The road to starting a new business certainly hasn’t been easy, but so far, you’ve managed to secure a great team of employees, find an ideal first office space, and even been able to conduct solid market and competitor research.
You’re confident that your business has what it takes to beat the odds and make it as a new company — that is, as soon as you get your hands on the money to make it happen.
But before you reach out to potential investors and apply for a business loan, you need to calculate startup costs.
So, how much does it cost to start a business?
Read on to find out — and where you can go to get the loan you need to become a successful company.
How Much Does It Cost to Start a Business?
Of course, there’s no “set amount” of money that it takes to start your own business.
There are, however, numerous factors that will influence how much it might cost you so that you can make the most informed estimate possible.
For best results, set a total budget maximum for your business, and decide the percentage (not the dollar amount cost) of the budget each aspect of your business will make up.
Common expenses for starting your own business include:
- Incorporation Fees
- Office Space
- Company Website
- Shipping Costs
- Inventory Costs
- Office supplies
There may be other expenses that are specific to your niche or industry that you’ll also need to factor in.
Categorizing Expense Types
In answering the question, “How much does it cost to start a business?” you’ll also need to determine the frequency of these costs.
For example, some of the variables/expenses mentioned above may be a one-time cost.
Once you purchase a huge piece of equipment for your company, pay for your business registration and licensing requirements, and pay any fees associated with your Articles of Incorporation, you won’t have to do so again (at least, not for a long time.)
However, there are also ongoing costs (usually monthly) like paying your employees, handling office space rent, and restocking your inventory.
You’ll also need to weigh fixed vs. your variable costs. For example, you know the fixed cost of the amount of rent you pay each month. However, you may not be able to put a set number on how much you’ll pay in shipping costs or inventory replacement (variable costs.)
Finally, always consider which costs are essential (paying a web hosting platform to keep your website running) and optional (paying for a staff party.)
How Much Does It Cost to Start a Business? Now, You Know
Now that you can answer the question, “How much does it cost to start a business?” you need to ask yourself the next one:
“How will I raise the funds I need?”
Reaching out to angel investors (and even, in some cases, relatives) might get you a bit of cash, but the best way to secure money is to apply for a small business loan.
At Dealstruck, we can help you find the lending options that match your budget and business model. Apply here to start the process.