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Suanny Garcia
By: sgarcia
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How Much Does It Cost to Start A Business?

Maybe you’re wondering how much does it cost to start a business because you see it as the most important thing you’ll need, and you’re right.

In this article, you’ll discover how much it’ll cost to start in the most common industries, and we’ll explain to you how to calculate start-up costs.

Although many small business owners launch their business on a shoestring budget, sometimes it is advisable to have some capital to fall back on, whether it be $10,000 or $100,000 — depending on the size of your business and the industry you choose.

How to Get Money to Start a Business?

There are several ways that you can get capital to start a business:

    • Get a loan: You could get a startup loan. These are the best alternatives because banks and lenders created them with your needs in mind. Another option is a personal loan, which is also a good alternative but not ideal.
    • Borrow from family and friends: This can turn into a sticky situation if you fail to pay back the money. Family members and friends want you to succeed, so most won’t charge interest (although they could). You should put in writing the terms of the loan agreement to include repayment terms, the length of the loan, and other pertinent details.
    • Use money from a personal savings account: If you can keep 6 to 12 months of living expenses in your savings account, then it’s okay to make a withdrawal. Otherwise, you shouldn’t.  
    • Credit cards: Shop for a credit card with the best deal (lowest rate and terms). Unless you can pay off the credit card balance each month, fees and interest add up quickly.

    Camino Financial offers alternative financing to help you start a new business or strengthen a startup. 

    Loans range from $1,500 to $7,500 at a fixed monthly rate for terms 12 to 36 months. Getting a loan takes 3 steps

    1. Complete the application in less than 5 minutes
    2. Allow us to review your income using Plaid
    3. Verify your identity. 

    The best part is that you can have cash deposited into your bank account in as little as 2 days.

    Apply For A Startup Loan!

    businessman searching on the computer

    What Are Start-Up Expenses?

    Start-up expenses definition: They are the expenses you incur before you launch a new business. You have to estimate it and reflect it in your small business plan.

    They may include legal paperwork, business licenses, location expenses, starting equipment and inventory, and basic marketing costs.

    In other words, the costs of starting a business before you begin making any income.

    Average Cost To Start a Business

    According to the 2007 Census Data from the SBA, business start-up costs on average stated that 70% of entrepreneurs used less than $25,000.

    And that 44% of these entrepreneurs started their business with less than $5,000.

    According to writer and professor of entrepreneurial studies and economics, Scott Andrew Shane, in 2008, the business start-up costs of a business were $31,150.

    Discover the Most profitable small business industries

    How to Calculate Expenses According to Types of Startup Costs

    Small business owners have to calculate how much start-up funding they will need with accuracy; keep in mind the following tips.

    Understand the Business Startup Costs

    You will have to break the average cost of launching a business down to see what the cost might entail.

    If you make a detailed plan, you are less likely to run out of capital a few months down the line.

    Business Start-up Costs List

    What do you need to consider when trying to find out the cost of setting up a business? Start-up costs examples may include but are not limited to:

    • Market research
    • Equipment
    • Office space, furniture, and office supplies
    • Utilities
    • Inventory
    • Advertising, promotion, and marketing strategy
    • Website
    • Staffing and wages
    • Accounting
    • Legal advice

    The amount of a new business cost may differ: for example, you won’t incur office charges like monthly rent or internet connection if you work from home.

    Couple Running Organic Food Store Together

    Other Expenses and Hidden Start-Up Costs

    There are some expenses you’ll have to add to the cost of running a business.

    Many entrepreneurs often overlook these added expenses. So that these may not creep up on you in the process, check out the following hidden expenses required to start a business are:

    Business Insurance

    It’s possible that you won’t need it for online business start-up costs. But it is something you’ll want to consider, perhaps not right away, but early on.

    If you have a lot of inventory on your property, there’s a good reason to get property insurance because anything can happen, from a fire to a flood.

    If you want to avoid the risk of a customer suing you, you probably wish to have liability insurance.

    You’ll want to consult with an expert on what is the most appropriate coverage for your business.


    It can be an unpleasant surprise, unfortunately, and are unavoidable even for self-employed individuals.

    Personal or legal fees, permits, and licenses

    You may need to hire a tax professional or lawyer to help you set up your business, and you may also need a professional to help you apply for a permit or license.

