- Know how much money you need to set up your business
- Account for at least 6 months of running costs
- Do thorough research and/or get expert help
From buying equipment to building a website, from insurance to rent, the costs of starting a business can crop up in the earliest days of setting up a new business.
Knowing how much money you’ll need at the outset – and planning for how you’ll cover these expenses – is key to your longer-term success.
How much will your business set up costs be?
Unfortunately, there’s no simple answer here. The set-up costs can vary significantly depending on the type of business you’re starting.
Some of the common costs of starting a business include:
- Purchasing supplies, stock and equipment
- Connecting utilities, telephone and internet
- Insurances and licenses
- Business advisory and solicitor fees
- Marketing and PR
- Website development
All these business start-up costs should be budgeted for. Most of them are one-off expenses that need to be covered before you start generating an income.
Crunch the numbers with our business set up costs calculator
Not sure where to start when working out how much it will cost to set up your business? Our set-up costs calculator (xlsx) is here to help, with a step-by-step plan for calculating all your business set-up costs.
First, you enter all your capital costs, including the equipment and assets you’ll need to get started, as well as other one-off costs like marketing and stock. It’s important to be as accurate as possible here – which may mean you need to go away and do some research first.
The next tab covers your monthly running costs. These are your day-to-day costs, like wages and rent. Knowing these costs – and having enough money to cover the first 6-12 months while you’re establishing your business – makes good business sense.
The third tab helps you calculate potential revenue. This will give you a good idea of whether your business idea will pay off.
Be realistic, and then add a buffer
When you’re calculating your business set-up costs, it’s important to be completely honest with yourself. Take the time to research your market thoroughly and try to think of every possible expense. If you’re at all unsure, consider getting help from an accountant or mentor.
Don’t forget to add a buffer. Experts recommend adding 10% on top of the costs you estimate – just in case.
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