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Business Startup Costs: It’s in the Details

There's more to a business than furnishings and office space. Especially in the early stages, startup costs require careful planning and meticulous accounting. Many new businesses neglect this process , relying instead on a flood of customers to keep the operation afloat, usually with abysmal results.

Key Takeaways

• Startup costs are the expenses incurred during the process of creating a new business. 
• Pre-opening startup costs include a business plan, research expenses, borrowing costs, and expenses for technology.
• Post-opening startup costs include advertising, promotion, and employee expenses.
• Different types of business structures—like sole proprietorships, partnerships, and corporations—have different startup costs, so be aware of the different costs associated with your new business.

Startup costs are the expenses incurred during the process of creating a new business. All businesses are different, so they require different types of startup costs. Online businesses have different needs than brick-and-mortars ; coffee shops have different requirements than bookstores. However, a few expenses are common to most business types.

Understanding Common Business Startup Costs

The business plan.

Essential to the startup effort is creating a business plan —a detailed map of the new business. A business plan forces consideration of the different startup costs. Underestimating expenses falsely increases expected net profit, a situation that does not bode well for any small business owner.

Research Expenses

Careful research of the industry and consumer makeup must be conducted before starting a business. Some business owners choose to hire market research firms to aid them in the assessment process.

For business owners who choose to follow this route, the expense of hiring these experts must be included in the business plan.

Borrowing Costs

Starting up any kind of business requires an infusion of capital. There are two ways to acquire capital for a business: equity financing and debt financing. Usually, equity financing entails the issuance of stock, but this does not apply to most small businesses, which are proprietorships.

For small business owners, the most likely source of financing is debt in the form of a small business loan . Business owners can often get loans from banks, savings institutions, and the U.S. Small Business Administration (SBA). Like any other loan, SBA business loans are accompanied by interest payments. These payments must be planned for when starting a business, as the cost of default is very high.

Insurance, License, and Permit Fees

Many businesses are expected to submit to health inspections and authorizations to obtain certain business licenses and permits. Some businesses might require basic licenses while others need industry-specific permits.

Carrying insurance to cover your employees, customers, business assets, and yourself can help protect your personal assets from any liabilities  that may arise. 

Technological Expenses

Technological expenses include the cost of a website, information systems, and software, including accounting and point of sale (POS) software , for a business. Some small business owners choose to outsource these functions to other companies to save on payroll and benefits.

Equipment and Supplies

Every business requires some form of equipment and basic supplies. Before adding equipment expenses to the list of startup costs, a decision has to be made to lease or buy.

The state of your finances will play a major part in this decision. Even if you have enough money to buy equipment, unavoidable expenses may make leasing, with the intention to buy at a later date, a viable option. However, it is important to remember that, regardless of the cash position , a lease may not always be best, depending upon the type of equipment and terms of the lease.

Advertising and Promotion

A new company or startup business is unlikely to succeed without promoting itself. However, promoting a business entails much more than placing ads in a local newspaper.

It also includes marketing —everything a company does to attract clients to the business. Marketing has become such a science that any advantage is beneficial, so external dedicated marketing companies are most often hired.

Employee Expenses

Businesses planning to hire employees must plan for wages, salaries, and benefits, also known as the cost of labor .

Failure to compensate employees adequately can end in low morale, mutiny, and bad publicity, all of which can be disastrous to a company.

Additional Startup Cost Considerations

Have some extra money set aside for any overlooked or unexpected expenses. Most companies fail because they lack the cash to deal with unexpected problems during the business season.

It is important to note that the startup costs for a sole proprietorship differ from the startup costs for a partnership or corporation. Some additional costs a partnership might incur include the legal cost of drafting a partnership agreement and state registration fees.

Other costs that may apply more to a corporation include fees for filing articles of incorporation, bylaws, and terms of original stock certificates.

Launching a new business can be invigorating. However, getting caught up in the excitement and neglecting the details can lead to failure. Above anything else, observe and consult with others who have traveled this road before—you never know where you might learn the business advice that helps your particular business succeed.

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• How to Do Market Research, Types, and Example 2 of 25
• Marketing Strategy: What It Is, How It Works, and How to Create One 3 of 25
• Marketing in Business: Strategies and Types Explained 4 of 25
• What Is a Marketing Plan? Types and How to Write One 5 of 25
• Business Development: Definition, Strategies, Steps & Skills 6 of 25
• Business Plan: What It Is, What's Included, and How to Write One 7 of 25
• Small Business Development Center (SBDC): Meaning, Types, Impact 8 of 25
• How to Write a Business Plan for a Loan 9 of 25
• Business Startup Costs: It’s in the Details 10 of 25
• Startup Capital Definition, Types, and Risks 11 of 25
• Bootstrapping Definition, Strategies, and Pros/Cons 12 of 25
• Crowdfunding: What It Is, How It Works, and Popular Websites 13 of 25
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• Equity Financing: What It Is, How It Works, Pros and Cons 16 of 25
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Small Business Startup Costs Explained 

3 min. read

Updated March 4, 2024

What will it cost to start your business ? 

While every business is unique, there’s a common approach to helping you figure out what it’s going to take to get your business off the ground and sustain it as sales ramp up.

And, knowing the startup costs for your new business is critical before you launch. Underestimating the funds required could leave you without enough cash in the bank and heading towards failure before you even get started.

Read this guide and learn to calculate, manage, and minimize your startup costs. 

• What are startup costs?

Startup costs are what a business spends to get up and running before generating revenue. 

Starting costs vary based on business type but often include expenses like lease payments, permits, and market research. They can also include asset purchases such as vehicles, real estate, and equipment. Crucially, starting costs also include the money that you need to have in the bank to cover expenses as your business launches until your sales have grown enough to cover those expenses.

• Startup cost examples

Starting costs typically include expenses that occur before you start selling and major purchases, otherwise know as assets.

Startup expenses

• Permits and licenses
• Incorporation fees
• Logo design
• Website design
• Brochure and business card printing
• Down payment on rental property

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• Cash to cover operations until sales can cover expenses
• Improvements to your chosen location
• Vehicles used for business operations
• Intangible assets like trademarks, copyrights, and patents.
• Why calculate startup costs?