    Other Tips & Tricks to Calculate the Cost of Starting a Business

    Starting a business doesn’t need to be an overwhelming feat. By following some tips, you can make estimating realistic start-up costs:

    1. Check other similar businesses. Research the financial statements of any publicly listed business in your industry. Although you won’t have all the average start-up costs they do, this will help you see what they are spending their money on, ultimately helping you deduce what a worthwhile investment is.
    2. Estimate ongoing vs. one-time costs. Be sure you estimate which costs you’ll pay month-to-month or year-to-year and which will only be one-time start-up costs or payments.
    3. Overestimate start-up costs. Many experts recommend adding 10% to your business cost to account for unforeseen or miscellaneous expenses.
    4. Essential or optional? While identifying these costs, decide whether they are essential or optional. A realistic start-up budget should only include those things that are necessary to start a business.
    5. Fixed or variable costs? Establish which costs fall into which category. Fixed expenses include rent, utilities, administrative fees, and insurance costs. Variable expenses include inventory, shipping and packaging costs, sales commissions, and other costs associated with the direct sale of a product or service.

    Small business administration has a great tool that will help start-up business owners to create a budget to start.

    How to Save on Start-up Costs

    These tips will help you start your business with the least amount of capital:

    • Whenever possible, complete the work yourself. For example, purchase accounting software to write checks, track payments, and print financial statements. That way, you save the costs of hiring an accountant.
    • If possible, have a virtual office rather than rent office space and pay utilities until your business is financially able to handle those types of payments.
    • Outsource work to freelancers for specific tasks, thereby saving employer and payroll costs. You can also save money by hiring an intern.
    • Stick to a predetermined business budget. It doesn’t take long to overspend if you don’t know where the money goes.
    • Buy items you’ll use over and over in bulk. Examples include office supplies and materials used to manufacture products. Call your suppliers to find out if they offer discounts on bulk orders.
    • Purchase used equipment and office furniture that’s in good condition.
    • Take every tax deduction that’s coming to you. A short 2-hour meeting with an accountant will pay off handsomely so you know which start-up expenses you can write off, which increases profit.
    • Market your product or service using multiple social media platforms rather than pay a marketing consultant.  

    successful business woman standing in front of employees

    What Are Examples of Start-up Costs?

    • Licenses and permits
    • Office rent
    • Equipment and supplies
    • Office furniture
    • Website development costs
    • Market research
    • Legal and accounting fees
    • Inventory
    • Advertising and marketing costs
    • Payroll
    • Utilities
    • General liability, commercial property, and workers compensation insurances
    • Consultants
    • Printing and design fees: business cards, brochures, banners, ads

    Business Start-Up Expenses for 10 Common Industries

    Below are a few average figures for start-up costs. Please note, these are simply averages and estimations: many small business owners continued to launch their business with less than half of these average costs.

    Within each industry, there are many variations and no one-fits-all formula for small businesses.

    Food Services

    How much money does it cost to start a business in the restaurant and food industry?

    The typical cost to start a business in this category is $125,000.

    You can also opt to buy a restaurant franchise, which will significantly reduce your start-up costs.

    You can hit the ground running by purchasing another agent’s clients. You can negotiate these costs between agents and represent the bulk of your start-up costs.

    Restaurant franchises usually cost $25,000 to $50,00 on a low budget.

    Another idea is starting a food truck, which is an increasingly popular option. How much does it cost to start a food truck business? It can cost you from $30,000 to $200,00.

    Learn more about restaurant costs

    Real Estate

    Real estate agents have a passion for houses and helping people buy them.

    After you’ve taken the training, paid the fees ($700), and passed the exam, then you need to find a real estate broker. The broker assumes responsibility for the day-to-day operations saving you those costs.

    Most brokers charge anywhere from $25-$500 per month, so you can operate as an agent. Tax-related expenses include annual membership dues ($200) and marketing costs ($1,000+) for business cards, a website, and advertising your properties.

    Keep in mind that the costs to start a business are may include the gas money you’ll expend traveling to show properties, the lunches with clients, and costs for a home office. You should also budget for continuing education ($50-$300 per year) to stay up to date on licensing. All of the above quickly add up as start-up costs in a real estate business.

    Health Insurance

    Providing health insurance to businesses and individuals can be a lucrative endeavor as everyone needs protection. How much does it cost to start a business as a health insurance provider? The cost of starting a business in this category range from $5,000-$50,000 and include these typical expenses:

    • Each state requires that you take general education and ethics courses that range anywhere from $300-500 per course. Many are available online so that you can progress at your own pace.
    • After you’ve completed the necessary credit hours for these courses, then you can take the licensing exam for each insurance category (set aside about $50 for each exam).
    • If you set up your business from home, you’ll save substantially on start-up costs. For example, you won’t be paying for rent, furnishings, and additional utilities.
    • You can hit the ground running by purchasing another agent’s clients. These costs are negotiated between agents and represent the bulk of your start-up costs.
    • Management software helps complete administrative tasks within the insurance industry. Plan on spending $50-$300 per month to access the software’s features.

