You may never know what results come from your action, but if you do nothing, there will be no result. – Mohandas Kanamchand Ghandi
Business Startup Costs Affiliate Disclosure – some of the links on this page are affiliate links, which means I will earn a commission at no extra cost to you. This allows me to keep publishing free content for you. Thanks!
Welcome to Day 4 of the 20-Day Business Startup Challenge! Today we’re going to figure out what your business startup costs.
Business startup costs are easy to find, but hard to stick to. You’ll start thinking you’re only going to spend $100, or $500, or $5000. But, once you see all the incredible tools & gadgets available, it’s easy to overspend. It’s hard to stay on budget when every new tool, class, and resource seems vital to your business.
Some items will indeed be perfect for your business. But, some will only sound perfect when they are a waste. Without a budget, it’s easy to buy every cool new tool that comes along. With your business startup costs in a budget, you are more likely to think twice before jumping into everything you see.
How do you create a budget? Let’s talk about some areas you will probably need to spend money to get your business started.
Each area listed below has links and resources so you can research what each will cost. Write down an estimate for each area (and any other areas you find in your search). Look a what you can afford and make cuts as needed. You can always add to your budget as you begin to make money in your business.
Licensing, permits, and business entity
All businesses need the proper business licensing, permits, and entity setup. But, this step doesn’t always cost money. To find out what your business needs, search online for “your city + starting a business.” Does your town require a license or permit? If so what does it cost (if anything)?
Your city is not the only place to check. Depending on where you are there may be county, state, or country regulations, so search for those as well. If your business is health or food related, check for health permits as well (usually from your county). If you are selling products, you’ll also need to check for a Sales & Use Permit with your state (for sales tax rules).
Also, if you are naming your business without including your last name, you may also need a DBA/FBN. Visit the How to Get a Business License post for details about this (also coming up on Day 7).
To learn more about choosing a business entity, visit Business Types. This post covers your options and helps give you an idea of what it may cost.
Creating a brand is an area you plan for in your business startup costs. There are free ways to build a brand, so you don’t need to worry about spending thousands of dollars here. Of course, if you have thousands, then, by all means, spend away.
You’ll want to create a logo for your new business. This can be simple. Your name in a nice font can be clean and elegant or strong and expressive. It doesn’t have to include fancy graphic elements.
If you insist on using graphics, you can create your own using Adobe Illustrator and Lynda.com. Adobe Illustrator is a program used by professionals to create graphics. Everything from logos to t-shirt designs to web banners can be created. Lynda.com is a website that has step-by-step videos showing how to use Illustrator.
Illustrator is part of the Creative Cloud program at www.adobe.com and is about $50/mo as of this writing. Currently, www.lynda.com is around $25/month. Both have a free trial period so you can check them out.
If you’d prefer to have someone else create a logo for you, check out www.99designs.com. Starting at $299, they offer packages for all sorts of graphic design elements (logos, business cards, websites, letterhead, etc.). You submit what you want, and designers from around the world compete for your business. In a few days, you get dozens of options, you then choose the one you like best.
Websites & Plugins
There are several options for building a website. You can choose a free platform such as www.wix.com, www.worpress.com, or www.weebly.com. They each have paid versions as well, but offer free small sites you can create in a couple of hours. Paid options on these websites usually include a few more bells and whistles and cost about $10-$35/mo.
If you want more customization, you can buy a self-hosted site instead. The easiest way to do this is through StudioPress.com. For about $24-$37/mo (paid quarterly or yearly), you get hosting and a StudioPress website (domains purchased separately). StudioPress builds their websites for WordPress, so you have unlimited customization options. They are the #1 WordPress designer on the market recommended by professionals.
Plug-ins are mini-software programs you can add to your WordPress website. They are what make WordPress websites so customizable. If you go with StudioPress, you will have access to these. If you choose Wix, Weebly, or WordPress.com (not the same), you will not be able to use these.
You can browse plug-ins at www.wordpress.org. Check rankings, compatibility with the latest WordPress update, and if they update often. You can search by feature type (e-commerce, social media, forums, membership areas, etc.a larger brick-and-mortar businesses). You should be able to get an idea of costs by looking at the plug-in designer’s website links.
To learn more about building a website, please visit How to Build a Website.
Professional advice is an often overlooked area, especially for solopreneurs. However, it’s important to ensure your business is built right. This area includes business insurance, privacy and terms & conditions policies, contracts, and more. Speak with an attorney about your specific business to see what they recommend.
Insurance can vary in cost depending on your business. For a small e-commerce business, you can usually find policies for around $30/mo. For larger brick-and-mortar businesses; the cost will likely be higher. Insurance will protect you if something happens (theft, fire, flood) or someone sues you.
Accounting and payroll
Your budget will also need to include a way to track income and expenses for taxes. This can be free, by using good old pencil and paper (or an Excel spreadsheet), or paid if you choose to use software.
I use Quickbooks Self-Employed for around $10/mo. There are also many others to choose from for around the same cost (FreshBooks, Xero, etc.). I chose Quickbooks since it automates almost everything, so I don’t have to spend hours on accounting. It downloads the transactions from my bank, so all I need to do is add each to the correct category. It also tracks mileage, which is awesome if you drive anywhere for business.
Not everyone needs payroll. If you are a sole proprietor with no employees, you can skip this part. But, if you will need employees or independent contractors, you’ll want to find a payroll company.
Currently, Quickbooks offers the cheapest payroll option. But, you have to self-file the tax returns and make the payments to the IRS yourself. If you’d like someone else to handle this process, they offer a more expensive version as well. Or, you can look into other payroll companies for their costs (check out www.gusto.com).
If you have employees, you’ll also need an EIN (Employee Identification Number). Some companies will help you apply for this, but you can search online for directions as well.
This includes anything you will be paying for to advertise your business. Brochures, business cards, ads on Facebook, etc. fall into this category. Think about how you will get people to your business and what that will cost. Luckily, in today’s social media world, there are tons of ways to advertise for free.
Supplies and Miscellaneous
- For this area, you’ll need to consider a few different factors:
- Are you selling a product? If so, what will it cost to build your inventory (or get it started)?
- Will you need shipping supplies or packaging? Personalized labels?
- Do you need any equipment or tools? Any special vehicles?
- Will you work from home or rent office space? Or lease a brick-and-mortar location?
- Do you need a new computer or any particular technology?
- Will you need to hire anyone? What will their salary be?
Try to think of everything you’ll need, from extra pencils to renting commercial kitchen space. But, do not overspend before you start making money. Only buy the minimum necessary to start making money.
Enter your information below to receive the Free Business Startup Costs Budget Worksheet. Research your business startup costs and fill out the budget worksheet (tab 2 has room for notes). Once complete, share your experience in the comments below – was the info easy to find? Hard? By sharing, you can help others on this journey.
Stay tuned for Day 5 of the 20-Day Challenge – Finding the Perfect Business Name. To get an email once it’s available, enter your information below.