Knowing your initial costs and expenses improves your chances of launching successfully . It helps you:

Avoid unnecessary risks:

You can avoid unexpected financial pitfalls and make informed decisions by understanding potential expenses.

Start your financial plan :

It helps you budget and determine if you have adequate funds to launch and operate until you’re profitable.

Convince investors :

A detailed breakdown of startup costs can make your business more appealing to investors, as you’ll demonstrate thorough planning and financial acumen.

Improve decisions: 

With a clear view of costs, you can make decisions about pricing , scaling, and other critical areas more confidently.

• What are your startup costs?

Starting costs vary from business to business. So, how do you know your costs and, more importantly, how much money you need to cover them? 

Check out the following resources to answer those questions.

How to calculate your startup costs

Accurately estimate startup costs by accounting for expenses, assets, and cash.

3 Steps to Figure Out How Much Money You Need to Start a Business

How much cash will it take to start your business? Your total cash must go beyond startup costs and ensure you’re prepared to cover emergencies and initial growth.

How Much Should You Personally Cover for Startup Costs?

Before covering any business expenses, consider the impact on your personal finances. What’s the right amount? How will you pay yourself back? And are the rewards worth the risk?

• Tips for managing startup costs

Follow these steps to minimize unnecessary expenses and prioritize the right things.

How to reduce your startup costs

Keep your startup expenses in check and save money through proper planning, tracking, and exploring possible tax deductions.

Hidden startup costs you may overlook

It’s challenging to account for everything. Don’t let overlooked fees and expenses immediately throw off your budget.

What you won’t regret spending money on as a business owner

There is such a thing as being too frugal. But where should you invest more money? While it depends on your business, you can start with these recommendations from a seasoned entrepreneur.

Get the rest of your business finances in order

Knowing what it costs to start your business will make it far easier to get your finances in order.

Check out the rest of our startup financial resources to better understand your path to profitability.

• Create your financial plan
• Set up accounting and payroll
• Prepare for funding

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Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.

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• Get your business finances in order

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Planning, Startups, Stories

Tim berry on business planning, starting and growing your business, and having a life in the meantime., business plan financials: starting costs.

It’s really important to have an idea of what you need before you start. Continuing with my series on standard business plan financials , startups need to project starting costs. Starting costs set up a starting balance, which is necessary to plan cash flow. And the starting costs are critical to determining whether a startup can bootstrap or needs outside funding. For existing companies that already have financial results, projections start with the expected ending balance of the previous period. But for startups, it’s about starting costs.

Starting costs are essentially the sum of two kinds of spending. You can estimate them both in two simple lists:

• Startup expenses : These are expenses that happen before the beginning of the plan, before the first month of operations. For example, many new companies incur expenses for legal work, logo design, brochures, site selection and improvements, and signage. If there is a business location, then normally the startup pays rent for a month or more before opening. And if employees start receiving compensation before the opening, then those disbursements are also startup expenses.
• Startup assets : Typical startup assets are cash (the money in the bank when the company starts), business or plant equipment, office furniture, vehicles, and starting inventory for stores or manufacturers.

A Simple Starting Costs Example

I’ve used a bicycle store as an example in several posts that are part of this series of standard business plan financials. Here’s a visual in spreadsheet form, of sample starting costs for a hypothetical bicycle store.

Notice that the lists for estimating starting costs, on the left in the illustration above, are matched to another list of starting funding, on the right side of the illustration. Books have to balance, so the initial estimates need to include not just the money you spend, but also where it comes from. In the case above, Garrett had to find $124,500, and you can see that he financed it with Accounts Payable, debt, and investment in various categories.

Another Simple Starting Costs Example

Here is another simple example: the starting costs worksheet that Magda developed for the restaurant I used for a sample sales forecast . Magda’s list includes rent and payroll, the same as in her monthly spending, but here they are included in starting costs because these expenses happen before the launch.

I included rent and payroll because they point out the importance in timing. The difference between these as startup expenses and running expenses is timing, and nothing else. Magda could have chosen to plan startup expenses as a running worksheet on expenses, starting a few months before launch, as in the illustration below. The launch in this case is early January, so the expenses for October through December are startup expenses. I prefer the separate lists, because I like the way the two lists create an estimate of starting costs. But that’s an option.

The LivePlan Alternative

If you’re a LivePlan user, the LivePlan interface assumes this method and has a more intuitive interface than the spreadsheet version I’m showing in this post. For LivePlan, you start your plan when you start spending, regardless of launch date. So the spending you do for rent and salaries and such, before launch, is part of the flow, as above. Also, LivePlan has its own guided way of helping you figure out what assets you need, how much they cost, and how you are going to finance starting costs, to set up your balance. And the LivePlan cash flow estimator will help you decide how much cash you need, so you don’t have to follow the spreadsheet method here (below).

How to Estimate Your Starting Costs

Obviously the goal with starting costs isn’t just to track them, but to estimate them ahead of time so you have a better idea, before you start a new business, of what the financial costs might be. Breaking the items down into a practical list makes the educated guess a lot easier. Ideally, you know the business you want to start, you are already familiar with the industry, so you can do a useful estimate for most of the startup costs from your own experience. If you don’t have enough firsthand knowledge, then you should be talking to people who do. For others, such as insurance, legal costs, or graphic design for logos, call some providers or brokers, and talk to partners; educate those guesses.

Starting Cash is the Hardest and Most Important

How much cash do you need in the bank, as you launch? That’s usually the toughest starting cost question. It’s also prone to misinformation, such as those alleged rules of thumb you can find everywhere, saying you need to have a year’s worth of expenses, or six months’ worth, before you start. It’s not that simple. For most businesses, the startup cash isn’t a matter of what’s ideal, or what some expert says is the rule of thumb – it’s how much money you have, can get, and are willing to risk.

