How Much Does It Cost To Start a Business

Business Cost

Are you planning on starting your own business and becoming your own boss? You are probably wondering how much does it cost to start a business.

It all depends on what kind of business you aim to get into.

Of course someone planning to start an airplane manufacturing business will need so much more than a freelancer hoping to make money online.

So there is no single figure that can be quoted as the cost of starting a business but there are some general guidelines you can follow to calculate the approximate costs of how much you will need.

To make it simpler and clearer, divide the costs into these 6 main categories.

1. Cost of Sales

Depending on the kind of business you will be setting up, the cost of sales includes purchasing raw materials, product inventories, packaging, shipping, and warehousing.

2. Professional Fees

Professional fees you will be required to pay as costs of starting a business are somewhat easier to predict than other costs.

These are the costs you will incur in setting up your business’ legal structure. They include attorney fees, trademarks, patents, copyrights, retainers for an accountant, and drawing up partnership agreements.

Cost To Start a Business3. Technology Costs

Almost every business needs to communicate and this calls for equipment. Technology costs may involve purchasing and installing computers, printers, mobile phones, and PDAs.

It may also include internet connection installation and subscription fees, servers, IT consulting fees, and security measures.

4. Administrative Costs

All types of businesses require some sort of administration for the smooth flow of day to day operations.

These costs will include stationery, business insurance, permits, licenses, parking fees, fax, copiers, telephones, and other office supplies.

You will need to buy chairs, desks, filing cabinets, and other office furniture.

5. Sales and Marketing Costs

For your business to succeed, you will need to sell products to customers. This will involve a lot of sales and marketing efforts even if you are already selling a high demand product.

The costs you are likely to incur in this endeavor include printing of pamphlets, brochures, posters, and other marketing materials.

They will also include costs of sponsoring or attending a trade show, public relations efforts, and membership of a chamber of commerce, mailing costs, lead generation costs, and the costs of travel and entertaining potential clients.

6. Wages and Benefits

For many startups today, it may be a small sole proprietorship that will not require many members of staff or even none at all.

However, you should keep in mind that even the owner needs to get paid. Some of the costs will include employee wages and salaries, worker compensation, contractor fees and tips, benefits, and employee payroll taxes.


There is no quick answer to how much it costs to open a business since it all depends on the type of business, location, and special considerations such as trade restrictions.

Nevertheless, by breaking down these costs into the above 6 main components you can easily come up with a quick estimate for your kind of business in your locality.

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