Series A funding, with the amount and duration varying significantly based on the business type and strategy. Common examples of working capital allocations include: 

Cash Reserves

• Initial Funding: Seed capital or initial investment funds obtained through investors, personal savings, loans, or grants.
• Emergency Fund: Additional reserve funds to cover unforeseen expenses or delays in reaching revenue-generating stages.

Monthly Operating Expenses (Burn Rate Components)

• Salaries and Wages: Monthly payroll for employees, including founders and early staff.
• Office Rent and Utilities: Monthly costs for office space, electricity, internet, and other utilities.
• Software and Subscription Services: Regular expenses for essential software, cloud services, and subscriptions necessary for operation.
• Marketing and Advertising: Monthly costs for marketing activities to build brand presence and customer awareness.
• Insurance Premiums: Regular payments for necessary business insurance policies.
• Professional Services: Fees for legal, accounting, and consulting services.
• Research and Development: Ongoing costs for product development, testing, and improvement.

Short-Term Liabilities

• Accounts Payable: Short-term debts or obligations to vendors and service providers.
• Accrued Expenses: Incurred expenses that are recorded but not yet paid.

Buffer for Contingencies

• Contingency Buffer: An additional percentage of the total working capital estimated to cover unexpected costs or delays.

We have developed worksheets for hundreds of common Core Offerings to assist in brainstorming these costs. Download our Startup Cost Worksheet to get started.

Key to Building a Solid Foundation

Feeling overwhelmed.

If you find yourself overwhelmed at this step of estimating startup and operating costs, it might be a sign to revisit earlier steps of the Pre-Planning Process. A thorough and well-executed Business Model Development and Operations in Detail step can significantly ease the burden of this step.

• Revisit Business Model Development: Ensure you have a clear and comprehensive understanding of your business model. This step provides a blueprint that guides your financial planning.
• Review Operations in Detail: A detailed analysis of Key Activities, Key Resources, and Key Partners is crucial. If this step is thoroughly executed, estimating costs becomes a more straightforward research task.

Accurate Cost Analysis

Once you have identified the operational components, research becomes your primary tool. 

Practical Steps in Research:

• For HR costs, utilize platforms like salary.com and Indeed to understand local pay scales and employment benefits.
• Contact vendors and partners for quotes and cost structures.
• Utilize online resources for fixed costs like cloud storage, utilities, and office supplies.

Pre-Planning is a Discipline

• Importance of Granularity: This step demands granularity. Each cost, no matter how small, should be accounted for to build a realistic financial picture.
• Avoiding Premature Adaptations: Remember, this is the Pre-Planning phase. The goal here is not to adapt or make operational decisions based on things you cannot know but to create a solid foundation for your business plan or pitch. Changes and adaptations come later, once you start considering funding methods and adapting to sales, market, or operational realities.

By approaching this step with diligence and attention to detail, you lay the groundwork for a strong and realistic financial plan. This foundation is crucial not only for the initial launch but also for the long-term sustainability and success of your business.

Adjusting for Business Type and Stage

Understanding the distinction between traditional and innovative or new market business ventures is critical when planning startup costs. Each type demands a different approach and perspective on financial planning.

• Traditional Businesses: These are established business models with predictable patterns and well-understood markets. For example, a daycare center needs to consider costs for licensing, facility rental, child care supplies, and staff training. A legal firm has to budget for office space, legal databases, and professional staff. These businesses must think through all elements necessary to become fully operational from the start, aiming for rapid achievement of break-even status.
• Innovative or New Market Ventures: Contrasting with traditional models, these ventures often break new ground or create entirely new markets. For instance, a tech startup developing a unique app may initially focus on costs related to software development, securing intellectual property rights, and market testing. Their startup costs might be leaner if they concentrate on developing a minimum viable product (MVP) and reaching early adopters. The goal is often to demonstrate potential and secure further funding, following milestones like user growth or feature development.

Traditional businesses typically require a comprehensive, all-encompassing financial plan upfront. In contrast, innovative ventures may operate on a more performance-based approach, aligning their financial planning with specific milestones and funding stages like pre-seed or seed rounds.

Recognizing which category your business falls into and planning accordingly can significantly impact the efficiency and effectiveness of your financial strategy.

Tools and Resources for Startup and Operating Cost Attribution

Get your startup and operating cost worksheet.

Efficiently navigate the complexities of startup and operating costs with our comprehensive worksheet, designed to streamline your financial planning process. Available in both MS Excel and Google Sheets formats, this versatile tool offers a structured approach to categorize and calculate various costs.

Analyzing Operating Costs

Day-to-Day Business Expenses

Operating costs form a substantial part of any business’s financial structure. These are the recurring costs necessary for the day-to-day functioning of the business and can be broadly classified into fixed and variable expenses. Additionally, entrepreneurs must account for elements like depreciation, payroll taxes and benefits, and potential interest expenses.

Categorization of Operating Costs

• Fixed Expenses: These are costs that remain constant regardless of business performance, such as rent, salaries (to an extent), and insurance.
• Variable Expenses: Costs that fluctuate based on the level of business activity. Examples include utilities, raw material costs, and commission-based salaries.
• Additional Considerations: Depreciation of assets, payroll-related taxes and benefits, and interest expenses, which may become relevant in cases of debt financing.

Estimation: Implications and Accuracy

• Striving for Granularity: While it’s challenging to perfectly estimate operating costs, aiming for 85% accuracy can significantly reduce financial risks. Many business failures are linked to imprecise cost estimations, leading to the issues highlighted previously. If you aim to get a solid B+ here and have allocated a portion of your working capital for emergency funds and contingencies, you’ll be in a much better position to handle what actually happens in the market. 
• Importance of Detailed Planning: We provide worksheets based on common Core Offerings to assist in thinking through various Cost Structure categories. Access our Operating Cost Worksheets to facilitate thorough planning.

Strategies and Considerations

• Early-stage Cost Considerations: In the initial phases, certain expenses might be higher. For instance, hiring competent employees from the outset often means paying higher salaries. Similarly, ordering smaller quantities of supplies or products can result in higher per-unit costs.
• Industry Averages as Reference Points: While comparing costs with industry averages can be insightful, it’s important to remember that these may not always be applicable, especially for startups or innovative ventures where the cost dynamics can be quite different.

Special Note: Innovative or New Market Ventures:

• Lean Approach to Fixed and Variable Costs: These businesses often plan operating costs with a lean approach, focusing only on the essentials necessary to reach the next phase of development.
• Understanding Burn Rate Schedules: Particularly in pre-seed or seed rounds, understanding and managing the burn rate – the rate at which a company is spending its capital – is crucial. This schedule helps startups plan how long they can operate before needing additional funding, ensuring that they remain solvent while pursuing growth or development milestones.

A thorough and detailed approach to outlining operating costs not only lays a solid foundation for current operations but also prepares the business for future financial strategies and funding phases. This step is about outlining costs with precision and foresight, setting the stage for sustainable growth and successful funding endeavors.

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Written by Kevin Conner | July 18, 2022

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Many aspiring business owners don’t know where to get started. They have a vision, but thinking about marketing, hiring, product development, and more can become overwhelming. In most cases, the best place to start is crunching the numbers—determining your business startup costs.

Without a budget, you can’t make good decisions, and you can’t make a budget without understanding your expenses.

So to help you keep your business from being one of the many that go under each year, we wanted to outline some examples of typical startup costs so you can better budget your business and know what to expect. After consulting this cost checklist, you should be able to determine a forward plan of action for your new enterprise.

Note that we wanted to focus mostly on online  businesses, but other businesses can still greatly benefit and do some quick adjustments and research to make sure they’re on the right track as well.

Business Startup Costs

Supplies, furniture, and office space, marketing and web presence, inventory and production, fees, taxes, and licenses, having a backup fund, setting up your budget, paying yourself adequately.

You need to be able to support yourself without hurting yourself. If you cut corners in your own personal life (by deeply cutting your salary), it can affect your physical and mental health, which can be a contributing factor to business failure. The Global Benefits Attitudes survey shows a clear link between reduced workplace productivity and increased stress levels. Don’t sell yourself short, and don’t try to cut your own salary first.

Review the real cost of living in your area and be honest with yourself about what you would be comfortable with. Be sure to add health insurance and other benefits (for yourself and your household, if applicable) into that equation.

This is your business. Your personal well-being is a core need to consider. When calculating your salary needs, include:

•        Rent or mortgage payments •        Utility costs •        Child care costs •        Property, luxury, excise, and other taxes •        Insurance (car, home, and/or other) •        Vehicle payments or maintenance costs •        Debt or credit card payments. •        Groceries •        Entertainment costs •        Gifts •        Clothing

Your payroll for your business, especially an online business, can be a complicated item on your startup costs list. As a general rule, payroll is the greatest startup cost for a business. Fundera  considers it to be 25-50% of a total budget.

At the same time, your employees, if you have any, will make or break your business.