The best way is to do a Projected Cash Flow while leaving the supposed starting cash balance at zero, which shows how much (at least in theory, according to assumptions) the startup really needs in cash to support the business as it grows, before it reaches a monthly cash flow break-even point. Magda did that to determine the $12,000 needed as starting cash for her restaurant. Note how, in the illustration here, the lowest point in cash is slightly less than $12,000:

That low point comes, theoretically, in the third month of the business, March. The low point is $11,609. Obviously that’s just an educated guess, but it’s based on assumptions for sales forecast, expense budget, and important cash flow factors including sales on account and purchasing inventory. So it’s better than a stab in the dark, or some rule of thumb. Just as an example, the total spending with the estimates shown here, the theoretical “year’s worth of spending,” is $182,000 (which you don’t see on the illustration, by the way, but take my word for it). The total for the first six months is $93,000. If Magda sticks to those old formulas, she can’t start the business. She is able to raise enough money, between loans and her savings, to put $12,000 into the starting cash balance. So that’s what she does. Then she launches and continues to have her monthly reviews, and watch the performance of all key indicators very carefully.

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How to Calculate Business Startup Costs

Starting a business from scratch takes a lot out of you, even before you begin operating—whether it’s about selecting a revenue model, securing startup funding, or estimating startup costs.

I already knew it was challenging for entrepreneurs to calculate the startup costs accurately.

However, when I turned up to my computer, researching this article, I discovered so many challenges new business owners face while estimating startup costs that I had overlooked or didn’t pay much attention to earlier.

Thousands of startups close down every single year. 38% of them fail solely because they underestimated their startup costs and ran out of cash. You can’t ignore something like that, can you?

That said, I’m ready to pour my research into the article to help you calculate your business startup costs .

So, you’re ready to begin? Let’s dive right in.

Key Takeaways

• Startup costs are the expenses a startup must bear in the process of starting a new business, while operational costs are the expenses that are incurred during daily operations.
• Different types of business structures, such as sole proprietorships, partnerships, and corporations, have different costs.
• Business insurance, formation fees, licensing and permits, and marketing are some of the most common business startup costs.
• A modern financial forecasting tool is the most efficient method for calculating startup costs.

How much does it cost to start a business?

Startup costs for a small business depend on various factors like business model, location, industry, and scale of operations. Although it’s tough to estimate precisely, Guidant Financial’s 2023 survey reported that the average cost of starting a small business falls between $50K and $1 million .

You must consider the industry, business category, working capital requirements, and other common expenses associated with the business for the accurate estimation of startup costs.

Let’s kickstart this guide by discussing the common startup expenses to consider while starting a new venture.

Common Business Startup Costs to Consider

It is a typical list of expected business startup costs with rough cost estimates you must plan for while starting a new business. Your actual startup costs will entirely depend on your business category and the industry you serve.

Following are some of the most common startup costs to consider:

1. Equipment and tools

It’s no surprise we’re starting the list with equipment and tools. There’s no way a business can operate without the necessary equipment. The equipment costs may range from $10,000 to $120,000 . However, these costs will entirely depend on the business type and equipment requirements.

For instance, starting a food truck would require financing a food truck and expensive kitchen equipment, while starting a small daycare would only require purchasing a few play area equipment.

Here are the average equipment costs for some of the popular business types:

• Restaurant and food trucks: $24,000 to $120,000+
• Small Bakery: $6,000 to $8,000
• Clothing line: $2,000 to $15,000+
• Construction: $10,000 to $50,000
• Law firm: $5,000 to $25,000+
• Barbershop: $1,000 to $2,000

2. Incorporation fees

The first thing you should do is choose a business entity when you plan to form a new business. The most common and preferred business structure types include sole proprietorship, partnership, corporation, and LLC.

The business incorporation or filing fees can range from $50 to $725 in the United States depending on your industry, the state you operate in, and the business structure you choose.

However, the average incorporation fee is $300 in the majority of the states in the US. You may contact your secretary of state’s website to learn more about the filing fees or process for the articles of incorporation or articles of organization.

3. Business licensing and permits

Operating any small business requires specific licenses and permits depending on the industry compliance and regulations. For instance, a trucking company requires a USDOT number, heavy vehicle use tax, and others, while a restaurant may need licenses like food safety and liquor licenses to operate.

Similar to different filing fees for other business structures, the business licensing and permit fees vary depending on the business industry and regulatory compliance. You can expect to spend between $1,000 to $5,000 for your licensing and permitting requirements.

4. Office or retail space

If you’re starting a small business that can be operated from home like a home bakery or an online clothing store, you may not have to worry about office space costs.

But if it’s not the case, paying for an office or a retail space would make up a sizable portion of your fixed expenses, no matter whether you rent or buy the place.

Based on our research, you should spend around $100 to $1200 per employee monthly on your workspace.

However, the actual office space expense will entirely depend on your location and the type of space you’re using.

5. Legal and professional fees

Professional and legal fees may sound like an additional expense while starting up with limited resources, but it’s essential to ensure compliance with regulations and maintain accurate financial records.

You may choose legal assistance for business licensing, EIN registration, and legal paperwork, a business consultant for market research and strategic planning, and an accountant for bookkeeping and tax planning.

You can hire these professional consultants on an hourly basis; their services typically cost around $40 to $150 per hour.  You should spend around $2,000 to $10,000 per year on professional and legal fees.

6. Inventory

Retail, wholesale, distribution, and manufacturing—if your small business falls under any of the mentioned categories, you need an inventory to operate your business. Finding the ideal inventory size to carry can be challenging when entering a new marketplace.

You want to attract more and more customers and make sales in your early days. However, you can’t also risk having too much inventory since it can increase spoilage.

Consider allocating 15% to 25% of your budget to inventory, depending on your industry. You will eventually learn more about inventory management once your business starts operating and making sales.

7. Marketing and advertising

Although it’s an optional expense, marketing is something worth investing in. Your marketing expenses may include physical materials like sign boards, banners, hoarding, paid social media advertising and search ads, or money paid to marketing agencies or consultants.

It is suggested to keep your advertising and promotion costs under 10% of your budget. If you’re working on a really tight budget, there’s no need to spend big bucks on marketing or hire fancy consultants or agencies.

With social media being a free marketing platform, over 47% of small business owners run their marketing efforts themselves, and you can do it, too.

8. Website development

A business website is like an online office where customers can contact you, learn more about your offerings, and seek assistance.

When building a website, make sure it looks professional, is easy to navigate, and displays the relevant information about your product and service offerings, as well as the contact information.

You can either develop a business website using website builders like Wix and Squarespace or hire a developer to do it for you.

Creating a website can range between $1,000 to $10,000 when you hire a developer, whereas you can do it on your own with website builders by spending around 40 dollars a month.

