How Much Money Does It Cost to Start a Business

by Irune

While there are many small business ideas that can be started with no capital, it's important to be able to evaluate how much money would your business idea need to get started.

Let’s start with saying that there’s no ballpark figure that can answer the question of how much money does it cost to start a business, because each business is different and has different requirements. However, if you are thinking of starting your own business you can follow this list to evaluate how much money it will cost you to start up.


Without a doubt, this is often the most expensive business expense that you may incur when starting up, and it depends heavily on your particular business requirements. Even online money making schemes need a computer and an Internet connection, though you can lower your costs by using equipment you already own and working from places with free Wi-Fi to start with. If you need to purchase business equipment it is worth it making a list and taking your time to investigate the cheapest options, including possibly second hand items or auctions. If you are short on start-up capital make a list of what you need to start generating revenue, and stick to buying only that at the beginning.

Office Space

Not all businesses are suitable as work from home business ideas and you may find yourself having to rent business premises somewhere else, even if you are the only one working for your company. To lower costs, you may want to consider shared working space such as managed offices, very popular among creative professionals that find the lower costs and the presence of complementary businesses a great asset.

Depending on the arrangements you enter with your business landlord you may need to pay a deposit and several months in advance, as newly created small businesses don’t usually enjoy high credit ratings and landlords like to lower their risks as much as possible. Along with office space you will also need office stationery and supplies.

Marketing and Advertising

Most small businesses will benefit from having at least a minimal presence online, even if it’s just a few pages on a brochure style website. If you are not a professional web designer you may want to budget for a professionally developed website, as DIY solutions may sometimes not look professional enough. You will also need a domain name and hosting, but those are usually very inexpensive items. If you are looking at doing business primarily online you’ll need to budget for marketing, both long term initiatives such as SEO or article marketing and short term ones such a campaign to announce you are open for business.

A pack of business cards is also a must have for any entrepreneur looking to get new clients, and in some cases a small brochure explaining your main products can be valuable. While it’s true that it’s possible to take a do it yourself approach to marketing even if you aren’t experienced, you may want to consider if you have the time to learn all about online marketing or do it before you launch your business so your marketing strategy is ready when you do.

Other Start-up Costs

Don’t forget to account for things such as any fees payable for registration of your business or business permits, and check how long those permits will take to be ready or you may find yourself in business but unable to actually do business. Other start-up costs that should be considered are professional fees for an accountant and a professionally developed business plan.

Business plans are often overlooked by small entrepreneurs but they can be a great help in terms of actually estimating the running costs of a business and its viability. If you are looking at banks or government grants to get money to start a business, a professional business plan is one of those costs that will pay by itself. The same goes for a good accountant, who will be able to advice you on the most effective tax arrangements for your personal situation, and what other ways of saving money are available for your business.


Updated: 11/11/2011, Irune
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