An online business has many options and few constraints. It might be in your best long-term financial interest to have someone on your permanent payroll. But you almost never need onsite employees, and you can look to the growing pool of remote workers .

There’s a strong possibility that you’ll want to use freelance help as you start your business, as there are a series of specialized tasks (web development, perhaps some initial marketing, graphic design, and more) that you’ll want help with.

Freelancers vary in cost greatly depending on the level of experience you are looking for. This is also the department where “you get what you pay for” matters most. Don’t let working for your business become a race to the bottom for subpar freelancers desperate for any gig.

You can find freelancers either through job boards, contacts you might have in the industry, Facebook groups, and sites such as UpWork  and Fiverr . Each platform has its advantages and disadvantages, so look for what would be best for your needs. If you need help, consult this resource on how to hire remote workers or hire for small businesses .

As for the business startup costs relating to freelancers, try to tally up the estimated hours and multiply that by the rates you are willing to pay.

Here are a few common examples of freelancers you might hire and what they might cost:

•        Freelance writers (for initial copy) – They are generally paid per word. For quality work you can expect to pay 15 to 25 cents per word. Some writers also charge per project. •        Freelance designers – $25-$300 per hour •        Web Development or Programming – $30-$150 per hour •        Virtual Assistants – $5 to $25 per hour

The rates vary due to location, service, and what the freelancer charges. Typically, US-based freelancers charge the highest rates. Here’s a more detailed breakdown of average freelancer hourly rates .

Just because your business doesn’t have a physical storefront doesn’t mean that you don’t need a space and tools to work with. Many owners don’t consider this until too late when compiling their business startup costs list. We’re here to help you flesh out the ideas likely already floating around your head.

Computer Equipment, Programs, Apps, etc.

Computer equipment can be a notable business startup cost. For security and organizational reasons, we recommend having a separate setup for your online business than for your personal use. Unless you’re in video production or another business that will require a much more powerful setup, the following examples of startup costs can serve as a decent guide:

• A desktop with a monitor or two. We recommend something in the $1,000-$1,500 price range for most people.
• A laptop in the same price range ($1,000-$1,500) is a great choice, although you won’t get as much screen space and performance.
• A printer and scanner will prove necessary, and we recommend you pick something that will last your business a few years ($100-$200 should be a good range to start with).
• Software such as Word and Excel, and a finance tracking program. A point of sale program might also be necessary. These might run you $100-$300 a year for the relevant subscriptions.
• Data breaches can be extremely costly. With this in mind, a security suite and a password manager ( McAfee and Kaspersky are common choices) and a password manager ( LastPass is a fine option) are great investments for about $100 a year. You might also want protective measures for your websites and other online assets.

Home Office Space

You can run your business from your couch, but it is far from the most productive option. You need to invest in a space or working environment  free from distractions for hours at a time. It doesn’t need to be extravagant, but it does need to be comfortable and meet your needs.

As far as furnishing it, you don’t need to let it take over your business startup costs list. You should be able to find everything quite cheaply if you don’t mind things that might be used or mismatched. You can easily find a desk for at or less than $50 and a good chair for the same price. You can find a working lamp for $10 and a filing cabinet for $40-$50. Consider looking at Facebook Marketplace , Craigslist , or similar sites.

Working from home can actually ease your tax burden, but if you can’t make it work, this can easily balloon into one of your largest expenses. Another idea would be to find a coworking space or startup incubator in your area. They often have tiered options, from floating desks to private offices, that can grow with your business.

Read more: Learn How to Start a Small Business at Home

Marketing makes your business stand out from the rest of the pack. You might be intimidated by the huge costs of large marketing firms, but don’t worry. You don’t need to work with a firm when you are starting out. You can DIY your marketing and as you scale, start outsourcing  your marketing tasks to freelancers and/or agencies.

To manage marketing-related business startup costs wisely, you might want to start with some of the following options first:

Use Your Personal Network: You shouldn’t spam everyone you’re connected to, but you should reach out to anyone who would be genuinely interested, via email or social media. Talk to them about what you’re doing. Seek not to just promote your brand but to help people while promoting your brand. The only cost is some of your time.

Note the Importance of Word of Mouth Marketing: As this Invesp infographic  shows, many studies have been done to the effect that word of mouth marketing is by far the most effective long-term option for most businesses. Building a strong reputation is an effective strategy for long-term success, and building a strong reputation is more about your service and product quality than any single expense.

Content Marketing:  This tends to be a long-term investment, which might not sound great for a business startup cost, but content marketing will in time help get more eyes on your online business. Focus on quality, not quantity, and offer information no one else can. As for the cost, you can either hire content specialists (which can be expensive, depending on the field and quality of writing you want) or work on it yourself for the cost of your time. To learn more about content marketing and the potential tactics to use, Content Marketing  Institute is a great resource.

Here is a list of some typical content marketing tasks. As far as the costs, they entirely scale, so you will want to determine your marketing budget and see how much you wish to invest in each method.

• Content creation: refer to freelance writing rates earlier in this article.
• Influencer marketing: Rates range from free product for influencers to thousands per content piece posted, depending on the popularity of the influencer.
• Search Engine Optimization: When you start your business, you can do your own SEO. As you grow, you may want to consult with experts. You can either hire a freelancer (see section above) or use an agency. An agency will cost you the most money, with packages in the thousands of dollars per month. Costs will vary, but here are some industry averages .
• Social Media: Social media marketing won’t cost you anything but your time and maybe a few posting tools to help you stay organized. As you grow, you can hire a social media manager to create content and manage your profiles. We talk more about social media in the next section.
• Advertising : Be careful when it comes to social media advertising . In the past 2 years, competition and cost have drastically increased. So hire a trusted agency, or professional, or learn how to do it from an expert. Costs can range from $40-$60 per hour or more depending if you’re working with an independent contractor to set up your ads or working with a full-service agency.

Web and Social Media Presence

Your web and social media presence is for all intents and purposes your storefront. Even if you have a brick-and-mortar business, it’s a nearly mandatory business startup cost.

Here are the things you need to work on and their associated costs:

Social Media Accounts

Facebook and Twitter are useful platforms to engage with your audience and build a community of followers.

Instagram is another important account to create, especially if you’re dealing with physical products that you want to show off to potential customers. Consider platforms where your audience (or potential customers) spend screen time. Don’t be afraid to start on platforms like TikTok . Even if you don’t have time to invest in different channels, securing the handles will ensure your brand is secure if you want to pursue growth at a later time.

Regarding upkeep and maintenance, you don’t need a professional social media manager in the beginning, as they are simply another monthly cost of running a business that you can spend elsewhere.

Focus on the platforms you think will be most effective for your business, favor in time expenditures, and invest in a few social media management apps such as Hootsuite , Buffer  or Sprout Social   to make things easy on yourself. The plan/app will cost $30-$100 a month (some have a free option).

A Quality Website

Since in most cases this will be your storefront, your website is a business startup cost you’ll want to make a priority. Look into getting professional help, but note the tiers of cost:

• A fully functional bespoke (100% custom) website can cost you upwards of $10,000, but you likely don’t need to start there.
•   $50-$100 for the basic template. (Here’s a popular WordPress template gallery )
• $25-$50 per hour for a developer to customize the template
• Additional varying costs based on the content you want on your site (see freelancing costs).
• Another few hundred per year for additional features such as security measures, an SSL certificate, guarantees and support costs, and miscellaneous website expenses.
• You can use sites like  UpWork  to get contractors to bid on your website project. You may be able to get a basic functional site for your business for a few hundred dollars. Just make sure to check the reviews of the applicants and choose providers with a long work history and good reviews.

If you have a little technical know-how and you want to load the WordPress template yourself and tinker around with it, you will only need to purchase the template. Templates come with customization instructions that don’t require a developer. You will, however, need a developer if you want to go above and beyond the template’s capabilities.

WordPress Alternatives

If you are starting an ecommerce business, Shopify  is an all-in-one website creator. Similar to WordPress, you can customize the templates within Shopify’s capabilities, but above and beyond that will require a developer. In most cases, most ecommerce businesses do not need a developer, as Shopify offers many apps that cover most ecommerce needs. Pricing starts at $29/month.

If you are running an agency, or freelancing or consulting or starting a creative endeavor, Squarespace  may be an option. The templates and customization are limited but they are modern and beautiful. Squarespace will be an option if you are looking for something simple and streamlined. Pricing starts at $12/month billed annually.

Note that these options above include  website hosting and maintenance in the price. That’s why there is a monthly fee. If you go with WordPress.org, you will have to secure your own hosting.

Web Hosting

Web hosting will, at least at the start, cost you perhaps $10 a month, and scale up from there. The domain name will be an additional few dollars a month, and outside of that it depends on the tools and other services you might be using.

We would like to note that professional help in this area is often worth it. The hours you would have to put in to create a great website can often be costlier than hiring someone else.

Inventory is a wildly varying business startup cost. If your online business is service-based or you don’t have any inventory to worry about, please feel free to move on to the next section.