9. Business Insurance

Like you have a house, car, and health insurance, you need business insurance to ensure your business remains intact in troublesome and inevitable times, be it a natural disaster or a customer filing a lawsuit against your business.

The level of security and type of business insurance your business will require depends entirely on your business, industry, and the number of employees you have. For instance, a big-scale manufacturing company with over a thousand employees would require much stronger insurance compared to a home bakery.

Some of the must-have business insurance types include:

• General liability insurance—for all online, offline, and home-based businesses.
• Worker’s compensation insurance—for businesses with 1 or more employees.
• Professional liability insurance—for businesses offering consulting services.

You must expect to spend approximately $500 to $1500 annually on business insurance.

10. Payroll

Payroll is undoubtedly one of the major business expenses most businesses incur. However, there’s no denying how crucial it is to hire quality employees to make your business thrive.

Of course, payroll expenses are employee salaries, but there’s more to it. Your payroll expenses may also include:

• Incentive or bonus
• Commissions
• Paid time off
• Overtime pay
• Travel allowance
• Other benefits

Most businesses spend around 20% to 50% of their monthly budget on payroll. It can be more or less for your business depending on your business and the number of employees you have.

11. Office furniture and supplies

Those planning to have a traditional nine-to-five corporate workplace, be ready to spend some severe bucks on office furniture and office supplies.

When you operate from a corporate workspace, you need a desk, chair, telephone extension, computer, computer programs like accounting software, and, of course, a coffee machine or two.

The cost of furniture and supplies depends solely on your employee strength and the size of the office. However, it’s recommended to keep your furniture and supply costs to 10% of your total startup costs.

12. Utilities

No matter whether you plan to rent or purchase a workspace, you are bound to pay utility bills that include electricity, gas, water, internet, and phone bills for your office.

Unlike other fixed costs, it’s hard to estimate utility expenses, but the average cost of utilities for commercial buildings is $2.10 per square foot , according to a report by Iota Communications .

Besides the electricity, internet, and phone bills, the utility expenses may also incur the HVAC unit installation costs. This heating and cooling system will add a few additional thousand dollars to your startup expenses.

13. Business taxes

How much you’d spend on business taxes will depend on your business entity, tax-deductible expenses, and revenue. Since it’s hard to predict your revenue, estimating the exact amount to allocate for tax preparation may feel a bit challenging.

Under US federal law, corporations pay a flat 21% corporate income tax . If you’re a pass-through entity(a legal entity that passes all its income on to the owners), the business income or losses will pass through to your personal taxes.

However, you, as a pass-through entity, can claim a 20% deduction on income before paying taxes.

 14. Other expenses

Since you’ve reached this section, you must already have a clear understanding of all the expected startup costs, whether they are one-time or recurring expenses.

Here, we will discuss the other costs most small business owners tend to miss or overlook while estimating the startup costs— research expenses and borrowing costs .

Capital is required for starting a business, and equity financing and debt financing are considered to be the most preferred ways to acquire the initial working capital.

Equity financing, however, does not apply to most small businesses since it requires stock issuance. So, securing a small business loan seems to be the most likely source of debt financing for small business owners.

Research expenses, on the other hand, are the expenses incurred even before you started operating, spent on conducting a careful industry analysis and market research.

When calculating your startup costs, make sure to include these two as well.

Since we have already discussed common business expenses, let’s move on discussing calculating the startup costs.

How to Calculate the Costs of Starting a Business

There are various ways to calculate the cost of starting a business. Still, drafting a business plan remains the best way to estimate startup costs.

The financial forecasting section of your plan provides three to five-year projections of revenue, profit, and expense.

The other resources for estimating startup costs include using Upmetrics’ startup costs worksheet or calculator . These resources will help you estimate the initial investment required and determine how much capital or financing you’ll need.

Know that many of the common business expenses we discussed earlier are recurring, with some of them being one-time expenses.

Be sure to categorize them and calculate the recurring expenses on a monthly, quarterly, and annual basis. In contrast, consider expenses like incorporation fees and equipment financing one-time costs.

Sounds like a lot to digest? Get a business planning software like Upmetrics and calculate startup costs in minutes with AI-powered financial forecasting .

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Estimate costs, forecast financials, and prepare a business plan all in one place

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Calculating Startup Costs for Your Small Business

Does your business fall under one of these categories? Excellent. We have startup cost guides for all the business categories listed below. Get a cost estimate for starting the business you plan to launch.

How to Reduce Your Business Startup Costs

Starting a business means being prepared to bear some non-negotiable expenses; there’s no other way around. However, sound research and thoughtful planning can help you save on high-ticket purchases—ultimately reducing your startup costs.

For instance, hiring professional business plan writers can be expensive for a business owner on a tight budget to create a business plan, so they can opt for a business planning software like Upmetrics to draft a business plan at a much lesser cost.

It was just an example, here are a few tips to help you reduce your business startup costs.

1. Create a business plan

It doesn’t make sense. Isn’t it another business expense? How will it reduce costs? Some of you must be having this line of questioning in your mind, but let us clear it up for you.

Brainstorming and listing all the important business costs, and estimating your total startup costs is challenging. Missing out on some critical expenses tends to happen. However, creating a comprehensive business plan makes things easier.

An AI-powered tool like Upmetrics makes sure you don’t miss out on any critical information and helps you properly estimate your startup costs.

Remember, accurate estimation of startup costs is your first step to reducing them.

2. Start small

You don’t need everything or a perfect business setup when you are not making any sales, forget about the business profits. Start small with limited resources and grow your business as it grows financially.

For instance, instead of having a big fancy office for your startup, start with a remote team or a co-working space until you raise capital or gather the necessary resources.

One way of doing that would be listing all the major high-ticket expenses and researching competitive alternatives for them.

3. Lease instead of purchasing

Of course, having your own office or a retail space feels good, but not at the cost of more than 70% of your budget for starting a business. Prefer leasing the place instead of purchasing.

It will leave you with enough working capital or cash to efficiently manage your business operations and handle the other non-negotiable costs.

Furthermore, there’s no guarantee your storefront will find success at the very first location; you may have to relocate if things don’t work out. The further process will be more straightforward with leasing, whereas the same won’t be the case when you own the place.