    Personal Trainer

    How much does it cost to start a business as a personal trainer?

    On average, it’s possible to shell out $8,000 to $10,000 before you ever train your first client.

    Remember, you’ll need that amount of working capital to launch your training business. If you lease space at a gym or health club, they usually collaborate with certified trainers ($1,000-$1,500). Leasing space and paying utilities could cost $2,300 or more per month. Some trainers save money by meeting with clients at their homes.

    Regardless of where you provide personal training, you may spend up to $5,000 for equipment.

    Since you need to track your clients’ progress, allocate roughly $1,000 for software and a laptop. Budget another $750 to cover office supplies, clothes, and website fees/maintenance. Furthermore, it’s essential to have money for your business license and other fees required by your county or city ($600).

    Auto Repair Shop

    How much does it cost to start a business repairing and maintaining vehicles?

    Stocking auto repair equipment in your shop isn’t cheap.

    Lifts are a necessary expense to work under cars and trucks and cost $4,000+ each.

    More than likely, you may already own an inventory of tools. If you don’t, plan to pay $15,000 to purchase the manual and electric hand tools, jack stands, multimeters, tool chests, and other essential supplies.

    By themselves, diagnostic machines average between $5,000-$10,000.

    Many auto mechanics acquire ASE certifications to stay competitive in their field, which costs about $500 to pay for study guides and exam fees. Other standard start-up business costs include permits, advertising, and liability insurance ($3,000-$4,000). If customers don’t pay on time or you have slow periods, you’ll need cash on hand to cover ongoing costs.


    How much does it cost to start a business in retail? The average cost of starting a business in retail is $32,000. However, 42% of small business owners reported opening a retail store with only $5,000.

    Some start-up costs stay relatively constant whether you open a retail clothing store or sell furniture or arts and crafts. For the first month, you will require a security deposit to lease space and secure utilities, as well as the first month’s rent.

    All of this may add up to more than $3,000 as start-up costs. Don’t forget to allow another $3,000 to $7,000 to customize the rental space, buy store fixtures like shelves and bookcases, and have in mind other miscellaneous expenses.

    Keep in mind that if you start online businesses in the retail industry, the overhead expenses will be lower than in a brick-and-mortar shop.

    Apply For A Business Loan to Start a Business!

    young CEO leading multiethnic team in office

    Professional services (lawyers, veterinarians, accountants, architects, photographers…)

    How much does it cost to start a business if you want to provide a professional service? The average cost of a start-up is $18,000. Over 54% of these professionals needed less than $5,000, and fewer than 13% spent $50,000 or more.

    To comply with state and local authority regulations, you’ll need to purchase the necessary licenses (upwards of $1,000). When offering a professional service, it’s wise to draft and sign legal documents to operate your business as an LLC, LLP, or a sole proprietor. Expect to pay at least $4,500. Additional start-up costs include:

    • Licensing specialized software for your service niche ($3,000-$5,000).
    • Hiring graphic designers to make professional brochures and create a website ($5,000).
    • Buying office furniture, computers, and related supplies for your service ($2,000-$4,000).


    How much does it cost to start a business in the construction industry? The average cost of starting a business in construction is $14,000, with half reportedly starting their business with less than $5,000. In addition to hiring a lawyer to help you register your business name with the state, you’ll pay licensing fees and advertising costs ($4,000-$6,000).

    Many contractors already own tools but find they need more specialized equipment when they take on larger projects.

    Set aside $5,000 and increase your tool budget as your business grows. The contractor’s insurance protects you and others when injured on the job site. It’s possible to bundle your business owner’s, liability, and surety bond insurances to save money ($1,000-$2,500).

    Learn more about the costs of running a construction business


    If you already own a van, why not transport people to work, the airport, and other locations?

    You could also use the vehicle to help people move or provide services to seniors.

    In addition to licensing and insurance start-up costs already mentioned for other professions, here you have a breakdown of the cost of starting a business in transportation:

    • Assuming you already own your van, you’ll have ongoing maintenance expenses to service the vehicle. Budget $300-$500 per month to allow for unexpected repairs.
    • Fuel gas cards mean you don’t carry extra cash to buy gas. Expect to pay $40.00 a day or more for one vehicle when your transport schedule is full.
    • You’ll need business cards and flyers to hand out ($200).
    • As your business grows, you may decide to set up an office. As discussed earlier, you’ll pay rent, buy furniture and office equipment, and pay other operating expenses.