Otherwise, the main priority from a business startup cost perspective is to make sure that there is always enough product available to fulfill orders. If you can’t fulfill orders, you can’t make any profit and you’ll likely lose customers.

Consider the following factors:

• Do the products expire or age in any way? Does it require any special type of storage conditions in order to maintain optimum quality?
• How easily can you restock? Is there anything that, at times, might be unavailable? How long does a manufacturing order or shipment to your processing center (or office) take?
• How quickly do you expect products to sell? Does your business focus on moving a lot of inventory or selling the right, more expensive items to a few buyers?
• Can you scale up storage in the event of success? You don’t want to be caught unaware by an unexpected spike in sales.

You will also want to consider storage costs, which can similarly vary based on the nature of your products. Look into what’s locally available or consider an external fulfillment service.

If you are handling manufacturing or creating your own products, you will need to consider production costs. The numbers here will vary so greatly that only you can do the math, but we do have a few tips and action items:

• You can mitigate some of the production costs through bulk orders, but you’ll become a little less adaptable in the process. What if you want to change your design or model after you start? What if you find a small design flaw in the first batch? You will need to strike the right balance.
• A manufacturing partner can be expensive, but things like reliability and accessibility mean a great deal and can be worth the added cost. For example, if a factory shuts down, has other orders, or simply goes off the grid for a few days when you need to reach them, those lost days will eat into your profit margin.
• If you perform production yourself in any way, you will want to consider the costs of scaling up should you find success. Can you reasonably put more time and effort into creating more cakes, for example? What’s the cutoff point for your own effort?

This guide can provide you with further information on inventory and production pricing through the cost of goods formula (COGS).

When determining and managing your business startup costs, you are going to want to spend some time making sure these routine costs are accounted for.

Taxes are another item that will vary from business to business, and the nature of online business often makes it trickier. You do not want to deal with a tax bill you never anticipated nor budgeted for. You might need to deal with several different levels of taxes, depending on how and where you operate.

• As an individual, you should learn more about self-employment taxes .
• You will need to pay taxes quarterly.
• You will need to pay taxes on any profits your business generates.
• You will likely need to pay payroll taxes , unemployment taxes , and workers’ compensation taxes (this varies depending on your country or region).

You will also either want to consult a tax professional or review the regulations in your area via the website of your state’s department of revenue.

Processing Fees

These can add up to cost you 1-2% of your revenue if you’re not careful. If depends partially on the deal you have going with your payment processor. PayPal often takes a cut ($0.30 USD, plus 2.9% of the amount you receive (more on Paypal fees here ), and credit card processing ( can range from very low to 3%+ depending on your agreement) will be the most common culprit. Also, beware of banking fees.

Licenses and Permits

While we won’t go into too much detail here (there are too many options, and it would be wise to look this up if applicable on your own), we do, however, want to remind you to budget for appropriate licensure and permits in your industry. This is more likely to apply to food service industries, construction industries, and some financial service industries. This guide from Fundera  is a great resource to work from to learn more. You should also look at local (city and town) regulations that might pertain to your industry.

Most businesses are not profitable at first, and it could take quite a while to break through and earn a steady stream of income. While the costs of an online business aren’t exorbitant as they might be for more traditional businesses, they can still be a drain, especially if you’re also working on it full time and have no other sources of income. You do not want to make business decisions based on short-term personal financial needs.

When starting out, you need to make sure you either have a reliable stream of income or enough in the bank to keep full operating costs going for at least one year and up to three years, if you think your platform or idea might take a while to take off. This guide will break down the different types of routes to funding a startup. This amount can vary greatly depending on your industry, so do some extra research beforehand and know how much you should have stored away.

Your budget should, at the end of the day, be one of the guiding documents of your business, alongside its mission statement and business plan. You can organize it how you would like. Just remember that businesses that don’t keep the details in mind generally aren’t as efficient as businesses that do. As for how to set it up, follow these steps:

• Make an itemized list of every expense or potential expense associated with your business.
• Plan out each item over the quarter as well as the year, as best as you are able.
• Set up a system where you can easily and nearly automatically update it each day or week with any new expenses, etc.
• At the end of each quarter, review your budget and adjust it as necessary. Be OK with the unexpected occurring and the numbers not perhaps being what you expected, but take the new data into consideration when making adjustments.

While there are further details, those are the basic steps. You can either use a program such as Float  or Freshbooks  to help you, or you can use a spreadsheet (and there are templates to help, you can download plenty from Microsoft  alone for Excel).

No two budgets should ever look the same, but here are a few additional things you should consider when setting up your budget for business startup costs:

• Have an emergency fund outside of your backup fund ready. If you have the resources to deal with it, it’s less of an emergency and more of an inconvenience. Try to have at least three months of expenditures on hand for an emergency, or more if you know something particularly expensive could happen such as upcoming car repairs.
• Try to keep a simplified budget handy that you can check at a glance, so you can refer to it as you make decisions.
• A budget is at times an evolving document. The budget should reflect reality as best as possible, and sometimes that requires changes to be made.
• Track everything. There is no expense too small. There are apps and programs to help with this if you think it will be too much of a chore (and those feels are justified). Some of these are Mint , Moneybook , and QuickBooks .

Managing Your Business Startup Costs

We encourage you to bookmark this page so you can check back for reference later. No one expects you to understand everything all at once and this can serve as a great business startup costs list.

Remember that your labor and energy are important things to consider when establishing how much it cost to start a business. Be aware of service and recurring costs, hidden opportunity costs, and similar items. Keep all of your options available to you, and don’t forget that managing costs effectively doesn’t always mean cutting corners. Above all else, be open to new opportunities and adapting to the market.

You shouldn’t have to start your business alone. Explore our free training series for frameworks at every stage of your entrepreneurial journey.

About Kevin Conner

Kevin Conner is the founder and CEO of Vast Bridges, a customer acquisition and lead generation company in the home services arena. Kevin has contributed to outlets such as Startup Stockpile , AgilityPR and more. Kevin Conner and Vast Bridges have been featured in Inc and the Jacksonville Business Journal .

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New Business Starting Costs

Startups should estimate the new business startup costs as part of their lean business plan. “

How much will it cost to start that business? Here’s how to create a useful educated guess. It’s essential two lists. You can do this. Tweet

Two lists: expenses and assets

Knowing the starting costs before you start a business is a matter of two simple lists:

• Startup expenses : These are expenses that happen before the beginning of the plan, before the first month of operations. For example, many new companies incur expenses for legal work, logo design, brochures, site selection and improvements, and signage. If there is a business location, then normally the startup pays rent for a month or more before opening. And if employees start receiving compensation before the opening, then those disbursements are also startup expenses.
• Startup assets : Typical startup assets are cash (the money in the bank when the company starts), business or plant equipment, office furniture, vehicles, and starting inventory for stores or manufacturers.

“I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not trying.” — Jeff Bezos, founder of Amazon.com Tweet

A Simple Starting Costs Example

I used an example in Starting Balances  in Chapter 18, on the Balance Sheet. These are estimated starting costs for the sample bicycle store:

Notice that on the same worksheet Garrett used to estimate starting costs, he also estimated starting funding, on the right side of the illustration. Books have to balance, so the initial estimates need to include not just the money you spend, but also where it comes from. In the case above, Garrett had to find $124,500, and you can see that he financed it with Accounts Payable, debt, and investment in various categories. That Starting Balances illustration in the Projected Balance Sheet chapter also shows how those initial balances go into the Projected Balance Sheet .

Another Simple Starting Costs Example

Here is another simple example: the starting costs worksheet that Magda developed for the restaurant I used in Chapter 7 for basic numbers. Magda’s list includes rent and payroll, the same as in her monthly spending, but here they are included in starting costs because these expenses happen before the launch.

I included rent and payroll because they point out the importance in timing. The difference between these as startup expenses and running expenses is timing, and nothing else. Magda could have chosen to plan startup expenses as a running worksheet on expenses, starting a few months before launch, as in the illustration below. I prefer the separate lists, because I like the way the two lists create an estimate of starting costs. But that’s an option.

How to Estimate Starting Costs

Obviously the goal with starting costs isn’t just to track them, but to estimate them ahead of time so you have a better idea, before you start a new business, of what the financial costs might be. Breaking the items down into a practical list makes the educated guess a lot easier. Ideally, you know the business you want to start, you are already familiar with the industry, so you can do a useful estimate for most of the startup costs from your own experience. If you don’t have enough firsthand knowledge, then you should be talking to people who do. For others, such as insurance, legal costs, or graphic design for logos, call some providers or brokers, and talk to partners; educate those guesses.

Starting Cash is the Hardest and Most Important

How much cash do you need in the bank, as you launch? That’s usually the toughest starting cost question. It’s also prone to misinformation, such as those alleged rules of thumb you can find everywhere, saying you need to have a year’s worth of expenses, or six months’ worth, before you start. It’s not that simple. For most businesses, the startup cash isn’t a matter of what’s ideal, or what some expert says is the rule of thumb – it’s how much money you have, can get, and are willing to risk.