4. Buy used equipment, tools, or furniture

Since you’re looking for ways to reduce costs and save money, there’s no way for you to have brand-new business equipment, tools, and furniture. You can look for used equipment, tools, and furniture on online selling sites like eBay and Etsy.

Be sure to thoroughly check the equipment before purchasing to avoid any future restoration or repair costs.

5. Funding and business credit card

Now that you have a long list of capital expenditures, you will need financing or funding to manage all these costs. You can’t simply do it all on your own, can you?

It won’t reduce the startup costs but will help you get resources to manage them. Your funding options include debt and equity financing. You may apply for a business loan, reach out to angel investors, or apply for business grants to secure the initial investment for your business.

With limited debt financing options, it could be tough to get through. Applying for a business credit card can be a more accessible alternative to a business loan. You can easily qualify for it while also gaining a higher credit limit than your personal credit card.

Make sure you’re not totally relying on it or taking out more than you can repay. This can negatively impact your credit score, making it harder for you to secure business loans in the future.

And, the final section leads us to our conclusion!

And there you have it. We hope now you have a better understanding of startup cost calculation. What’s next? It’s time to estimate the actual costs of starting a business, be it a bakery, restaurant, or hot shot trucking, and start budgeting.

Get your hands on the modern and AI-powered business planning solution, Upmetrics—and create precise startup cost projections in minutes, just like that.

Frequently Asked Questions

What is the average cost to start a small business.

It is a question with a broad scope for the answer since you can start a business with an initial investment of $100, $1,000, and up to a million dollars or even more. However, the startup and first-year operational expenses fall somewhere between $30,000 to $40,000.

How do you calculate startup costs?

The most easy-to-use method to calculate startup costs is to create a business plan. It’s easier than ever to calculate your startup costs using a tool like Upmetrics. 

Simply head to the financial forecasting feature, get AI suggestions to list your startup and organizational costs, add remaining costs, and let it make the automated calculations for you.

What are business startup costs?

Business startup costs are expenses incurred when starting a new business. These can be your marketing costs, payroll expenses, or any other costs involved. These can either be recurring or one-time costs. 

For instance, your advertising costs are recurring, whereas incorporation fees are a one-time expense. Although there can be some common startup expenses, the value or costs for them may not be the same for two different businesses.

What is the difference between startup costs and operational expenses?

Startup costs are the expenses small businesses incur when starting a new business, whereas operational expenses are those incurred during normal day-to-day business operations. 

For instance, equipment financing can be considered a startup cost, whereas inventory or marketing costs can be your operational expenses.

What are the examples of start-up costs?

The following can be considered as a few examples of startup costs:

• Equipment costs
• Inventory expenses
• Business licenses and permits
• Marketing and advertising expenses
• Payroll expenses
• And others.

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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How to Write a Business Plan, Step by Step

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What is a business plan?

1. write an executive summary, 2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. summarize how your company operates, 10. add any additional information to an appendix, business plan tips and resources.

A business plan outlines your business’s financial goals and explains how you’ll achieve them over the next three to five years. Here’s a step-by-step guide to writing a business plan that will offer a strong, detailed road map for your business.

ZenBusiness

A business plan is a document that explains what your business does, how it makes money and who its customers are. Internally, writing a business plan should help you clarify your vision and organize your operations. Externally, you can share it with potential lenders and investors to show them you’re on the right track.

Business plans are living documents; it’s OK for them to change over time. Startups may update their business plans often as they figure out who their customers are and what products and services fit them best. Mature companies might only revisit their business plan every few years. Regardless of your business’s age, brush up this document before you apply for a business loan .

» Need help writing? Learn about the best business plan software .

This is your elevator pitch. It should include a mission statement, a brief description of the products or services your business offers and a broad summary of your financial growth plans.

Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.

» MORE: How to write an executive summary in 6 steps

Next up is your company description. This should contain basic information like:

Your business’s registered name.

Address of your business location .

Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.

Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.

Lastly, write a little about the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.

» MORE: How to write a company overview for a business plan

The third part of a business plan is an objective statement. This section spells out what you’d like to accomplish, both in the near term and over the coming years.

If you’re looking for a business loan or outside investment, you can use this section to explain how the financing will help your business grow and how you plan to achieve those growth targets. The key is to provide a clear explanation of the opportunity your business presents to the lender.

For example, if your business is launching a second product line, you might explain how the loan will help your company launch that new product and how much you think sales will increase over the next three years as a result.

» MORE: How to write a successful business plan for a loan

In this section, go into detail about the products or services you offer or plan to offer.

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

You can also discuss current or pending trademarks and patents associated with your product or service.

Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.

Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.

Include details about your sales and distribution strategies, including the costs involved in selling each product .

» MORE: R e a d our complete guide to small business marketing

If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.

Accounting software may be able to generate these reports for you. It may also help you calculate metrics such as:

Net profit margin: the percentage of revenue you keep as net income.

Current ratio: the measurement of your liquidity and ability to repay debts.

Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.

This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.

This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.

Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.

Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

Before the end of your business plan, summarize how your business is structured and outline each team’s responsibilities. This will help your readers understand who performs each of the functions you’ve described above — making and selling your products or services — and how much each of those functions cost.

If any of your employees have exceptional skills, you may want to include their resumes to help explain the competitive advantage they give you.

Finally, attach any supporting information or additional materials that you couldn’t fit in elsewhere. That might include:

Licenses and permits.

Equipment leases.

Bank statements.

Details of your personal and business credit history, if you’re seeking financing.

If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Here are some tips to write a detailed, convincing business plan:

Avoid over-optimism: If you’re applying for a business bank loan or professional investment, someone will be reading your business plan closely. Providing unreasonable sales estimates can hurt your chances of approval.

Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.

Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.

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How to calculate business startup costs: an essential guide.

You might think that starting a business is simple, financially. Unfortunately, not all business startup costs are clear. There are some that you may not consider until you’ve begun the process. Some business expenses might occur that you’ve never even heard of. Business owners will tell you that startup expenses are more than just office space and furnishings. If you’re contemplating starting a business , learn how to calculate your costs here!

Here’s What We’ll Cover:

What are Business Startup Costs?

Common business startup costs, costs that occur after business has started, how much does it cost to start a business in the uk, key takeaways.

