Small Business Start-Up Costs For 2023

Your potential customers are using social media every day—you need to be there too. Use social media to drive traffic back to your website where customers can learn more about what you do and buy your products or services. A corporation limits your personal liability for business debts just as an LLC does. A corporation can be taxed as a C corporation (C-corp) or an S corporation (S-corp). S-corp status offers pass-through taxation to small corporations that meet certain IRS requirements.
You should have at least a few months’ operating costs set aside before you start your business. If additional resources don’t have enough, or if you can’t cut business startup costs, you can look into additional financing. For example, you could apply for an SBA or bank loan, apply for an investment, or apply for a business credit card.
In addition to these costs, you need to account for initial organizational startup costs like legal, licensing, incorporation, and permitting fees. Some home-based businesses like dropshipping may only cost $500 in total to start, and there are plenty of options out there if you need to seek extra funding. This, of course, does not apply to information/service-based businesses, such as consulting businesses. The U.S. Small Business Administration (SBA) offers small businesses different types of loans, including 7 (a) loans, 504 loans and microloans. SBA-guaranteed loans have competitive rates and fees compared to non-SBA loans and provide unique benefits, such as flexible overhead requirements and no collateral. In stark contrast, ongoing costs should not alter your monthly cash flow since they are included on a regular basis in your overall budget.
You’ll want to minimize expenses as much as possible without sacrificing quality for big-ticket items. This will mean that your research will include equipment capabilities, reviews, maintenance costs, and warranties. After you’ve made a list of your expenses, it’s time to research. You’ll need to estimate the cost of each item on your list for an accurate estimate. As a new business, there may be many tasks that you try to manage on your own to save money. The cost of professional services, after all, can be pricey—running anywhere from $75 to $400 per hour.
Katherine Haan, MBA is a former financial advisor-turned-writer and business coach. For over a decade, she’s helped small business owners make money online. When she’s not trying out the latest tech or travel blogging with her family, you can find her curling up with a good novel.
Nate Masterson, the marketing manager at Maple Holistics, estimates that the total cost for office furniture and supplies would be around $5,000. In all, though, Masterson recommends keeping your furniture and supply costs to approximately 10% of your budget. The average amount to start a professional, scientific and technical services firm is $72,046. For the 402,654 responding companies, startup costs totaled $29 billion. The construction industry has the lowest average startup costs in our study at $67,349. And though 300,176 firms reported costs, their combined startup expenses cracked just $20.2 billion.
Industry associations and local business associations, like your Chamber of Commerce, may be able to offer advice. If your city has officials who work on economic development issues, they may be helpful too. Getting an employer identification number (EIN) is necessary for most businesses to file taxes, open bank accounts and perform other essential tasks. The legal structure of your business can affect everything from your taxes to what you’re liable for. Talking with a tax professional can help you choose the right business structure for you. While you may have a winning business concept, if you’re like many aspiring business owners, there’s one thing holding you back — finances.
Content marketing ideas include videos, customer testimonials, blog posts and demos. Consider content marketing one of the most critical tasks on your daily to-do list. There are many bookkeeping services available that can do all of this for you, and more. These services can be accessed online from any computer or mobile device and often include features such as bank reconciliation and invoicing. Check out the best accounting software for small business, or see if you want to handle the bookkeeping yourself. Legal requirements are determined by your industry and jurisdiction.
Depending on the size and type of furniture needed, this can cost a few hundred dollars to several thousand. Incorporation involves setting up a business structure and filing all the necessary legal paperwork with your state and local government. Whatever you do, don’t underestimate your costs or try to force your costs to fit the amount of money you have available.