The best way is to do a Projected Cash Flow while leaving the supposed starting cash balance at zero, which shows how much (at least in theory, according to assumptions) the startup really needs in cash to support the business as it grows, before it reaches a monthly cash flow break-even point. Magda did that to determine the $12,000 needed as starting cash for her restaurant. Note how, in the illustration here, the lowest point in cash is slightly less than $12,000:

That low point comes, theoretically, in the third month of the business, March. The low point is $11,609. Obviously that’s just an educated guess, but it’s based on assumptions for sales forecast, expense budget, and important cash flow factors including sales on account and purchasing inventory. So it’s better than a stab in the dark, or some rule of thumb.

Just as an example, the total spending with the estimates shown here, the theoretical “year’s worth of spending,” is $182,000 (which you don’t see on the illustration, by the way, but take my word for it). The total for the first six months is $93,000. If Magda sticks to those old formulas, she can’t start the business. She is able to raise enough money, between loans and her savings, to put $12,000 into the starting cash balance. So that’s what she does. Then she launches and continues to have her monthly reviews, and watch the performance of all key indicators very carefully.

Find Your Startup Costs Sweet Spot

There is no magic startup costs estimate for a given business. Every startup has its own natural level of startup costs. It’s built into the circumstances, like strategy, location, and resources. Call it the natural startup level; or maybe the sweet spot.

1. The Plan

For example, in the illustrations above, Magda’s restaurant deli in the office park needs about $60,000, and Garrett’s bicycle store needs about $125,000. The level is determined by factors like strategy, scope, founders’ objectives, location, and so forth. In both cases, the entrepreneurs have lists of assets they need and expenses they’ll incur. Let’s call these lists the natural startup level, which is built into the nature of the business, something like DNA. 

Startup cost estimates have three parts: a list of expenses, a list of assets needed, and an initial cash number calculated to cover the company through the early months when most startups are still too young to generate sufficient revenue to cover their monthly costs.

It’s not just a matter of industry type or best practices; strategy, resources, and location make huge differences. The fact that it’s a Vietnamese restaurant or a graphic arts business or a retail shoe store doesn’t determine the natural startup level, by itself. A lot depends on where, by whom, with what strategy, and what resources.

While we don’t know it for sure ever — because even after we count the actual costs, we can always second-guess our actual spending — I do believe we can understand something like natural levels, related to the nature of the specific startup.

Marketing strategy, for example, might make a huge difference. The company planning to buy Web traffic will naturally spend much more in its early months than the company planning to depend on viral word of mouth. It’s in the plan.

So too with location, product development strategy, management team and compensation, lots of different factors. They’re all in the plan. They result in our natural startup level.

2. Funding or Not Funding

There’s an obvious relationship between the amount of money needed and whether or not there’s funding, and where and how you seek that funding. It’s not random, it’s related to the plan itself. Here again is the idea of a natural level, of a fit between the nature of the business startup, and its funding strategy.

It seems that you start with your own resources, and if that’s enough, you stop there too. You look at what you can borrow. And you deal with realities of friends and family (limited for most people), angel investment (for more money, but also limited by realities of investor needs, payoffs, etc.), and venture capital (available for only a few very high-end plans, with good teams, defensible markets, scalability, etc.).

3. Launch or Revise

Somewhere in this process is a sense of scale and reality. If the natural startup cost is $2 million but you don’t have a proven team and a strong plan, then you don’t just raise less money, and you don’t just make do with less. No — and this is important — at that point, you have to revise your plan. You don’t just go blindly on spending money (and probably dumping it down the drain) if the money raised, or the money raisable, doesn’t match the amount the plan requires.

Revise the plan. Lower your sites. Narrow your market. Slow your projected growth rate.

Bring in a stronger team. New partners? More experienced people? Maybe a different ownership structure will help.

What’s really important is you have to jump out of a flawed assumption set and revise the plan. I’ve seen this too often: people do the plan, set the amounts, fail the funding, and then just keep going, but without the needed funding.

And that’s just not likely to work. More important, it is likely to cause you to fail and lose money.

Repetition for emphasis: you revise the plan to give it a different natural need level. You don’t just make do with less. You also do less. Otherwise, it’s not realistic.

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Breaking Down Business Startup Costs: What to Expect

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When it comes to small-business ownership, you really do have to spend money to make money — which is why small-business owners often apply for loans from traditional lenders to get their businesses off the ground. But along with a business license, most traditional lenders  require proof of revenue before they’ll agree to a loan. So how are new business owners supposed to start making money without qualifying for a business loan?

Well, for better or worse, most first-time business owners have to use their own money to launch their companies. And unless you have thousands of dollars of ready cash, this means you’ll probably need to take out a  personal loan  or turn to crowdfunding, credit cards, or alternative lenders to acquire enough capital to start your business (and start making money).

But the amount of money you need to start a business isn’t always clear.  In fact, when we polled 700 small-business owners, more than 50% said they underestimated how much they’d have to spend during their first year of business to make money.  

We'll dig into how much money you need to start a business and resources to help you budget for your first year of business.

How much revenue are small-business owners generating in their first year?

For most of the small-business owners we polled, their initial investment paid off:

• Online business owners average $50,000 in revenue their first year.
• Mobile business owners average $100,000 in revenue their first year.
• Storefront business owners average $105,000 in revenue their first year.

Remember that revenue isn’t the same thing as profit: Revenue is your business’ income, while profit is the amount of money you take home after paying for expenses, daily operations, employee paychecks , loan interest, and other debts.

The length of time it takes business owners to become  profitable is usually a year or more — and only 15% of business owners polled started to turn a profit in under a year. Many business owners (40%) report turning a profit within their first or second year of business.

How much does it cost to start a business?

People tend to believe that starting a business requires an endless amount of money. On the contrary, freelancers, such as sole proprietors, and home-based businesses can get going for practically nothing.

These business ideas are perfect if you want a part-time business or a business that costs $1,000 to get going.

Other businesses, such as construction companies, trucking companies, restaurants, or franchises can have much higher startup costs.

So what costs will you face when you start your business? The answer, of course, depends on your business model.

Per our survey results, online-only business owners spend an average of $35,000 during their first year of business.  But you might end up spending more depending on the type of business you start: 

• Mobile business owners spent an average of $92,500
• Storefront business owners spent an average of $100,000

Bear in mind that most mobile and storefront business owners  also  operate online, which is one key reason they spend more than online-only business owners.

Which small-business expenses cost the most?

Startup costs are expenses of getting a business up and running. In our poll, we learned a lot about how first-time business owners spend their money in their first year of business. Here’s how first-year spending broke down for most business owners: 

• 30% on inventory
• 21% on equipment
• 15% on location 
• 12% on taxes
• 7% on utilities
• 6% on payroll

Other common costs included insurance, marketing, and research expenses — though, again, the amount of money spent on each type of expense depends on the type of business you start. If you own an online or mobile business, expect to spend more of your money on inventory. If you own a storefront business, you’ll probably spend more on location, such as renting, lease agreements, building repairs, and property taxes.

What are the most unexpected small-business expenses?

Inventory and equipment are fairly standard expenses, but first-time business owners also cope with unexpected expenses that can take a surprisingly hefty bite out of their budgets. For instance, 46% of business owners surveyed were surprised by the amount of money they had to spend on taxes. And 43% of our respondents were surprised by how much money they had to invest in technology, 40% were surprised by tech costs, and 39% were surprised by shipping costs. 

Other costs that business owners didn’t always account for in their first-year budgets included licensing fees, insurance fees, legal fees, and patent costs.

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What startup expenses can I deduct from my taxes?

If you’ve officially started a business, you’re entitled to deduct specific startup costs and business expenses from your tax return. Any startup expenses you can't currently deduct have a 15-year amortization period (or a length of time allowed to write off expenses) from the first month you begin business. The IRS divides eligible startup costs into three different categories:

• Preparation costs: Before officially opening your doors, you’ll likely spend money on traveling, advertising, wages, or employee training. Business owners should treat these costs as capital expenses — which are all deductible.
• Research costs: Depending on your trade or business, you may need to perform research and survey certain markets to help your business succeed. Any costs associated with this type of research can be deducted.
• Legal and organizational costs: Setting up a partnership or corporation typically requires legal fees, accounting fees, state organizational fees, and filing fees. We know what you’re thinking — that’s a lot of fees. But these costs are 100% deductible.

What are funding options for small businesses?

To help your company thrive at every stage, you may need to find ways to externally fund your business . Working capital can help pay for expenses, one-time costs, full-time employees, and more. Here’s a roundup of funding options for your small business.

Friends and family

This is perhaps one of the most popular ways to find outside funding. However, if your business goes under and is unable to pay the loan back, be prepared to attend some rather awkward family gatherings. So it’s important to think long and hard before going down this road — regardless of the dollar amount.

