Basics of Business Startup Cost

Business Startup Cost

Of course, the idea of building something of your own to make an impact on lives is exciting. Founders tend to go with the flow and drive according to their instincts. But the fear of failing and running out of cash always crawls under the rug. And, why not? Running out of cash is the significant reason for a startup’s failure.

As they say, Prevention is better than cure. Similarly, learning and getting the gist of startup costs and business budgets right from the beginning helps you optimize your budget better and towards growth.

Let’s dive into the concept a bit deeper to understand what exactly is Business Startup Cost. So that you can optimize your business budget accordingly.


What are Business Startup Costs?

Same as the name depicts, Business Startup Costs include the costs incurred during the launch of a new venture. Be it rental charges or incorporation fees, or insurance costs, or furniture expenses, everything falls under startup costs.

Some of these costs may follow you till the eternity of your business and some would be one shot. Thus, optimization of the business budget according to these startup costs is crucial.


Exploring basic Business Startup Costs

Indeed, the budget and startup costs differ from a small business to a bigger one. Not all costs may apply to your business but in general, these costs prevail.


Business Development Charges

Initially, on the first step, you’ve to pay a heft amount in all the paperwork, filing procedures to help the state recognize your business. These charges vary according to your entity. Thus, gaining complete information before stepping foot is what you must follow. A comprehensive understanding of the process and your niche will tell you the exact charges of your business development.


Here comes the most vital component of any business, insurance. The business realm is no less than a fire. Thus, if you’re stepping in it, make sure to back up with extinguishers, which means get insured at the very first step to avoid any negative consequences.

To guarantee safety, choose the right insurances as per your business and stay ahead with protection.



Not for all, but the people with startup businesses in liquor, health sector, zoning, reselling, land use, etc., must have a license to work smoothly. It will add up in your startup cost regularly because the license should be renewed annually.


Human Capital and Payroll Expenses

Just after the idea and executable action plan, you will need the workforce to help you push your startup business towards the destination. Thus, the salaries, hourly wages, health insurance, life insurance, PF, and other perks provided to a full-time employee should be considered in the business budget.

Read Also: Big Startup Ideas To Start Small Businesses

Moreover, you will be needing a payroll service provider to maintain and keep things in line. Thus, consider the cost of payroll services too, and don’t ever forget the payroll taxes along with.

Now, you can handle some things on your own at the beginning but with the time being and to scale up, the workforce is a must requirement.


Professional Services

Believe it or not, but you’re not a superhuman to handle every single task on your own. You will need professionals and experts of various domains to ensure the hassle-free functioning of your startup. Professional services include marketing on social media, legal services, accountant, etc. You may tend to ignore them but this professional can act like your saviors in long run.


Other Costs that incur

Again, I’m repeating that the charges will differ according to the industry and size. But some common costs that might be included in almost all startups are as follows:

  • Point of Scale (POS) systems
  • Internet and WiFi
  • Storage
  • Furniture
  • Equipment and setup
  • Software
  • Inventory
  • Stationary and office supplies
  • Marketing
  • Office space
  • Computer systems and other electronics
  • Electrical, water, and other bills
  • Office space
  • Marketing
  • Cleaning supplies

You may not need them directly on the first step of the ladder. But as you will move forward, these services will definitely knock on your door.


Bottom Line

As they say, Better late than never, keep these things in mind if your will to develop your dream is robust. Your new business startup will flourish to be a full-fledged brand if your business budget would be strong enough to handle the costs beforehand.

Read Also: 5 Important Management Lessons From Mahabharata

Last but not least, if you’re facing any difficulty fundraising, business plan of a startup, or something else, team LFS is always here for you. We bridge the gap between budding startup founders and investors, advising startups to help them boost their business manifolds.

About the Author

Devansh Lakhani

Devansh Lakhani, the director of Lakhani Financial Services, clasps a rich experience of 5+ years in the finance industry. A Chartered Accountant by qualification, Devansh has expertly handled funds for HNI clients, been part of an IPO on SME platform to tune Rs. 10+ crores, conducted the right issues to tune Rs. 10+ crores, and accomplished block deals of Rs. 35+ crores in the past. Now, with a zeal to boost startups, Devansh's heart and soul lies in Lakhani Financial Services. To date, LFS has helped 85+ startups with advisory, business plan & pitch deck preparation. Devansh is one of the most respected people when we talk about startup funding, advising, and mentoring. With the support of Devansh, 6 startups raise funds to the tune of 4+ crores. He aspires and is on the mission to boost and scale 1000+ startups in the next 5 years.

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