How Much Does it Cost to Start a Business?

Cost to Start a Business

Table of Contents

What are startup costs?

Startup costs are expenses incurred before developing your business. They are essential for proper planning and risk management. By creating a detailed startup cost sheet, you gain a clear roadmap and avoid unnecessary expenses. Each business type has different costs, so list and assess them carefully. Neglecting this process leads to arbitrary decisions and potential hardships. Start right and succeed.

Understanding and managing startup costs is crucial for a successful business establishment. The cost sheet helps you track expenses and make informed decisions. Expenses incurred before sales are part of the business process. Stay conscious of your business needs and make precise purchases. Don’t underestimate the importance of this process. It sets the foundation for success.

Ensure you have a thorough understanding of startup costs. This process allows you to minimize risks and make informed decisions. By properly managing startup costs, you increase your chances of building a strong business.

Starting a business involves careful financial management and planning. Paying attention to startup costs is a critical step towards a sustainable business. Begin with a solid foundation by identifying and planning for these costs.

Remember, your startup costs are unique to your business. Take the time to assess and plan accordingly. Transition from startup to success with confidence and strategic financial management.

What are Some of the Startup Expenses?

No doubt, planning will give you a better understanding of what to expect. Just like when doing your business plan or forecasting your sales, startup expenses can also be planned. Like anything else you do in business, you need to adjust your decisions over time. If you are new to doing any business, the best way to know your expenses. When doing a startup expense sheet, look at your competition—those who already did it and are in good standing. Do not concentrate on those who couldn’t make it for some reason. Maybe they didn’t plan like you’re doing. Preparing for the unexpected is the best tactic. Remember, even when businesses are similar in categories, each will have a particular edge or competitive advantage, making it different from the rest. 

So, when searching for startup expenses, remember to make your list based on the business idea. Here is a list of the leading startup expenses a business may have.  

You can divide your startup expenses into upfront expenses and ongoing expenses. The main idea behind dividing these costs is to estimate what it will take to open a business. Then, write everything down to visualize and precisely define your initial and ongoing budgets.    

The most common expenses are:

  • One-time expenses
      • business market research
      • business design: logo and website
      • permits and licenses
      • governmental fees: incorporation fees
      • Public displays: signage
      • Business space: property rental down payment
      • Rental property improvements: bathrooms, walls, handicap ramps, lighting, racks, and others, depending on the type of store.
  • Ongoing expenses
      • If you bought the property, property rent or loan payment (if you are a new business owner, it is recommended not to purchase a property).
      • Payroll: for employees and yourself
      • Professional services: accountant, legal team, bookkeeper, marketer
      • Insurance: the price depends on the type of insurance: general liability, commercial property insurance, worker compensation insurance, or error and omission insurance.
      • Marketing: if you use Zona Shoppers, they offer the lowest marketing prices as well as memberships with marketing included.
      • Utilities: water, electricity, internet, gas, phone, and any other depending on the area
      • Taxes: no one escapes from this!


These are part of your startup costs but are associated with long-term expenses. Assets are not deducted from revenue like expenses are:

    • Inventory: you need to have some inventory to start a business. If you do services, then brochures, books, pamphlets, and other resources.
    • Equipment: it depends on the type of business. If you can find refurbished or used equipment, it will save you some money to invest in other parts of the business.  Example of equipment:
      1. Computer
      2. Vehicles
      3. Special machinery
    • Office supplies: it also depends on the type of business. If you need supplies for shipping, don’t spend money purchasing them, the major shipping companies will provide them for you once you open an account with them.  Example of office supplies:
      1. Office furniture: chairs, papers, printers

Why is it Better to Keep your Assets away from your Expenses?

Assets are valuable items owned by a business, categorized as tangible or intangible. Tangible assets include cars, buildings, computers, furniture, equipment, vehicles, and more. Intangible assets are non-physical and include patents, goodwill, copyrights, logos, trademarks, brand value, software, and customer data.

Here are examples:

Tangible Assets

Intangible Assets









Plant and Machinery

Brand Value




Software= made by the company


Customer data

Here are some of the main reasons why it is better to keep assets separate from expenses.

Assets are handled differently for tax and accounting purposes
  • For Tax purposes: according to the US-IRS, assets can be distinguished between:
  • Expensing: deducted during the first year
  • Depreciated: deducted over several years based on the useful life of the good. You can deduct tangible and intangible goods. You cannot depreciate real estate property.
  • For accounting purposes: assets are listed on the balance sheet prioritizing its liquidity. In other words, how fast you can convert an asset into cash. For example, Inventory and account receivable are higher on the list, but cash is always first if the most liquid asset. Other assets like buildings, considered fixed assets, are harder to convert into cash fast, so they are lower in the list. Being on the bottom doesn’t mean it has less value; it means it’s harder to convert in cash; in other words, it takes longer to convert in cash.
  • Assets with double use: assets used for personal and business use considered listed property are looked at very carefully by the IRS (USA). These assets include private cars or vehicles, special equipment, or other goods used for personal and business purposes. 
Assets can depreciate or be amortized 
  • Some assets go through depreciation, while others are amortized. Depreciation brings some tax benefits because you can deduct it from the taxes. Amortization is similar to depreciation in the long term, for example, 20 years. So, the devaluation is broken into longer terms.  
Assets can be used for collateral
  • You can use your company’s assets as collateral for a business loan. But (there is always a “but” when doing loans), your assets will receive a lien, which means there will be a legal claim over the property in case of lack of payment.   
Assets are the proof of a company’s profitability
  • If you have assets and liabilities, the best way to show the financial health of your business is to prove that your business has more assets than a liability. Take the value of your assets (do not include the Inventory) and divide it by the total amount of liability. The result should show that you have more cash than liabilities.  