Business loans

If you’re hesitant to reach out to friends or family, we have your next course of action. Consider applying for an online small-business loan to fuel your business. Most traditional banks and lenders like to see a personal credit score of at least 620. If you’re trying to work your way out of a credit score hole, we recommend microfinancing, otherwise known as microlending or microcredit. There are also a number of small business loans for startups that are great for brand-new businesses without cash flow or profit history. Regardless of your unique situation, the variety of loan options should encourage you and ease your worries.

If you’re looking for your personal Mark Cuban to be your angel investor for your small business, we recommend applying for Shark Tank . If that doesn’t work, we have the next best thing: crowdfunding sites like Kickstarter and Indiegogo can help you reach your funding goal. Equity crowdfunding, otherwise known as crown investing, connects you with potential investors who provide funds in exchange for a stake in the business. These new and innovative sites are truly lightning in a bottle.

If you’re lucky, an advisory firm may advise their clients to invest in your product or service. To show your investors that you’re serious about utilizing their capital, you’ll need a well-constructed startup financial model. It should not only be properly structured and compelling but also lay out financial projections, customer lifetime value, fundraising goals, unit economics, and expenses. And instead of reinventing the wheel, consider using a template.

Personal loans

This option should be your last resort. Although personal loans are a quick way to inject some cash into your business, they tend to be higher risk and more expensive. So if you end up going this route, it’s important to pay off the debt as soon as possible. Otherwise, you may harm your personal credit score .

Avant’s secure personal loan options and next-day funding make it our top pick for brand new businesses not yet qualified for business loans.

Qualifications:

No min. time in biz

No min. revenue

550+ credit score

Enter your loan needs and qualifications to get matched with a list of lenders best suited to you. Then, sort by the financing factor that you find most important. (Note: not all lenders allow personal loans for business use.)

Additional findings

Only 30% of new small-business owners we polled qualified for more traditional small-business loans. Among the remaining 70%, funding came from a variety of more personal sources: 

• 39% used their personal savings to start their business.
• 33% used a personal loan.
• 34% used a personal credit card.

The takeaway

When it comes to startup costs, they can vary depending on your type and size of business.

More than 30% of the business owners we polled said starting their small business was one of the hardest things they’ve ever done. Whether you consider yourself part of that percentage or not, we hope our data helps you feel a little less alone.

Finally, 51% of small-business owners polled said they wished they’d used a startup cost calculator before launching their businesses. If you want help budgeting for your first year of business, our startup cost calculator  can get you started.

But no matter what your business ends up being, take the time to carefully estimate and plan for your startup expenses. It never hurts to be prepared.

Related reading

• 10 Best Startups Loans for Bad Credit in 2023
• Best Startup Business Line of Credit 2023
• 9 Top Marketing Strategies for Startups
• 5 Essentials to Know Before Marketing Your Startup
• Best Crowdfunding for Startups 2023: How to Fund Your Small Business

Methodology

We partnered with Pollfish to conduct an anonymous survey of 700 small-business owners. Our survey’s margin of error was +/- 2% with a confidence level of 95%. After working with Pollfish to collect survey data, Business.org analyzed the results and compiled this report. To learn more about Pollfish and how it organically finds poll respondents, check out its  methodology .

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

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Startup Costs: Key Expenses to Include in Your Budget

Money is central for launching startups. You've probably heard stories of how some micro-companies were opened with an initial input of as little as $2,000 - $5,000 USD. Yet, in reality, plenty of things affect the actual sum. The real startup cost will vary based on the business size, type, and scope. This is why startup costs can fall anywhere from several thousand dollars to 5 or even 6-figure numbers .

How did we come to this estimate range? Lots of seemingly insignificant things can add up to the total. This can include getting licenses and insurance, buying equipment and supplies, organizational expenses and utility costs, wages, and renting office space. You should also factor in possible legal fees, one-time payments, ongoing expenses, and product development time frames.

So, how much does it cost to start a startup , and how do you calculate an attainable budget? On this page, we'll go over the factors influencing startup costs to help you figure out how much money you'll need to kick-start your company, especially if it's a tech product.

Startup Funding Source Options

There are many ways you may go about financing your startup and getting it off the ground. What are the options when it comes to finding money to fund a startup? Here are the common types of startup funding .

As such, you can be:

• bootstrapping (that is, using self-funding);
• looking for an angel investor who'll believe in you while you're still at an early stage;
• joining an incubator or accelerator program (based on whether you're just taking your first steps or are aiming at scaling);
• trying to get a loan if you have insufficient funds (be attentive with comparing credit ratings );
• or opting for other external ways to get money.

In any event, these aren't just fancy startup terms related to finance. Your funding source and the amount of money you have will predetermine how flexible you can be with your budget. Unsecured business loans can also be an attractive option for some businesses. Unlike secured loans, they don't require collateral, which makes them ideal for startups without significant assets. Understanding the specifics and requirements of unsecured loans can help you determine if they are a viable choice for your business.

10 Common Business Startup Costs

Nonetheless, no matter how big your "piggy bank" is, you need to know how to stretch money. That's why financial forecasting for startups is essential to make realistic estimates of how much you'll need to invest before you open a startup and to run and maintain it once you do so. Note that there will be one-time and ongoing expenses, fixed and variable costs, as well as urgent and non-urgent ones during various stages of startup development .

What are startup costs determined by? And what do startup costs include? Next, we'll review how to calculate startup costs for small business owners and the factors influencing the startup cost to help you plan your feasible budget. Additionally, creating a comprehensive budget plan is vital for managing startup costs effectively. A budget planner helps track all expenses, from initial investments to ongoing operational costs. We'd like to point out straight away that the figures given below are estimates and may vary greatly based on your region and other things.

Crafting a Business Plan

Putting together a strong business plan should be taken seriously before you start doing anything else. This is the centerpiece of your future undertakings that can serve as a compass for steering your business. It can also become the foundation for future pitch deck creation and a supportive source to help you pitch to investors when seeking funding.

Creating a business plan is important for a couple of reasons as it:

• assists in defining the business goals, objectives, OKRs and KPIs ;
• allows to determine the target market;
• helps allocate potential revenue sources;
• enables to identify the possible risks.

When working on your business plan , you have to be clear about your unique selling point and follow the approach that highlights the customer before all. Your plan should also note how your operational processes will work and your possible business development roadmap. Using the best business plan software can help you organize these elements effectively and present them professionally.

Surely, when the time comes to bring the plan to life, you'll have to be able to think on your feet, iterate the plan, and make a startup pivot if changes are required. That is, it's very likely that you'll have to amend your business plan when it's necessary to give your startup a chance.

Approximate expenses: $500 - $1,000 USD if handled in-house.

Expenses on Research

Doing market research is often an underestimated step, yet going through proof of concept is highly important. These findings can give your initial plan a 360-degree spin.

What if you'll start developing a product that no one needs? Ultimately, if your idea lacks product-market fit , there's a huge possibility that your project will fade into oblivion.

Before you start acting on your business plan, you have to ensure that you've studied your competitors, calculated the market size realistically, know your audience (their needs and pain points), and understand what can be done to create a product that'll bring value and live up to expectations. Going through discovery in-depth can not only help you dot all the i's but also allow you to determine how to:

• approach the product's development best;
• prioritize features ;
• determine the required team size;
• estimate your needs for financing.

Approximate expenses: discovery is often passed to an external team with various professionals (e.g., a lead developer, UX designer, and product manager); the phase can last 2-3 weeks and cost about $6,000 - $10,000 USD.

Business Incorporation

As a rule, you'll be faced with fees associated with incorporating your company . They'll depend on the chosen business structure type. Ordinarily, incorporating a startup as an LLC or a corporation will cost more than if you select in favor of a partnership or sole proprietorship. Therefore, make sure you familiarize yourself with how LLC laws differ by state , browse the restrictions, regulations, and rules that apply in your given location when choosing the most appropriate business entity.

Of course, your country, state, and local jurisdiction will determine the exact costs of the fees for filing business applications. To give you a few estimates, the fee for registering a corporation or if you want to set up limited company can range from $100 to $800 USD, while if annual maintenance fees apply, this may account for an additional $50 - $500 USD.

Consulting with a business attorney can help you understand how an LLC can specifically benefit your situation along with what is the best state to form an LLC and the different costs associated with it.

Approximate expenses: $100 - $800 USD for forming an LLC or corporation.

Insurance Payments, Permits, and License Fees

Depending on the type of company you'll be running, there's a chance that you'll need specific permits that apply to a given industry. The price range can fall anywhere from a few dollars to several hundred dollars and add on to the typical startup costs.

Similarly, it's sensible to insure your business assets and employees too. The cost of insurance will depend on the coverage (for instance, whether you'll be ensuring property, general liability, or anything else). The number of employees, business size, industry, jurisdiction, and insurance provider matter too. But about $600 to $1,200 USD is the median yearly price.

