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Entrepreneurs – How Much Does It Cost To Start A Business

Lee Lister

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You’ve got your business idea, think that you will be able to get a good loan and even have your business plan being written but…. The one big burning issue is – How much does it cost to start a business?

Well you first of all have to be realistic and understand that you are unlikely to make a profit within the first six months of business – so you should also budget for your first six months running costs. So here is your shopping list:

1) Purchase of lease/franchise/premises. This will include any Realtor fees, deposits and other legal expenses.

2) Cost of fit out and purchase of new equipment. This will include any work that needs to be done on your premises as well as any equipment you have to buy in order to start and run your business. Often you can lease equipment in order to mitigate high start up costs.

3) Six months worth of advertising and marketing. This will be particularly high at the start as you establish your business. Factor in some cold calling as well as a launch party or opening day.

4) Legal, licensing and banking costs. Your business will need to be set up correctly, licensed and have a good bank account. Sadly all of these require money. You may also need a payment processing service to use credit cards.

5) Staff costs for six months. Staff will be the basis of providing good service to your new customers. Make sure that you have enough money put aside to find them, train them and keep them!

6) Uniforms, office and marketing supplies, packaging etc. You will need to establish your brand. This means that your staff will need uniforms or at the least business cards and name tags. You will need brochures, adverts etc. If appropriate you will also need standardized packaging and documentation. Your office will also need office equipment and supplies. You should also budget for designing your logo, brochures and adverts if you cannot do this yourself.

7) Stock and supplies – to keep you going for six months.

8) Maintenance for six months – your equipment will also need to keep going for six months.

9) Any loans that you have will also have to be paid. Again look at least at six months or until you break even and can pay the loan.

10) Your salary for six months – lastly you will need to pay your own bills and maintain your family during this time. You should expect that for a short while your standard of living will go down.

Add this up and add 10% for contingency

Good luck

© Copyright 2007 Biz Guru Services Ltd

Lee Lister writes as The Biz Guru, for a number of web sites including her where she sells her informational products. With over 20 year’s management and business consultancy experience with businesses large and small as well as being a serial entrepreneur, she now helps others set up, develop and market their businesses.

If you would like more help and assistance in setting up your new business then visit for advice and assistance.

This article may be freely distributed if this resource box stays attached.


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