There are over five hundred thousand new businesses started each month in the U.S.
Are you ready to be one of them?
Despite new businesses starting every day, it is tough out there. New small businesses only have a fifty percent chance of making it to year five. Let’s make sure you are one of the ones who makes it!
If are thinking about starting a new business the first question you have is about money. How much money does it take to start a business? The short answer is that is varies depending on your niche and type of business.
However, there are ways to calculate how much it will cost to get your new venture off the ground. Ready to get started?
How Much Money Does It Take to Start a Business?
Knowing your start-up costs will also help your business secure funding, attract investors, and estimate your initial profits. The start-up costs for a new business can vary based on the type of business you are starting and how you go about opening up.
The Small Business Association estimates that most small businesses start with about three thousand dollars. Some businesses need up to 25 grand to get going. Calculating your costs starts with understanding all the things that go into starting a business.
Start-up costs include things like, marketing, business licenses, legal advice, and staffing. If you are opening a physical business space you also need to account for the costs associated with renting or buying space and the costs of upkeep.
When figuring out how much money does it takes to start a business, its easy to forget about certain costs. Insurance coverage for your business and your physical space if necessary. Liability insurance is key.
Covering all your bases with insurance is important if you are providing a product or service and don’t want to deal with lengthy court proceedings or refunds if something goes wrong.
Keep in mind taxes you need to pay as a business even if you are starting out as self-employed. These costs can get overlooked and can lead to a hefty bill at the end of tax season if you are not prepared. Hiring a lawyer for tax and insurance purposes can help you estimate these costs and make sure nothing gets forgotten.
Tips and Tricks
Make sure you don’t run out of money by overestimating your costs. Its always better to round up when building your estimates so that you don’t come up short.
Start small! You have big dreams but big businesses took longer than a day to get there. Keep your expectations small and watch your business build growth gradually and sustainably.
Check out the start-up costs of similar businesses that already exist. This can give you an idea of what to expect for your new venture. Also, keep in mind essential or optional costs.
Keep a running list of optional costs that you might want if you end up with extra money.
Simplifying Start-Up Costs
Answering the question, “how much money does it take to start a business?” can be different depending on who asks. Hopefully, this guide can help anyone looking to start their own dream figure out the costs involved.
If are ready to make your business dreams come true, check out other advice for starting up a business and securing funding. Once you know your initial costs you can start applying for loans or looking for investors, we can help you find the right funding for you!