Approximate expenses: $700 - $1,500 USD per year for insurance, permits, and licenses.

Loans and Taxes

On another note, if you're getting a payday loan or other loan type to launch the company, you have to take into account the interest rate and payments. This could come from a bank, a private lender, or even the SBA. But what is an SBA loan ? Well, it’s federally-supported, giving you peace of mind, albeit with some eligibility caveats to know about. Weighing up all of these options is the only way to choose an appropriate loan product

Giving a very rough estimate, you might have to pay about $13,500 USD interest for a $50,000 USD 12-month loan, which should also be considered in your startup costs plan.

Don't forget to add business taxes to your startup budget as well. You'll have to pay taxes for payrolls, corporate income taxes, and so on, based on the existing governmental policies. Mind that some of your expenses will be tax-deductible , but you have to research the specific rules that apply in your state, for your niche, legal entity type, and so on. It's also important to hire legal advisors so your business can get startup lawyers benefits . Legal guidance from a startup lawyer is invaluable, helping avoid pitfalls and comply with relevant regulations.

Approximate expenses: vary based on loan sums and terms, taxes differ based on corporate income and governmental rules.

Supplies and Equipment 

Either way, you'll need some supplies. For instance, you'll buy computers, computer desks , hardware, furniture, and basic office supplies like a water cooler. Therefore, factor in the cost of equipment and laptops, standing desks, chairs, etc.

Surely, how many items you'll need will be based on the startup team structure . Likewise, the brands you choose will influence the total. On average, you should count on $1,000 - $3,000 USD to "outfit" one employee with a basic office chair , a desk, and a mid-quality computer.

Do not discard potential startup business expenses for maintenance either. If one's laptop starts running slowly , fixing it might require extra spending. Or, you might think about replacing it (hint: you can hunt for bargains, as there are many online shops offering affordable prices).

Securing bulk deals or negotiating with suppliers can significantly cut costs. For instance, purchasing personalized lanyards in bulk , or discounted stationery, or even furniture in large quantities often results in lower prices. Don't hesitate to ask for discounts or negotiate terms, as every dollar saved can have a substantial impact on a startup's budget.

Approximate expenses: you'll need about $5,000 - $15,000 USD to get equipment and supplies for a team of five.

Office Rent and Utilities

Plus, you might need to spend money on renting a physical space for your team . Such contracts are often signed for several months in advance. Include the office space's monthly cost and any deposits, fees, or amenities in your budget calculations. Also, add on a few hundred dollars per month on utilities.

Surely, there's a tendency for startups to choose in favor of remote-first work . It's become a growing global trend after the 2019 pandemic outburst. Not renting office space altogether is a great way to cut costs, allowing startups to redistribute their budget and invest this money in product development, marketing, or other things. Nonetheless, some companies continue renting office space, which goes down to individual business needs and employee locations.

Customarily, you may need an estimated $1,500 - $3,000 USD per month to rent office space for a team of under ten people. Yet, obviously, this price can go way up if you choose a fancy location or rent a large office (vice versa, rent may cost you much less if you opt for co-working or other alternatives). Just look at the map below, showing the annual net pricing for office rent worldwide based on recent statistics , note that the prices are in USD per square foot.

In any case, all of this will add up to the overall startup costs and the funding you'll need to get the company going.

Approximate expenses: you'll need about $1,500 - $3,000 USD per month for rent, the monthly total for utilities will vary.

Technology and Development

If you have a tech business idea and are creating a web-based product, you'll most likely need a domain that can cost you $10 - $20 USD per year. You'll also have to get an SSL certificate to secure your solution and protect data (this can cost $50 - $100 USD per year). Finally, you'll require web hosting for data storage. Different providers have various rates, but hosting may cost about $20 - $60 USD per month. Note that these three often come as packages from a single provider.

Likewise, apart from employee salaries, you'll need tools for work and product development . These types of startup costs will vary greatly. For example, this can be:

• a content management system or a CRM tool ;
• marketing tools (e.g., for SEO, email newsletters, social media);
• data analytics tools like Mixpanel or Amplitude ;
• work and task management tools like Jira;
• ‍ VoIP phone system for small business ;
• communication tools like Slack; ‍
• accounts payable software ;
• design tools like Figma;
• among others.

Most of these come on subscription and have plans based on inclusions or users. The pricing can range anywhere from $10 to several hundred USD per month. The quantity and quality of the chosen tools will form the overall expenses, and they'll directly influence both large and small business startup cost totals. Recent finds suggest that CRM tools come at a higher cost for startups than other tools.

What is more, your solution will likely use various third-party plugins and extensions . For instance, you might need to link up a payment gateway (such as Paypal, Stripe, or Braintree ), a service for making simple user forms, security tools, or anything else. It's very tough to give estimates and specific startup costs for this point as it depends on your chosen services, their quantity, and terms. 

Approximate expenses: you might need about $300 - $1,300 USD per year for hosting, an SSL, and a domain. The expenses on tools depend on the selected set and how many team members you have (but count on at least $2,500 USD per year). What's for extensions and plugins, the expenses are highly individual.

You will need to spend money on brand awareness . Even if you don't invest money in paid ad campaigns, you'll need someone to handle your social media, online presence, and other promotional activities.

Why is marketing crucial? A robust marketing strategy and strong startup branding can help you create buzz around your product, attract early users and first clients , and help the company become a name.

Expenses on startup digital marketing may vary according to what you include in your scope. Notably, oftentimes many marketing tools (for SEO , content creation, etc.) that are considered "free" turn out to be costly. Not to mention that you'll be paying for employee salaries, SaaS usage, placing PPC advertisements and content on external platforms, and other things.

Approximate expenses: you may spend about $5,000 USD or more per month on marketing, adding to the startup costs for business.

You have to be very smart about who you're hiring and how as issuing payrolls is a big chunk of the pie (at times, about 30% of the budget or more). Undoubtedly, this is one of the most significant factors impacting startup costs. Having a reliable payroll solution in place ensures that employees are paid correctly and on time, regardless of their location.

Based on the business size and type, you'll need to budget carefully for salaries and include payroll taxes , benefits, all types of pto , and other direct costs. If you have startup equity , consider getting a separate tool for that too.

For example, you can begin by forming a small team in which one person takes on several roles and proceed to team scaling when the time is right. Calculate the salary-related business expenses according to how many employees you plan to hire and the approximate salaries you'll offer using an employee cost calculator . Surely, to attract the best talent, it is wise to research the competitive salaries in the industry or given sphere.

On another note, you have to bear in mind that the rates for specific roles may be higher than others. Namely, developers from certain geographic locations or those coding using specific programming languages may cost you more than others, which should be regarded in your startup budget.

When it comes to hiring developers for a startup , there are various hiring models and employment approaches. These include finding people to join your company officially, finding individual contractors offshore, or teaming up with a third-party outsourcing partner. Frankly, all in-house employment aspects considered, it may turn out to be much more cost-effective to hire an MVP development company than to sign freelancers or recruit people internally.

Additionally, you'll need to consider how to set up direct employee deposit , which involves coordinating with your bank and ensuring compliance with relevant regulations. Moreover, as you navigate the complexities of payroll management, using tools to create a paystub can significantly ease the burden, ensuring your financial operations are both efficient and compliant.

‍ Approximate expenses: issuing salaries for a US-based team of five or six people to develop your MVP may cost $70,000+ USD per month, while opting for an analogous outsourcing team from Eastern Europe can cost you a monthly $28,000 - $35,000 USD.

Looking for a reliable MVP development company?

Upsilon is a trustworthy tech partner that can help build your MVP in under 3 months.

How to Calculate Startup Costs

How do you calculate startup costs for a business, especially when leveraging business tradelines ? And what should you factor in when calculating startup costs? Here's a simple step-by-step breakdown of what you need to take care of while handling startup budgeting.

Step 1: Select Your Budgeting Tool

Money likes accuracy, and so should your budget plan. Perhaps, making your calculations and storing such info in a notepad isn't the best option. So what you can do is at least opt for a spreadsheet or, even better, use accounting software that's equipped with specially designed budgeting features. 

Step 2: Estimate the Major Startup Expenses

Break down the key expenses for your startup. Count in everything from office rent and utilities to equipment, software, licenses, insurance, salaries, marketing, and so on. Once you've determined the main expense components and put them in a list, estimate the possible costs for each. To do so, research and note the fixed costs (e.g., one-time fees for tools, email marketing cost , or subscriptions affecting your monthly spend) and the less specific costs (such as employee salaries).

Step 3: Calculate the Costs

Now it's time to crunch up the numbers based on your estimates. At this point, it is important to sort your expenses into on-time startup costs for a business and ongoing ones. For example, rent is a repetitive monthly expense item that can be considered one of your overhead costs. Other repetitive costs like utilities could be variable. Whereas buying equipment, inventory, or other assets are single purchases.

