12 Small Business Startup Costs You Should Expect

Sanjit Bhattacharya
3 min readOct 6, 2023

Starting a small business can be an exciting venture, but it’s essential to be prepared for the financial commitment that comes with it. While your entrepreneurial spirit and innovative ideas are crucial, it’s equally important to understand the various startup costs you’ll encounter along the way. To help you plan effectively, we’ve compiled a list of 12 small business startup costs you should expect.

Business Registration and Licensing

Before legally operating your small business, you must register it and obtain the necessary licenses and permits. The cost of these requirements varies depending on your location and business type, so research the specific fees in your area.

Business Plan Development

A well-thought-out business plan is crucial for securing funding and guiding your business toward success. While you can create a basic outline, hiring a professional business consultant or writer may be necessary, which can incur additional costs.

Legal Fees

Consultation with an attorney is essential for addressing legal matters such as contracts, partnerships, and intellectual property rights. Legal fees can quickly add up, so budget accordingly to ensure your business starts on a legally sound foundation.

Office Space or Workspace

Whether you’re renting office space, leasing a storefront, or setting up a home office, the cost of your workspace is a significant startup expense. Consider factors like location, size, and amenities when determining this expense.

Equipment and Technology

You may need specialized equipment, computers, software, or other technology, depending on your business type. Make a comprehensive list of your needs and research the costs of acquiring and maintaining these assets.

Inventory and Supplies

If your business sells physical products, you must purchase initial inventory. Even service-based businesses require supplies such as office materials, tools, or software licenses, which should be factored into your budget.

Marketing and Advertising

Effective marketing is essential for attracting customers and building brand awareness. Allocate funds for advertising campaigns, website development, and ongoing marketing efforts to ensure your business gains visibility.


Various types of insurance, such as liability, property, and health insurance for employees, can be necessary to protect your business and meet legal requirements. Insurance premiums can be a significant recurring cost, so plan accordingly.

Employee Salaries and Benefits

If you plan to hire employees, their salaries, benefits, and payroll taxes should be considered in your startup budget. Ensure you have the resources to cover these ongoing costs as your business grows.

Utilities and Operating Expenses

Remember monthly operating expenses such as utilities, internet, phone services, and office maintenance. These recurring costs can add up, so include them in your financial projections.


Be prepared for federal, state, and local taxes for which your business will be responsible. Consulting with an accountant or tax professional can help you understand your tax obligations and plan accordingly.

Contingency Fund

Unexpected expenses and challenges are inevitable in business. Setting aside a contingency fund for emergencies or unforeseen costs can provide a safety net and prevent financial strain on your startup.

Starting a small business requires careful financial planning and consideration of various startup costs. While the initial investment may seem daunting, a well-prepared budget and a clear understanding of these expenses will help you confidently navigate the early stages of entrepreneurship. Remember that financial planning is an ongoing process, and regularly reviewing your budget can help you stay on track and achieve long-term success in your small business venture. Accounting for these 12 essential startup costs can pave the way for a prosperous and sustainable business future.



Sanjit Bhattacharya

Entrepreneur and property developer Sanjit Bhattacharya hails from Edmond, Oklahoma. Before refocusing on real estate in 2000, his career started in marketing.