Any good business plan will go through the task of calculating business startup costs. These are the organizational costs that occur during the creation of a new business. Some are one-time expenses, while others are ongoing expenses. Regardless, understanding and budgeting for all of the possible costs is crucial to success. Startup costs require planning and accounting, and if a business neglects this then they are less likely to thrive.

There are some common business startup costs that should always be considered when doing calculations. They’re all listed below and are all necessary to start a business.

A Business Plan

Believe it or not, a business plan should be part of your startup costs. Business plans take time to create, and often require professional services to polish. They’re a road map and a financial plan to present to possible investors. Without this part of your financial plan, you’ll be less likely to secure funding. Startup funding is crucial to getting a business off the ground.

Research is a necessary part of any startup. The company needs to be able to prove that it’s viable in the market. If research is neglected, a company may enter the market offering products that are unnecessary.

Borrowing Costs

Borrowing costs take into account the business loans received for a startup. This includes interest on loan payments, as well as any fees applied to debts over time. Borrowing costs make up a large portion of startup costs until they are paid off.

Business Insurance and Business License Fees

Businesses are required to have insurance, and as such they will have insurance payments to make. There may also be a requirement for commercial property insurance when selecting where your business will live. Business licensing and permitting are also necessary costs to factor in.

Tech Expenses

In today’s world, businesses need technology to thrive. This includes digital marketing costs and software needs. Many businesses can’t function without business accounting software . They also need content marketing and advertisements to create an online presence. Without it, they may be doomed.

Office Equipment and Basic Supplies

If your business is going to exist in a physical space, office equipment and basic supplies are necessary. You’ll need office furniture, fixtures, and office supplies to get started. Without them, daily tasks won’t be completed.

Everything mentioned prior to this is related to setting a business up. However, they aren’t the only business startup costs. Startup also includes post-opening costs, such as the ones below:

• Employee Costs: Hiring employees will require additional funding. You’ll need to take into account employee salaries, employee benefits, and employee training. All of these will cost money for your business.
• Promotion: While online advertising was mentioned prior, it’s worth mentioning again. Promotion is key in this world. Without paying for promotion and advertising, a business likely won’t get far.

Most businesses have reported that it takes about £5,000 to launch. However, that doesn’t take into account all of the costs spent during the startup period. As a general rule of thumb, the startup period is about a year before everything is off the ground. Small businesses have reported that additional startup costs amount to about £23,000 in the first year. Those costs break down into the following categories:

• Legal Costs: £6,500
• Accountancy: £4,000
• Human Resources: £4,500
• Company Formation: £8,000

Most people state that they underestimated their startup costs by about £2,000. As such, building a cushion to provide that is recommended.

Starting a business isn’t cheap. In fact, it takes a lot of work and money before you can start earning money. As such, calculating your startup costs before you dive in is suggested. Understanding the needs of your business and their associated costs is a recipe for success. If you want more small business articles like this, visit our resource hub ! We love supporting small businesses.

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Business Startup Costs in 2022: What Small Business Owners Can Expect

Starting a new business is exciting, but it also may come with intimidating startup costs. Before you become a business owner, you’ll want to sit down and estimate the total price tag of the venture. In this article, we walk you through the process of calculating each business startup cost so you can launch your business on the right foot. 

What Are Business Startup Costs?

Every new business owner will run into costs associated with launching a business — but the amount you’ll pay depends on your business type and your needs. You’ll want to know ahead of time estimates of the business expenses you can expect so you aren’t hit with surprising costs you can’t afford during the launch process. 

Business startup costs depend largely on the type of business you open, which can be:

• Brick-and-mortar
• Service provider

When you start a new business, you may pay for things like business formation fees, marketing costs, business insurance, a website, and more. We cover each possible expense in detail below.

Compare Business Formation Services

Form an LLC, corporation, or nonprofit, and get an EIN, business license, or registered agent service. Use Nav to find the right business formation service for your business.

How Much Does It Typically Cost to Start a Business?

The amount you’ll pay to start a small business will depend on the business itself. According to a 2021 Shopif y survey , small business entrepreneurs spent $40,000 on average in the first year of launching a new business. But this is an average. 

A small business with a physical location will come with a heavier price tag than a business that is run completely out of a home. You’ll have to pay for things like rent or a commercial mortgage, furniture, and physical marketing materials. But you’ll also need more insurance coverage since you’ll have a business location where customers or employees could hurt themselves. 

You can use this startup costs worksheet from the U.S. Small Business Administration (SBA) to help guide you through your estimate process.

10 Most Common Startup Expenses

In the first year of running a small business, you’ll likely encounter two types of costs:

• Capital expenditure : One-time purchase or debt that invests in the future of your business. This can include purchasing new property, facility upgrades, updated equipment, or patents. 
• Operating cost : Ongoing expense that allows your business to run in an efficient and productive way. Marketing, payroll, insurance, and research falls into this category.

The amount you pay for each operating cost depends on how much of the work you do yourself and how much you offload onto a professional that you’ll have to pay.

Here are the 10 startup expenses you’re most likely to encounter.

1. Research costs

Conducting market research before you launch a business can bring clarity to how effective your products or services will be. You can subscribe to a marketing research platform for a more affordable but more do-it-yourself option. Or you can hire a market research firm. According to the Vernon Research Group , hiring a market research firm can cost anywhere from $4,000 to $50,000, depending on the type of research you conduct.

2. Getting a business plan written

A business plan is an essential document that establishes your business structure and goals. You can write your own informal business plan or subscribe to software like LivePlan to guide you through the process, which charges a monthly fee. 

Otherwise, you can turn to a business plan company to complete it for you. If you hire a professional service to write your business plan, you can expect costs to start around $1,500 and increase with complexity. 

3. Business formation fees

How much you’ll pay for business formation depends on the business entity type you choose. A sole proprietor won’t have costs directly associated with founding a business, but an LLC will need to pay to file articles of organization (or if you’re incorporating, articles of incorporation). Filing fees depend on the state you live in but typically cost between $50 and $100, and may cost as much as $300. 

You may also have to pay for a state or federal business license , depending on your industry. Associated costs depend on the license.

