Small Business Startup Costs Explained 

What will it cost to start your business? 

There’s no magic number or list of guaranteed expenses to account for. Your startup costs will depend on your business model, industry, location, and priorities as a small business owner.

Don’t waste time guessing how much you’ll need to start your business. 

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

Startup cost examples

Here are common assets, one-time and ongoing expenses to consider:

One-time expenses

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

Ongoing expenses

• Rent
• Payroll
• Taxes
• Legal services
• Loan payments
• Insurance payments
• Utilities
• Marketing costs

Assets

• Cash to cover operations for (6-12) months
• 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.

Tips for managing startup costs

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

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