Business Startup Costs

Before you ever make your first sale, you’ll have bills to pay. Knowing how much those bills will be and which ones will recur will help you determine the funding needed to get your business off the ground.

Depending on the type of business, your startup costs may vary, but some expenses are common to all businesses. These include workspace, equipment, supplies, utilities, licenses, permits, insurance, payroll expenses, and advertising and marketing costs, such as printed materials and website design. Make a list of these expenses, ensuring you include any that are unique to your business.

Once you have your list, divide it into one-time and recurring expenses. One-time expenses include initial costs such as opening a business bank account, paying for permits and licenses, and purchasing necessary equipment. Recurring expenses are those that repeat, such as payroll, rent, utilities, and insurance. Breaking this list down by month will give you a clearer idea of how much income you’ll need to generate.

Since most businesses take a year or more to become profitable, it’s crucial to have a plan for covering these expenses in the meantime. Once you have a clear estimate of your total startup costs, you’ll know how much capital you need to turn your business dreams into reality.