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Small Business Startup Costs Explained
What will it cost to start your business?
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:
- Permits and licenses
- Incorporation fees
- Logo design
- Website design
- Brochure and business card printing
- Down payment on rental property
- Legal services
- Loan payments
- Insurance payments
- Marketing costs
- 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.
It helps you budget and determine if you have adequate funds to launch and operate until you’re profitable.
A detailed breakdown of startup costs can make your business more appealing to investors, as you’ll demonstrate thorough planning and financial acumen.
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.
Determine how much money you need to start
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.
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.
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.
One-page business plan template
A quick and easy way to list out your expenses and explore how they fit into your overall business.