    Language Translator

    Since most translators start their businesses at home, they can set up an office without renting space. How much does it cost to start a business as a translator?

    • Good lighting, a comfortable chair, and adequate desk space to work are essential purchases ($500).
    • You’ll need a computer with sufficient RAM to multitask and a high-speed internet connection ($800).
    • A printer is a must-have as well as accounting and translation software ($1,500-$2,000).
    • Most translators invest in continuing education courses to hone translation skills and learn other languages ($500-$1000).

    Moreover, you’ll also pay typical start-up costs like setting up a legal entity, creating a website, and paying marketing costs ($750-$1,250). Whether you prefer a personal library or access software apps online, you may want to invest in grammar books and dictionaries ($200+).

    Female Owner Of Independent Clothing shop

    Are you ready to start your own business? Make sure to get informed about all the resources you need to start a small business

    Starting a Business During an Economic Crisis

    If you are considering starting a new business during an economic crisis, we recommend waiting a bit more while things start going back to normal.

    If you’re thinking of starting a business to support your finances during hard times, you need to be very careful and think things through: while the typical costs might be the same, things will not be the same as during a normal situation.

    You also need to think through what type of business you’ll start, as many industries will be hit especially hard. Also, business costs might go up during a crisis.

    But there are two sides to the same coming: many businesses will be booming during tough times. It’s also important that real estate tends to be cheaper during a financial crisis, so it could be a good time to rent a location for a lower price.

    Portrait Of Male Florist Outside Shop Smiling To Camera

    It’s Time to Start your Business!

    It doesn’t matter how you choose to begin your business; you need to plan ahead of time and allocate costs. If you are totally aware of the business start-up costs, you are sure to prevent yourself added stress in the future. That’s why we are happy to have answered the question, “how much does it cost to start a small business?”

    If you are have embarked on the adventure of running your own business, small business loans can bring the injection of capital you need to buy equipment, hire staff, or make renovations.

    In these initial stages, a loan from Camino Financial can be the solution! We love helping small businesses thrive and achieve success.

    When you apply for a loan, you’ll know instantly if you qualify for one of our loan products, and you can receive the capital in as fast as 2 business days!

    Apply now!


    FAQs on How Much Does It Cost To Start A Business

    How Much Does It Cost to Be an Entrepreneur?

    In dollars and cents, costs vary widely depending on your business industry. 

    But entrepreneurs deal with more than the monetary aspect of running a business. They weigh the consequences of working long hours, hiring the right people, and exploring every opportunity to create revenue. 

    Building a business takes money, enormous energy, know-how, and being responsible for making tough decisions no one else can.

    How to Estimate Costs of Starting a Business?

    First, research your business industry to determine typical expenses business owners pay. 

    Calculate the total costs by segregating costs into expenses you pay once and adding what it costs to run your business day-to-day. 

    Once you come up with a close ball-park figure of expenses, plan to set aside an emergency fund covering 6 to 12 months of expenses.

    How Much Are Legal Fees for Starting a Small Business?

    Depending on your business’s entity and complexity, you should plan to spend anywhere from $1,000 to $5,000. 

    Your first year of legal fees will be higher than in future years because you’re setting up your business structure to operate your business legally. 

    It’s a good idea to compare lawyer fees in advance because they charge different rates.

    How Much Should I Save Before Starting a Business?

    At a minimum, you should save an equivalent of 6 months of living expenses. 

    According to a 2019 consumer expenditure survey, the average monthly expense for one person in the $3,189. So that’s $19,134 you should have, at least.

    Depending on the average startup and operation costs for your specific business industry, you could need less or more. 

    What Business Can I Start With $2,000?

    Here are some examples of businesses you could start with as little as $2,000.

    • Maintenance Worker: Landlords need help to make repairs at apartment complexes and single-family dwellings. 
    • Seamstress: If you love to sew, why not work from home and repair people’s clothes, make quilts, or create your own fashion line.
    • House Cleaner: You can get paid for something you already do, such as cleaning. Customers need their homes vacuumed, dusted, and bathrooms cleaned. Some pay for house cleaning services to make beds, wash and fold laundry, or wash windows.

    Is Starting a Small Business Worth It?

    Starting can be a really tough but rewarding experience.

    Potential business owners must know it’s up to them whether they succeed or fail. Starting a business can be extremely tiring from working long hours, plus, they might not see a real profit for a long period. The buck stops at their desk.

    However, most entrepreneurs take pleasure in starting a business and being in charge of making their business dreams come true. 

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