Step 4: Monitor and Update

Use your budgeting calculations of expected costs as a tool. It can help you generate reports, file your taxes, set goals, make predictions and financial forecasts, anticipate shortfalls, and plan your startup budget more effectively. Review your results and adjust them over time.

Extra Startup Cost Tips and Considerations

Knowing how to make ends meet and get profit are crucial skills for startup founders, as this will influence the startup valuation and how effectively the venture operates. Yet what else should you keep in mind when planning your budget and trying to estimate the cost of startup launch?

Don't Get Blinded by Enthusiasm

Having faith in the success of your product or service is important, yet being too sure can lead to uncalled-for expenses. You have to understand what you can afford now. Therefore, no matter how high your expectations are, always weigh every investment decision carefully to avoid overspending and running out of money too soon. Ask yourself: "Is this purchase essential, or can it wait?"

Remember that when your project is at an early stage, you're still testing the waters, and there are no guarantees when it comes to business. Hence, you should do your best to cut down various startup business costs and ongoing expenses, especially on utilities, that aren't tied to your core processes.

Be Prepared for Unexpected Turns

As you see, there is no average business startup cost. But it's wise to stay on the safe side and set aside some money in case you encounter unexpected circumstances or force majeure situations. You never know what can go wrong in business, say, the customer demand or laws change, or a natural disaster causes a market shift. 

So, apart from a contingency plan, you need a reserve fund for emergencies and unforeseen expenses . How much should you set aside? It depends, but having enough resources to help your startup last for at least a few months is a good start. 

Keep an Eye on the Burn Rate

Analyzing and monitoring such key performance indicators as burn rate (how fast you're spending money) is vital for early-stage startups and businesses. In essence, you have to always keep one hand on the pulse and:

• monitor your burn rate to know how fast you're spending money;
• track your product metrics to identify whether you're moving in the right direction and make more informed decisions based on data, not guesses;
• make data-backed predictions, projections, and forecasts;
• calculate your negative cash flow.

The bottom line is that as a new business, it's probable that you'll be spending a lot more than you make during your first years. But you need to be sure that your cash runway (or how long you can stretch your budget and operate the startup before your money ends) is solid to ascertain that you're not going into the red.

Poor financial planning is more dangerous than you might think at first. As such, a recent study based on a survey of almost 500 startup founders suggests that the top two reasons causing such a high startup failure rate in 2022 were lack of funds and running out of money (and the same tendency has stretched to 2023 - 2024 too).

Select the Tools You Need Carefully

You'll need to choose the right startup tech stack and equip the team with the top tools for building your product and managing the work. However, selecting the right set of tools is worth much consideration. As such, you need to think about:

• solution compatibility and integration simplicity with other used tools;
• the value of the features provided and whether they duplicate the features of other tools;
• how often the tool is used;
• whether you're getting the value for money and the pricing that implies.

There are common cases when businesses use legacy tools with better analogs and more advanced opportunities, such as workflow automation. Similarly, you may be overpaying for features you don't need or opting for software that isn't compatible with your environment, which are great examples of startup costs that could be optimized.

All of this can lead to wasted money and the possibility of a costly future migration. Not to mention that using SaaS and other tools forms a portion of your fixed expenses and startup costs that generally don't fluctuate. So take the time to compare prices and offers.

Look for Special Offers for Startups

Giving an extra recommendation, you're always free to shop around when looking for the most optimal services . Mind that many providers offer special terms and startup discounts for eligible companies. This can save you lots of resources during your first year or so and cut down your business startup costs. Additionally, it can open up new opportunities like the chance to:

• obtain more perks from partner solutions;
• get access to learning materials;
• take advantage of alternative payment methods.

Searching for alternative ways to pay for MVP development services?

Upsilon provides startups the chance to opt for the Tech for Equity model.

Concluding Thoughts on ​​Startup Costs for a Business

Planning a startup budget wisely is essential for new businesses. Your money reserve isn't endless, so you have to be certain that you have enough resources to keep the business running for a while, even if you aren't getting any profit yet. Frankly, it'll most probably take some time before you get a stable income. So you must secure your funding, aim to get revenue, and plan your budget thoroughly.

Taking a realistic look at your budget and startup costs can help you raise funds and avoid many common startup mistakes down the line. Plus, such preparation allows for thorough research and improved decision-making. In general, to stay on the safe side, it is considered a best practice to budget a minimum of three months' worth of expenses. Your plan should count in rent, salaries, equipment, and other corresponding spending.

Upsilon has helped many early-stage startups create MVPs within the three-month time frame and assisted them in scaling their business further. If you have questions about startup planning and product development, feel free to contact us . You're also welcome to use our simple MVP calculator to estimate how much building a minimum viable product with a professional team can cost you.

Top 30 Financial Terms for Startups

Writing a Winning SaaS Business Plan: A How-to Guide

How to Write a Software Requirements Specification (SRS)

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Preparing a Business Plan for Startup Financing

When preparing a business plan for startup financing, it's crucial to define a clear business model, outlining revenue streams and value proposition. Conduct thorough market research to understand the target audience, industry trends, and competitor landscape. Create detailed financial projections, including income statements, balance sheets, and cash flow statements. Develop a marketing strategy that effectively reaches and engages the target audience. Build a strong management team with diverse skills and proficiency. Identify funding requirements and refine the plan to address gaps and sectors of improvement. By following these steps, entrepreneurs can create a compelling business plan that showcases their startup's viability and potential for growth, and discover the finer details of each component to secure the necessary funding.

Table of Contents

Defining Your Business Model

Establishing a clear business model is a vital step in the startup financing process, as it provides a roadmap for generating revenue and achieving long-term profitability. A well-defined business model outlines how a company will create, deliver, and capture value for its customers. At its core, a business model is comprised of two key components: the value proposition and revenue streams.

The value proposition defines the unique benefits that a company offers to its customers, setting it apart from competitors. It is the reason why customers choose to do business with the company. On the other hand, revenue streams outline how the company will generate revenue from its value proposition. This can include sales, subscriptions, advertising, or other revenue-generating strategies. By clearly defining these components, entrepreneurs can develop a comprehensive understanding of their business model, enabling them to make informed decisions about resource allocation, marketing, and growth strategies. A well-crafted business model serves as a foundation for a successful startup, providing a clear direction for achieving long-term profitability.

Conducting Market Research Analysis

Conducting thorough market research analysis is a crucial step in the startup financing process, as it provides entrepreneurs with a deeper understanding of their target audience, industry trends, and competitor landscape. This analysis helps entrepreneurs identify opportunities and challenges in the market, allowing them to refine their business model and develop effective strategies to gain a competitive edge.

Through market research, entrepreneurs can gather valuable Competitor Insights, such as market share, pricing strategies, and product offerings, which can inform their own business decisions. Additionally, market research enables entrepreneurs to identify Customer Painpoints, which are the specific problems or needs that their target audience is struggling with. By understanding these painpoints, entrepreneurs can develop solutions that meet the needs of their target audience, increasing the likelihood of success.

An exhaustive market research analysis should also involve gathering data on industry trends, market size, and growth potential. This information can be used to validate business assumptions and inform strategic decisions. By conducting thorough market research, entrepreneurs can build a strong foundation for their business plan, increasing their chances of securing startup financing.

Creating Financial Projections

With a solid understanding of the market and its dynamics, entrepreneurs can now turn their attention to creating financial projections that outline the financial trajectory of their startup. This critical component of the business plan provides stakeholders with a clear picture of the company's financial health and growth potential. Financial projections typically include income statements, balance sheets, and cash flow statements, which provide a thorough view of the startup's financial performance over a specific period.

When creating financial projections, entrepreneurs should concentrate on identifying and outlining revenue streams, including primary and secondary sources of income. This will enable them to accurately forecast cash flow and make informed decisions about investments, funding, and resource allocation. Additionally, financial projections should take into account various scenarios, such as optimal, worst-case, and most-likely outcomes, to provide a realistic representation of the startup's financial situation. By creating accurate and reliable financial projections, entrepreneurs can demonstrate their startup's viability and attract potential investors.

Outlining Marketing Strategies

A well-crafted marketing strategy is vital for startups to effectively reach and engage their target audience, build brand awareness, and ultimately drive revenue growth. A detailed marketing plan should outline specific tactics and channels to achieve these goals.

For startups, social media is a fundamental component of any marketing strategy. With the majority of consumers actively using social media platforms, startups can leverage these channels to build brand recognition, generate leads, and drive website traffic. A well-executed social media strategy can help startups establish a strong online presence, increase brand visibility, and ultimately drive revenue growth.

In addition to social media, startups should also consider other marketing channels such as content marketing, email marketing, and influencer partnerships. By outlining a clear marketing strategy, startups can guarantee that their marketing efforts are targeted, measurable, and aligned with their overall business goals. A well-crafted marketing strategy can help startups to stand out in a competitive market, build a loyal customer base, and ultimately drive business success.

