The owners of more than 30 million small businesses in the U.S. know that starting a business can be profitable. However, understanding the small business startup costs you might face is vital to the success of that venture.


Businesses of all types will encounter costs from the formation of their business to its growth.

Costs that include:

● Investments into business-to-business collaborations

● Equipment and supplies to render service

● Office equipment and furniture

● Licensing and permits

● Advertising and marketing


Fortunately, with the correct preparation, small business startup costs can be manageable. However, planning for long-term business success means knowing where your dollars are working.


Let’s dive into how business owners can plan to navigate their expenses in getting their plan off the ground.


Small Business Startup Costs of Equipment

Depending on the industry and size of the company, the small business startup costs for equipment can range from $10,000 to $125,000. Since businesses need to generate revenue immediately, most companies will need to make these purchases early on.


A purpose plan for your business and any financing you secure can help make this expense manageable. Staying profitable long-term means being able to speak for every dollar your company spends. Your business can generate more revenue if you start spending wisely.


Licensing and Permit Fees Add up when it Comes to Small Business Startup Costs

When starting a business, deciding on the corporate structure is essential. Each state has fees for incorporation that vary and carry legal implications. In addition, ensuring you are set up to pay appropriate taxes can help your business make savvy financial decisions.


Filing articles of incorporation or organization in your state means paying a filing fee of as much as $725. Fortunately, most states do not have prices that run relatively so high.

Without incorporation fees, there is still the matter of federal or state licensure.


Permits for your business might also be in order, carrying fees based on location and industry.


Office Space can come at a Premium Smart Business Startup Cost

Before your business can carve out a footprint in the marketplace, it needs a physical presence. Often purchasing or renting space is one of the first expenses. While many businesses are online today, brick-and-mortar locations still need to map an area with proper visibility.


Many owners choose to operate their businesses from home until the sizable expense of renting or purchasing can be paid. Consider that negotiating a lease, etching out a floorplan, and buying furniture is all time and money investments.


Have a plan to pay rent before moving to a location so you can start a business on the right foot.


Make Smart Inventory spending part of your Business Startup Costs

Businesses often allocate 25-35% of their spending to inventory. So even as you learn the transaction volume of your business, it can be good to have stock on hand to support current levels of customers.


Finding the ideal balance can be tricky. Too much inventory and you risk paying for stock to sit on the shelf; too little means you lose out on customer revenue.


Losing customers is not ideal, so having to wait for items should apply only to the most uncommon inventory. Even if you don’t sell the merchandise you stock, you’ll need some things to serve your clients. Backordered inventory can slow down revenue for businesses that are just getting started.


Clients will get to know your Brand from Successful Marketing

Getting clients to know about your business requires networking but also successful marketing. Costs of advertising and marketing can help spread the word about your business. Flyers, business cards, and online advertising can help improve your brand’s visibility.


Becoming a fixture in the marketplace means driving the correct ads and brochures to your target clients.


Stay Protected and Include Insurance in your Small Business Startup Costs

Just as you would never drive a car or own a home without insurance, your business needs insurance too. Protection from customers if something goes wrong is invaluable. Protecting your assets from potential disasters means peace of mind for business owners.


Your industry and the business setup will drive the insurance that fits you. Research policies that cover liability, property, and even worker’s compensation to ensure you have the protection to keep your business going strong.

From 20-30% of predicted gross sales is a solid budget projection for liability insurance.


Keep the Lights on with your Utility Payments


Business overhead can be intimidating. However, planning for utility payments can keep the lights on and simplify budgeting. Commercial buildings will need access to phone, gas, electricity, water, and internet, much like a residential.


Consider bundling these from providers who allow it and make savings count. An increase in employees for a larger space can also add to the cost of utilities.



Effective budgeting means considering what financial obligations apply to your earnings. Ensuring you have an account for revenue and expenses is non-negotiable. Stay plugged in and up to date by logging on to Small Business Bank and discovering more about the topics making entrepreneurs successful today.