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In teaching people how to start a business, one of the biggest questions I get is, “how much does it cost?” Unfortunately, there’s no right answer as it depends on what type of business you are starting.
To help you determine how much your business might cost, I’ve compiled a list of what I paid to start Taykoff. This will vary for you depending on your location, but it is a general idea to help get you started.
Initial research – $26
Initially, I bought a few books that helped me understand how to research my business. I wanted to make sure it was a viable idea before I committed to it. This could have been free if I borrowed books from the library or a friend.
I talk about his step and the books I used in Business Research
Business entity and DBA/FBN Filing – $0-$500+
One of the biggest startup costs is your business entity. I live in California, so this would have been $500+ if I chose to create an LLC or Corporation. But, I spoke with my CPA, and he recommended starting as a Sole Proprietor until I reached a certain income from the business.
To start as a Sole Proprietor in my area, I only needed to get my DBA (Doing Business As) or FBN (Fictitious Business Name). In my county, this costs $23 for the application and about $19 for the required newspaper ads.
**NOTE** if you are using your surname in your business (i.e. Smith’s Boogie Shack), you may not need a DBA/FBN. Check with your county for their regulations. Countries outside of the US may also have different rules. Please check with your local government for details.
For links to business entity information in other countries, visit How to Start a Business.
Insurance and Recommended Disclosures/Documents – $30-$1030
Business insurance is a good idea to help protect yourself. Even if your business is entirely online, there’s a risk. Issues such as offending the wrong person, plagiarism, or copyright infringement can cause lawsuits. Insurance can help provide some protection if this happens.
To get a quote, search online for business insurance. Be careful when requesting a quote from one of the general websites (the kind that will give you quotes for several insurance agencies at once). Some of these insta-send your phone number to about 20 insurance agencies, and you get killed with calls.
I found a company called Hiscox that specializes in business insurance. I was quoted about $30/mo for a general liability policy. There were other policies I could buy if I needed more coverage as well (if I had a physical location or equipment to protect).
I can’t stress enough how important it is to consult an attorney before starting a business. They are the only one’s qualified to give you specific recommendations for your business.
Business License/Permits – $0+
This could have been a lot more as well, but my city in California does not charge for business licensing or permits. They only asked for a Home Occupancy Permit since I am conducting my business from home.
Search for your city or town in Google and look for their Business links. The website should say whether or not they require a license and what it costs. If you can’t find it, give them a call – they are usually happy to help.
When calling, you also need to check on required permits. Some industries, such as food or construction related businesses, will need health and building permits to get started.
Bank Account – $0+
Some banks offer free checking accounts to businesses. But, each bank has a minimum deposit requirement, so you may need some cash to get you started. You can get a list of banks that offer free checking at Nerd Wallet.
For more about this step, visit How to Set Up Banking and Accounting.
Accounting Setup – $5+
This can also cost a lot more if you choose to hire a bookkeeper or go with a more expensive accounting software. I chose the Self-Employed version of Quickbooks. They have a special (as of this posting date) for 50% off for the first six months, so it was only $5 to start.
Brand building – $29-$300+
Once again, this can cost more if you hire someone to help. 99 Designs is an online design company that offers design packages. They start at $299 depending on what you need. You can also choose to hire an individual or company if you prefer (this would likely cost a little more).
I have experience with Adobe Illustrator, so I chose to create my logo and design. I just had to buy a couple of photos from a stock photo website, so I wouldn’t run into copyright or trademark infringement.
If you want to do it yourself, you can buy access to Adobe’s Creative Suite for around $50/mo. This gives you access to Illustrator, Photoshop, and more. You can also get online training for these programs from Lynda.com for about $25/mo.
Build a Website – $0-$297
If you prefer something a bit more customizable, I recommend Bluehost and WordPress.org or StudioPress. Both offer inexpensive plans to get you started. I recommend this method for people who are somewhat tech savvy. If you are not, I would go with a website builder such as Squarespace.
For details on building a website, visit How to Build a Website.
Miscellaneous – $150 or so
This is for any extra tools for your website and miscellaneous supply costs. This cost can be quite high depending on how many tools and supplies you choose to add. It’s easy to go crazy, so be sure to establish a budget and stick to it.
So, where does that leave me? If my math is correct, my business startup costs are sitting around $1643 to get my business off the ground. I could have done it for a lot less or a lot more but felt these were the items most important to my business.
Remember, I’m a sole proprietor with an online business, so my costs are not as high as other types of businesses. Were I to start a brick and mortar or franchise, this would have cost far, far more.
Visit how to start a business step-by-step for more details on how to build a business.
**Please remember, I’m not a professional Lawyer or CPA, so this is just my experience. Please consult a professional for advice on your specific business.