A practical guide
How much does it cost to start a business?
It depends on the business, and the useful number is the one you build from your own list.
Published November 3, 2026 · Luke F. Walton
The honest answer is that it depends. A consulting practice run from a laptop and a small shop with a lease are different kinds of money. An average across them would not help you.
The number that helps is yours. You build it from a list, and you can start the list today with what you already know.
Separate one-time costs from monthly costs
The SBA draws a plain line in its guide to calculating your startup costs: “One-time expenses are the initial costs needed to start the business.” Monthly expenses are the ones that come back, which the SBA describes as “things like salaries, rent, and utility bills.”
Keep the two lists apart. One-time costs are what you pay to get to your first day: equipment, a deposit, a sign, the first batch of stock. Monthly costs are what it takes to stay open: rent, software, insurance, fuel, your phone.
If you mix them, a small monthly cost looks cheap beside a big purchase, and you stop seeing it. It is still there every month.
Add working capital
Sales rarely cover your monthly costs on day one. Working capital is the cash that carries you until they do.
A simple way to estimate it: take your monthly costs and decide how many months you could go before sales cover them. Multiply. The SBA suggests counting at least a year of monthly expenses when you plan. That is a way to think about the question, not a rule you must follow. A person with another income and a small cost base may need much less. A person leaving a paycheck may want more.
The point is to pick a number on purpose, and to be able to say why.
Find the gap
Add the one-time costs to your working capital. That is what you need. Then write down what you actually have, and what you could commit without putting your home or your essentials at risk.
What you need minus what you have is the funding gap. If it is zero or less, you can start with your own money. If it is more than zero, you have a decision: start smaller, wait, or look at funding. Each of those is a real answer.
The Federal Reserve’s 2024 Report on Startup Firms notes that “Compared to older firms, startups are more reliant on their owners’ personal funds to address financial challenges.” That is about how firms respond when money gets tight, not about how they were first funded. It is a reason to leave yourself room, since the money that fills a surprise is often your own.
Costs people forget
- Your own living costs while the business pays you nothing.
- Insurance, and deposits on a space, a utility, or a vehicle.
- The first inventory or materials, before a single sale.
- Tools and software you assumed you already had.
- A second month. The first month is easy to price. The second arrives before the money does.
Three sketches
These are lists of line items, not totals. Your amounts will differ.
A consulting practice from a laptop. One-time: a decent laptop if yours is old, a simple website, business cards. Monthly: software, a phone plan, insurance, a coworking day now and then. The large cost is usually your own time without income while you find clients.
A mobile bike repair service with a van. One-time: the van or its conversion, tools, a work stand, parts stock, lettering. Monthly: fuel, van insurance, parts restocking, a booking tool. The van is the big one-time item and also adds monthly costs of its own.
A small shop with a lease. One-time: a deposit, fixtures, shelving, the first inventory, a point-of-sale setup. Monthly: rent, utilities, insurance, restocking, and perhaps help on busy days. Rent arrives every month whether anyone walks in or not, so working capital matters most here.
Build your own list
Use the startup cost calculator to list your purchases before you open, the cash you want on hand while sales get going, and what you can put toward starting. It shows the gap. A blank stays blank, so a cost you have not priced yet stays visible instead of vanishing. Then take the monthly side to the break-even calculator. It shows how many sales your monthly costs require, which tells you whether the shape of the business can work.
Fees and filings vary by state and by business type. Surmado Learn covers the filings, fees, and tax IDs by state, starting at its start a business hub. Add what you find there to your list. For free, local help with the numbers, the SBA lists local assistance.
Where to go next
Put your costs next to the rest of the picture in your plan. If you have not written one before, how to write a business plan walks through it. If you want to test the idea cheaply before spending, read how to get your first customer.