How Much Cash Do I need To Start a Business?

All business requires cash to start.   You can raise money from investors or family; when your family comes to the table, treat them like investors because they believe in your idea. So, pay them back as soon as you have the money. It is best to make a cash flow projection to maintain a healthy balance.  

It is best to have a budget between six to a year, but the ideal is to have at least 2-3 years. If you are raising capital, even though it will be hard to request more than necessary, it is always a good idea to try. Most investors will not fall for it without a well-explained and evidenced reason to do so. A startup expenses sheet is essential to know the cash or budget you need. 

Remember to use your money wisely, because you may not receive any for a long time. If your startup expenses sheet shows you have a deficit compared to your budget, you need to lower your expenses.   

You can get more knowledge from this article: Business Startup Costs: It’s in the Details.

Startup costs vary from business to business, depending on the nature and scope of your venture. If you have a generous budget and a skilled team of professionals, you have more flexibility. However, for most individuals starting with a limited budget, it’s crucial to be mindful of expenses. Utilize a startup expenses sheet to analyze and determine your specific needs. Keep in mind that Zona Shoppers offers convenient e-commerce solutions with competitive prices and comprehensive services.

20 Common Startup Costs for a Small Business, Along with an Approximate Range of How Much Each Cost May Amount to:

  1. Business registration and legal fees: $500 – $2,000
  2. Office space or rent: $500 – $5,000 per month
  3. Utilities (electricity, water, internet): $100 – $500 per month
  4. Office furniture and equipment: $1,000 – $5,000
  5. Computer hardware and software: $1,000 – $3,000
  6. Website development and hosting: $1,000 – $5,000
  7. Marketing and advertising expenses: $500 – $5,000
  8. Initial inventory or raw materials: $1,000 – $10,000
  9. Packaging and shipping supplies: $200 – $1,000
  10. Business licenses and permits: $50 – $500
  11. Insurance premiums (general liability, property, etc.): $500 – $2,000 per year
  12. Professional services (accountant, lawyer, consultant): $1,000 – $5,000
  13. Logo design and branding materials: $500 – $2,000
  14. Market research and analysis: $500 – $2,000
  15. Initial advertising and promotional campaigns: $500 – $5,000
  16. Employee salaries and benefits: Varies based on positions and industry
  17. Training and onboarding costs: $500 – $2,000
  18. Travel expenses (for business meetings or trade shows): $500 – $3,000
  19. Maintenance and repairs for equipment or property: $500 – $2,000
  20. Miscellaneous expenses (office supplies, signage, signage installation): $200 – $1,000

These cost estimates are approximate and can vary significantly depending on factors such as location, industry, and business scale. It’s important to conduct thorough research and obtain detailed quotes or estimates from vendors and service providers specific to your business needs.

20 Common Startup Costs for an Online Business, Along with an Approximate Range of How Much Each Cost May Amount to:

  1. Website development and design: $1,000 – $10,000
  2. Domain name registration: $10 – $50 per year
  3. Web hosting: $100 – $500 per year
  4. E-commerce platform or website builder: $20 – $300 per month
  5. Online marketing and advertising expenses: $500 – $5,000 per month
  6. Graphic design for branding and marketing materials: $500 – $2,000
  7. Content creation (copywriting, photography, videography): $500 – $3,000
  8. Payment gateway setup: $0 – $500 (depending on the provider)
  9. Inventory for online product sales: $500 – $10,000
  10. Packaging and shipping supplies: $200 – $1,000
  11. Online marketplace or platform fees (e.g., Amazon, Etsy, eBay): Varies based on the platform
  12. Digital marketing tools and software: $100 – $500 per month
  13. Customer relationship management (CRM) system: $20 – $100 per month
  14. Social media management and advertising: $200 – $1,000 per month
  15. Email marketing software: $20 – $200 per month
  16. Search engine optimization (SEO) services: $500 – $2,000 per month
  17. Virtual assistant or remote team: $500 – $5,000 per month (depending on the tasks and hours required)
  18. Online legal services or consultations: $500 – $2,000
  19. Online security and data protection measures: $100 – $500 per year
  20. Ongoing website maintenance and updates: $100 – $500 per month


Starting a business, whether it’s a traditional brick-and-mortar venture or an online business, requires careful financial planning and consideration of various startup costs. While the specific costs may vary depending on the nature of the business and other factors, it’s important to anticipate expenses such as legal fees, office space, equipment, marketing, inventory, and online presence-related costs. Conducting thorough research, creating a budget, and seeking professional advice can help you estimate and manage these costs effectively. Remember to allocate resources wisely, prioritize essential expenses, and continuously reassess your financial situation as your business evolves. Proper planning and financial management can set your business on the path to success.

Startup Expenses Form with Step by Step Instructions

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