{"id":5502,"date":"2016-04-04T10:48:00","date_gmt":"2016-04-04T15:48:00","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/starting-a-business\/sample-estimate-of-start-up-costs.html"},"modified":"2026-06-10T00:27:00","modified_gmt":"2026-06-10T05:27:00","slug":"sample-estimate-of-start-up-costs","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/sample-estimate-of-start-up-costs.html","title":{"rendered":"Sample Estimate of Start-Up Costs"},"content":{"rendered":"\n
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Sample Estimate of Start-Up Costs<\/h1>\n\n
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Created by FindLaw’s team<\/a> of legal writers and editors<\/i><\/p>\n\n | Last updated\n

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Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Key Takeaways<\/h2>\n

Business startup costs are the total expenses incurred by an entrepreneur to launch a new company before it begins generating revenue. These initial expenditures typically include major outlays for commercial rent, equipment leases, inventory, permits, and professional fees for legal or accounting services. Accurately estimating these hidden and obvious capital requirements within a formal business plan is essential for securing external financing through bank loans or equity investors.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n\n

Entrepreneurs have much to consider when starting a business<\/a>. Choosing the business name, business structure, and office location are some of the first and most important steps in starting a business \u2014 although the most successful ventures begin with a solid business plan. It\u2019s also important to consider startup costs<\/a> when making the decision to start a business, since even the most well-conceived business idea will not flourish without the right amount of capital. Knowing the estimated startup costs, and projected cash flow can help you determine if the business is feasible, and whether or not you will need financing.<\/p>\n

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Estimating your first year\u2019s business costs is not a very difficult task, but it takes substantial time and research to do it right. There are many obvious costs, such as payroll and facilities, as well as some hidden ones. The following worksheet of common business startup costs can help you estimate what your new business’s costs might be. Please note that the items listed in this worksheet are just examples and may or may not apply to your business. You will need to figure out other startup costs that apply to your particular venture.<\/p>\n

Startup Budget Template<\/h2>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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Rent<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n

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Improvements\/Build-Out<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n

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Salaries\/Wages<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n

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Payroll Expenses<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n

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Equipment Leases (copiers, fax machines, telephone system, computer)<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n

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Furniture<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n

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Supplies<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n

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Inventory<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n

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Advertising<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n

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Utilities<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n

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Licenses\/Permits<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n

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Insurance<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n

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Accountant’s Fees<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n

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Attorney’s Fees<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n

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Other Expenses<\/p>\n<\/td>\n

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$<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Form your LLC with confidence.\u202fOur trusted partner LegalZoom has packages starting at $0 + filing fees.<\/a><\/i><\/b><\/p>\n

Startup Funding Sources<\/h2>\n

As previously mentioned, estimating your startup costs can help you figure out if and how much you will need in order to finance<\/a> your business. Most business owners will finance at least a portion of their business, often through a combination of debt and equity. There are many options for financing your business, each with its own benefits and risks.<\/p>\n

Money from Family and Friends<\/em><\/strong><\/p>\n

One resource for financing is family or friends. It\u2019s important to really think about it before doing so, though, since it has the potential to strain your familial relationships or friendships. If you don\u2019t want to risk your personal relationships, or don\u2019t believe that your family and friends have the money to finance your business, you have several other options.<\/p>\n

Loans<\/em><\/strong><\/p>\n

You can get a loan from a bank or from one of the loan programs offered by the U.S. Small Business Administration (SBA)<\/a>. Any loan program has its own eligibility criteria. You can also always use your credit card. While using a credit card is the most costly way to finance your business, it can be a good option if you don\u2019t qualify for a loan.<\/p>\n

Equity<\/em><\/strong><\/p>\n

Businesses also may consider offering equity in exchange for investment capital. In this arrangement, investors provide capital in exchange for a percentage of the company. The portion of the company \u2014 typically expressed in terms of “shares” \u2014 increase in value as the business becomes successful, but must be liquidated through an acquisition or public stock offering. Of course, the investor may not see any return if the business goes south.<\/p>\n

The Importance of a Business Plan When Estimating Startup Costs<\/em><\/strong><\/p>\n

When looking for people or companies to finance your business, it\u2019s important to have a business plan<\/a>. A detailed business plan will give your investors knowledge and confidence in investing in your business. Including an estimate of startup costs in your business plan can be very beneficial to both you and any investors.<\/p>\n

Once you have estimated your startup costs, you should also determine your fixed costs and ongoing business expenses to know when you will break even. Add monthly expenses and annual costs to your expense categories to make sure you are aware of all the operating expenses you may incur.<\/p>\n

Don\u2019t Take Any Chances: Meet With an Attorney Before Starting Your Company<\/h2>\n

There are plenty of decisions and tasks involved in starting a business, particularly the universal question of how to fund it. While an attorney will increase your startup costs initially, hiring a small business attorney to assist you in starting your business and plan for startup costs will pay dividends later on. Get a head-start today by meeting with an experienced business attorney<\/a> near you.<\/p>\n

Looking to start your own business? Use FindLaw\u2019s trusted partner, LegalZoom<\/a> to get a legal business entity set up in minutes.<\/p>\n

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