Building Your Management Team

Establishing a strong management team is crucial for startup success, as it sets the tone for the company's culture, drives strategic decision-making, and executes business operations. A well-rounded team with diverse skills and proficiency can navigate the challenges of startup growth, adapt to changing market conditions, and drive innovation.

When building your management team, consider the following key factors:

• Leadership Dynamics : Verify that your team leaders possess strong leadership skills, can motivate and inspire team members, and foster a positive work environment.
• Team Chemistry : Assess the compatibility and synergy among team members, as well as their ability to work collaboratively towards common goals.
• Functional Proficiency : Confirm that each team member brings unique skills and specialization to the table, covering vital functions such as marketing, finance, and operations.

Identifying Funding Requirements

As startups navigate the complex landscape of growth and development, accurately identifying funding requirements becomes a critical component of their financial strategy, enabling them to secure necessary capital and allocate resources effectively. This involves determining the amount of funding needed to achieve specific business milestones, as well as identifying potential funding sources.

Understanding cash flow projections and identifying funding requirements help startups make informed decisions about resource allocation and financing options. By accurately identifying funding needs, startups can develop a robust financial strategy that supports their growth and development. This, in turn, enables them to secure the necessary capital from various funding sources, such as venture capital, angel investors, or traditional lenders.

Reviewing and Refining Your Plan

When reviewing and refining your business plan, it is vital to examine its strengths and weaknesses, revise financial projections to verify accuracy, and identify potential gaps that may impact your startup's success. This critical evaluation process enables entrepreneurs to address aspects of improvement, refine their strategy, and ultimately create a more compelling pitch for investors. By meticulously scrutinizing and refining your plan, you can increase your chances of securing the necessary funding to drive your startup forward.

Plan Strengths Analysis

A thorough plan strengths analysis involves a meticulous review of your business plan to identify its most compelling aspects, which can be leveraged to enhance investor confidence and secure startup financing. This analysis is vital in highlighting the unique value proposition of your business and demonstrating its potential for growth and success. By conducting a plan strengths analysis, you can:

• Identify Competitive Advantage : Pinpoint the unique selling points and differentiators that set your business apart from competitors, and emphasize these strengths in your plan.
• Highlight Risk Mitigation Strategies : Showcase the measures you've taken to minimize risks and overcome potential obstacles, demonstrating your ability to navigate challenges and guarantee the long-term viability of your business.
• Emphasize Key Performance Indicators (KPIs) : Concentrate on the metrics that will be used to measure the success of your business, such as revenue growth, customer acquisition, or market penetration, and provide a clear roadmap for achieving these goals.

Financial Projections Revisions

Financial projections revisions are a critical component of refining your business plan, as they enable you to review and refine your startup's financial trajectory, verifying it remains aligned with your growth objectives and investor expectations. This process involves revisiting your initial financial projections, identifying aspects that require adjustment, and implementing revision tactics to achieve accuracy and realism. Effective revision tactics include conducting sensitivity analysis, stress testing, and scenario planning to simulate different market conditions and their impact on your financial performance.

To maintain forecast realism, it is vital to base your financial projections on verifiable data and market research, rather than relying on assumptions or overly optimistic projections. This involves gathering data on industry trends, market size, and competitor performance to create a realistic and achievable financial roadmap. By incorporating realistic financial projections into your business plan, you can demonstrate a clear understanding of your startup's financial potential and risk profile, increasing investor confidence and credibility.

Gap Identification Process

The gap identification process involves a meticulous review of your business plan to pinpoint disparities between your startup's current capabilities and the resources required to achieve its growth objectives. This process is crucial in identifying areas that require improvement or additional investment to bridge the gap between your startup's current state and its desired future state.

To effectively identify gaps, consider the following key aspects:

• Industry Insights : Analyze market trends, customer needs, and competitor strategies to determine if your startup's current capabilities align with industry demands.
• Competitive Landscape : Assess your startup's position within the competitive landscape, identifying areas where you lag behind or excel compared to competitors.
• Resource Allocation : Evaluate the allocation of resources, including financial, human, and technological, to determine if they are sufficient to support your startup's growth objectives.

Frequently Asked Questions

What is the ideal business plan length and format?.

The ideal business plan length is typically 20-50 pages, with a clear content outline and concise language. Incorporating visual aids, such as charts and graphs, can enhance clarity and engagement, making the plan more effective and persuasive.

Can I Use a Template or Do I Need a Custom Plan?

When crafting a business plan, consider using a hybrid approach: leverage templates to streamline formatting and organization, but invest time in customizing sections that require unique insight, such as business strategy and financial projections, to guarantee authenticity and accuracy.

How Often Should I Update My Business Plan?

As your business evolves, it's essential to regularly refresh your plan to reflect changing market conditions, new objectives, and emerging opportunities, ideally reviewing and updating your plan every 6-12 months to ensure alignment with your company's growth trajectory.

What Makes a Business Plan More Attractive to Investors?

A business plan becomes more attractive to investors when it showcases a unique selling proposition, supported by robust market research, and presents a clear, concise, and achievable strategy for scalable growth and profitability.

Can I Prepare a Business Plan on My Own or Do I Need a Consultant?

When considering preparing a business plan, entrepreneurs can opt for a solo effort, leveraging their industry knowledge and skills. However, seeking professional insight from a consultant can provide valuable objective perspectives, refining the plan and increasing its appeal to investors.

More From Forbes

7 low-cost business ideas that can lead to high returns.

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7 Low-Cost Business Ideas That Guarantee High Returns

In today's rapidly evolving business landscape, starting a business doesn't require a massive upfront investment. In fact, some of the most successful ventures begin with minimal costs, relying on creativity, strategic planning, and a clear understanding of the market.

But with so many options available, which is the most cost-effective business to start?

Let’s explore a few business models that offer high potential with low startup costs:

1. service-based businesses.

Service-based businesses often top the list when it comes to cost-effective startups. Why? Because they primarily rely on your existing skills and expertise rather than on substantial capital investment.

Here are some examples:

• Freelance Writing or Graphic Design: If you have a talent for writing or design, you can offer your services to businesses in need of content, branding, or marketing materials. The startup costs are minimal—often just a computer and an internet connection.

• Consulting: Whether it's business consulting, financial planning, or life coaching, consulting leverages your knowledge and experience. You can start with little more than a website and a business card.

• Virtual Assistant: With more businesses moving online, the demand for virtual assistants has skyrocketed. All you need is organizational skills, a computer, and internet access to manage tasks like scheduling, email management, and customer service.


2. Digital Products

Creating and selling digital products is another low-cost business idea with high profit margins. Digital products can range from eBooks and online courses to software and design templates. These products require an investment of time to create, but once created, they are sold repeatedly as a great source of passive income.

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Ransomware gang targets google chrome users in surprise new threat twist, trump vs. harris 2024 polls: harris leads by 4 points in post-dnc survey, 3. affiliate marketing.

When choosing to use affiliate marketing , you earn commissions by promoting other companies' products or services. You don’t need to create or stock any products yourself. Instead, you focus on building an audience through a blog, YouTube channel, or social media, and drive traffic to the affiliate products. The main investment here is your time and effort in content creation and marketing.

4. Content Creation (YouTube, Blogging, Podcasting)

If you’re passionate about a particular topic, creating content around it can be a lucrative business. Whether it’s through a blog, YouTube channel, or podcast, content creation allows you to build an audience and monetize through ads, sponsorships, and affiliate marketing. The costs are relatively low, especially if you start with basic equipment and gradually scale up as your audience grows.

5. Event Planning

If you have strong organizational skills and enjoy coordinating events, starting an event planning business can be highly cost-effective. The primary costs involve marketing and possibly obtaining relevant certifications. You can operate from home, meeting clients at venues or virtually, and scale the business as you gain more clients.

6. Pet Sitting/Dog Walking

For animal lovers, pet sitting or dog walking is a business that requires minimal startup costs. You may need some basic supplies like leashes, toys, or first-aid kits, but most of the investment is in marketing your services. As you build a loyal client base, you can expand into offering additional services like pet grooming or training.

7. Social Media Management

Many businesses, especially small ones, struggle with maintaining an active social media presence. If you enjoy social media, you can offer your services as a social media manager. This business requires minimal startup costs, essentially a computer, internet access, and a deep understanding of various social media platforms.

The bottom line is that the most cost-effective business to start depends on your skills, interests, and the amount of time you're willing to invest. Service-based businesses and digital product creation are among the top contenders due to their low startup costs and scalability. Remember, the key to success in any business is not just minimizing costs but also maximizing value. Start small, focus on delivering value to your customers, and reinvest your profits to scale your business over time.

Melissa Houston, CPA is the author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business and the founder of She Means Profit . As a Business Strategist for small business owners, Melissa helps women making mid-career shifts, to launch their dream businesses, and I also guide established business owners to grow their businesses to more profitably.

The opinions expressed in this article are not intended to replace any professional or expert accounting and/or tax advice whatsoever.

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