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Identifying and planning for your startup costs

Startup costs include anything and everything related to launching your business—whether they’re large, one-time purchases or recurring costs fixed to your daily operations. When you know the full scope of your startup costs, you’ll be able to articulate how much money you need to ask for from lenders or investors.

Startup expenses vary depending on the size of your business, your industry and what your business needs to open its doors. Consider anything and everything you can think of that you’ll need to launch, down to the number of pens you should have on hand.

Your bank may be able to help finance some of these costs, and listing them out will help identify what can and can’t be financed. For example, your initial marketing needs aren’t financeable, but your office signage and new point-of-sale system may be.

If you qualify for new business grants, having a list of costs on hand can help you see just how much of your expenses the grant covers.

Get started on your list using this Startup Costs Template.

Fixed costs

Fixed costs are related to your business operations—they’re recurring and likely won’t fluctuate much.

These include:

  • Rent or lease for office or storefront
  • Utilities*
  • Payroll and benefits (if you’re hiring employees)
  • Professional services, like a lawyer, accountant or bookkeeper
  • Everyday use software, like a customer relationship management (CRM) system, website hosting or online document storage
  • Insurance
  • Loan payments
  • Marketing*
  • Office supplies
  • Inventory
  • Franchise or trade fees
  • Membership fees for professional associations or communities, like your local Chamber of Commerce
*While these items will likely fluctuate month to month or in different seasons, they’re regular expenses to budget for, which is why they live in the “fixed” category. For example, your utilities may be higher over the winter months for heating costs, or your marketing costs may be higher during specific seasons like back to school or the holidays. 


One-time costs

One-time costs are often up-front investments in your business. 

They can include:

  • Permits and licensing
  • Incorporation fees (if applicable)
  • Legal fees
  • Signage and visual merchandising equipment
  • Improvement, design or renovation costs to brick and mortar businesses
  • Initial marketing costs, like a website build, brand design and marketing materials
  • Down payments for property or leasehold improvements, or rental security deposits
  • Major equipment, like industrial-size mixers for a bakery or a skid steer for landscaping
  • Furniture and decor
  • Technology and software
  • Consulting fees


Variable costs

Variable costs can increase or decrease based on your business performance. For example, an influencer raves about your product and it becomes your top seller, causing you to increase your regularly stocked inventory by 20%.

Variable costs can also include aspects that affect your bottom line, like shipping or raw material costs that affect your bottom line. While you may be able to work some of these into your pricing structure, identifying them earlier will give you more opportunity to plan ahead.

Find your working capital requirements

Once you’ve identified your startup costs, you can determine how much working capital you’ll need. Working capital is the amount of money you’ll need to cover your expenses until your business becomes profitable. Articulating these needs can help you decide how to fund your startup.

There’s no one size fits all formula to determine how much you’ll want to have saved, since every startup has different needs—though online or remote businesses generally have lower startup expenses compared to businesses with brick and mortar locations. It’s a good idea to have six to 12 months of capital saved as a buffer until you experience profitability.

Startup expenses will ultimately play a role in how you’ll manage your cash flow after you launch, especially if you want to finance a portion of them. Getting the financing you need to cover your startup expenses and more comes down to you and your business being “bankable.”