4. Insurance and permits

Business insurance can provide protection if you need to pay for claims against your business. Without insurance, you’ll have to pay upfront for the damages and potential legal fees. You’ll likely need different business insurance if you run a fully online business than if you operate an office space, for example. 

The most common types of business insurance are:

• General liability insurance : Protects against “general” claims for property damage, bodily injury, or personal injury. The cost is determined by how risky your industry is, like retail vs. construction. 
• Errors and omissions insurance : Covers mistakes you or your employees make against customers or clients. The price depends on factors like the size of your business, the industry, revenue, and its employee training process.
• Commercial property insurance : Protects offices or brick-and-mortar locations against damages from instances like flooding, fire, theft, or vandalism. The cost depends on factors like the property value and its assets, as well as its location. 
• Workers compensation insurance : Pays for medical and benefit costs for employees that get hurt or ill while working. The cost of your workers’ compensation policy depends on the state, business size, payroll, and your industry’s risk. 

Having a business website that looks good and is functional is essential — it acts as the face of your business. Hiring a web design company to create a website for you can cost into the tens of thousands of dollars, but it can be worthwhile to pay this cost upfront to ensure that your site is everything you need it to be. You’ll also need to consider hosting options, which can determine how quickly your website loads when customers visit, and how much traffic your site can handle.

There are several affordable do-it-yourself website builders and hosting services out there, including:

• Squarespace : You can use this website builder to create a business website for between $16 and $49 per month. 
• Weebly : Create a business website for between $0 and $26 per month. 
• Wix : Its website plans cost between $16 and $45 per month. 
• Shopify : You can set up an online shop for between $29 and $299 per month. 

6. Setting up accounting systems

You don’t want to skip figuring out your accounting process before you start a business — or you may find yourself under a mountain of paperwork come tax time. Some accounting solutions cost money. To start with, opening a business bank account is a great way to separate your personal and business expenses from the beginning. (And you may pay a monthly fee, depending on the account). 

In terms of tracking your transactions, you can do it for free manually using a spreadsheet or pay for software that automates much of the process:

• QuickBooks : $30 to $100 per month
• FreshBooks : $15 to $50 per month
• Xero : $12 to $65 per month
• Wave : Accounting software is free

Connecting your business checking account to accounting software can simplify your bookkeeping and accounting. You can import your transaction information to easily see your business’s cash flow and expenditures. When it comes time to pay your business taxes, you can send this information directly to your bookkeeper or CPA. 

7. Marketing expenses

You may not need to pay for marketing, but if you do, it’s good to keep costs below 10% of your total budget. Your business may benefit from physical marketing materials, like signs or mailers, or from online marketing. Social media marketing can be free or paid. 

Come up with a small business marketing plan to make sure you are clear on your goals and not spending money without getting results. 

8. Technology and equipment fees

An office or physical location can eat up a large portion of your budget. Whether or not you have an office that staff comes into, you’ll need to equip it. You’ll need reliable technology like a computer and internet access to run any modern business. If you have a physical location or staff office, you’ll need things like office supplies and office furniture. Costs depend on how large the location is and the types of equipment you need.

9. Inventory fees

If you’re opening a business that requires you to keep inventory, like retail or wholesale, you’ll need to estimate how much your initial inventory supply will cost. You’ll want to consider stocking up more inventory in the beginning than you might later. The cost depends on how much inventory you need and what you’re ordering. 

10. Hiring employees

According to Glassdoor, it costs around $4,000 on average to hire someone new. These costs include background checks and drug testing, marketing, posting on job boards, and any internal expenses. These expenses will vary based on your business, but if you’re planning to hire employees for your new business, you’ll need to budget accordingly.

In Total, How Much Startup Cash Will You Need?

As mentioned, the average business startup costs fall around $40,000, but you can do it for much less or much more. The amount you pay for organizational costs depends on factors like your business size, the industry, the state it’s located in, and whether or not you have employees. 

If you complete your startup cost estimate and realize you don’t have enough cash on hand to launch — even though you’re ready in every other way — consider turning to lenders. Small business lenders can give you a leg up to start a new business and help you avoid waiting around for years before launching. 

Nav shows you your best options for small business loans if you need cash for things like capital expenses or business credit cards for help with cash flow. Create a free account at Nav.com to see the financing options you’re most likely to qualify for instantly.

Can You Write Off Startup Costs?

Yes, you can deduct certain startup costs on your tax return, but not all of them. The IRS provides a useful breakdown of what is allowed for a tax deduction for a new business. However, it’s a smart idea to hire a professional accountant to complete your tax return for you because of the complexity involved.

Tiffany Verbeck

Tiffany Verbeck is a Digital Marketing Copywriter for Nav. She uses the skills she learned from her master’s degree in writing to provide guidance to small businesses trying to navigate the ins-and-outs of financing. Previously, she ran a writing business for three years, and her work has appeared on sites like Business Insider, VaroWorth, and Mission Lane.

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Many aspiring business owners don’t know where to get started. They have a vision, but thinking about marketing, hiring, product development, and more can become overwhelming. In most cases, the best place to start is crunching the numbers—determining your business startup costs.

Without a budget, you can’t make good decisions, and you can’t make a budget without understanding your expenses.

So to help you keep your business from being one of the many that go under each year, we wanted to outline some examples of typical startup costs so you can better budget your business and know what to expect. After consulting this cost checklist, you should be able to determine a forward plan of action for your new enterprise.

Note that we wanted to focus mostly on online  businesses, but other businesses can still greatly benefit and do some quick adjustments and research to make sure they’re on the right track as well.

Business Startup Costs

Supplies, furniture, and office space, marketing and web presence, inventory and production, fees, taxes, and licenses, having a backup fund, setting up your budget, paying yourself adequately.

You need to be able to support yourself without hurting yourself. If you cut corners in your own personal life (by deeply cutting your salary), it can affect your physical and mental health, which can be a contributing factor to business failure. The Global Benefits Attitudes survey shows a clear link between reduced workplace productivity and increased stress levels. Don’t sell yourself short, and don’t try to cut your own salary first.

Review the real cost of living in your area and be honest with yourself about what you would be comfortable with. Be sure to add health insurance and other benefits (for yourself and your household, if applicable) into that equation.

This is your business. Your personal well-being is a core need to consider. When calculating your salary needs, include:

•        Rent or mortgage payments •        Utility costs •        Child care costs •        Property, luxury, excise, and other taxes •        Insurance (car, home, and/or other) •        Vehicle payments or maintenance costs •        Debt or credit card payments. •        Groceries •        Entertainment costs •        Gifts •        Clothing

Your payroll for your business, especially an online business, can be a complicated item on your startup costs list. As a general rule, payroll is the greatest startup cost for a business. Fundera  considers it to be 25-50% of a total budget.

At the same time, your employees, if you have any, will make or break your business.

An online business has many options and few constraints. It might be in your best long-term financial interest to have someone on your permanent payroll. But you almost never need onsite employees, and you can look to the growing pool of remote workers .

There’s a strong possibility that you’ll want to use freelance help as you start your business, as there are a series of specialized tasks (web development, perhaps some initial marketing, graphic design, and more) that you’ll want help with.

Freelancers vary in cost greatly depending on the level of experience you are looking for. This is also the department where “you get what you pay for” matters most. Don’t let working for your business become a race to the bottom for subpar freelancers desperate for any gig.

You can find freelancers either through job boards, contacts you might have in the industry, Facebook groups, and sites such as UpWork  and Fiverr . Each platform has its advantages and disadvantages, so look for what would be best for your needs. If you need help, consult this resource on how to hire remote workers or hire for small businesses .

As for the business startup costs relating to freelancers, try to tally up the estimated hours and multiply that by the rates you are willing to pay.

Here are a few common examples of freelancers you might hire and what they might cost:

•        Freelance writers (for initial copy) – They are generally paid per word. For quality work you can expect to pay 15 to 25 cents per word. Some writers also charge per project. •        Freelance designers – $25-$300 per hour •        Web Development or Programming – $30-$150 per hour •        Virtual Assistants – $5 to $25 per hour

The rates vary due to location, service, and what the freelancer charges. Typically, US-based freelancers charge the highest rates. Here’s a more detailed breakdown of average freelancer hourly rates .

Just because your business doesn’t have a physical storefront doesn’t mean that you don’t need a space and tools to work with. Many owners don’t consider this until too late when compiling their business startup costs list. We’re here to help you flesh out the ideas likely already floating around your head.

Computer Equipment, Programs, Apps, etc.

Computer equipment can be a notable business startup cost. For security and organizational reasons, we recommend having a separate setup for your online business than for your personal use. Unless you’re in video production or another business that will require a much more powerful setup, the following examples of startup costs can serve as a decent guide:

• A desktop with a monitor or two. We recommend something in the $1,000-$1,500 price range for most people.
• A laptop in the same price range ($1,000-$1,500) is a great choice, although you won’t get as much screen space and performance.
• A printer and scanner will prove necessary, and we recommend you pick something that will last your business a few years ($100-$200 should be a good range to start with).
• Software such as Word and Excel, and a finance tracking program. A point of sale program might also be necessary. These might run you $100-$300 a year for the relevant subscriptions.
• Data breaches can be extremely costly. With this in mind, a security suite and a password manager ( McAfee and Kaspersky are common choices) and a password manager ( LastPass is a fine option) are great investments for about $100 a year. You might also want protective measures for your websites and other online assets.

Home Office Space

You can run your business from your couch, but it is far from the most productive option. You need to invest in a space or working environment  free from distractions for hours at a time. It doesn’t need to be extravagant, but it does need to be comfortable and meet your needs.

As far as furnishing it, you don’t need to let it take over your business startup costs list. You should be able to find everything quite cheaply if you don’t mind things that might be used or mismatched. You can easily find a desk for at or less than $50 and a good chair for the same price. You can find a working lamp for $10 and a filing cabinet for $40-$50. Consider looking at Facebook Marketplace , Craigslist , or similar sites.

Working from home can actually ease your tax burden, but if you can’t make it work, this can easily balloon into one of your largest expenses. Another idea would be to find a coworking space or startup incubator in your area. They often have tiered options, from floating desks to private offices, that can grow with your business.

Read more: Learn How to Start a Small Business at Home

Marketing makes your business stand out from the rest of the pack. You might be intimidated by the huge costs of large marketing firms, but don’t worry. You don’t need to work with a firm when you are starting out. You can DIY your marketing and as you scale, start outsourcing  your marketing tasks to freelancers and/or agencies.

To manage marketing-related business startup costs wisely, you might want to start with some of the following options first:

Use Your Personal Network: You shouldn’t spam everyone you’re connected to, but you should reach out to anyone who would be genuinely interested, via email or social media. Talk to them about what you’re doing. Seek not to just promote your brand but to help people while promoting your brand. The only cost is some of your time.

Note the Importance of Word of Mouth Marketing: As this Invesp infographic  shows, many studies have been done to the effect that word of mouth marketing is by far the most effective long-term option for most businesses. Building a strong reputation is an effective strategy for long-term success, and building a strong reputation is more about your service and product quality than any single expense.

Content Marketing:  This tends to be a long-term investment, which might not sound great for a business startup cost, but content marketing will in time help get more eyes on your online business. Focus on quality, not quantity, and offer information no one else can. As for the cost, you can either hire content specialists (which can be expensive, depending on the field and quality of writing you want) or work on it yourself for the cost of your time. To learn more about content marketing and the potential tactics to use, Content Marketing  Institute is a great resource.

Here is a list of some typical content marketing tasks. As far as the costs, they entirely scale, so you will want to determine your marketing budget and see how much you wish to invest in each method.

• Content creation: refer to freelance writing rates earlier in this article.
• Influencer marketing: Rates range from free product for influencers to thousands per content piece posted, depending on the popularity of the influencer.
• Search Engine Optimization: When you start your business, you can do your own SEO. As you grow, you may want to consult with experts. You can either hire a freelancer (see section above) or use an agency. An agency will cost you the most money, with packages in the thousands of dollars per month. Costs will vary, but here are some industry averages .
• Social Media: Social media marketing won’t cost you anything but your time and maybe a few posting tools to help you stay organized. As you grow, you can hire a social media manager to create content and manage your profiles. We talk more about social media in the next section.
• Advertising : Be careful when it comes to social media advertising . In the past 2 years, competition and cost have drastically increased. So hire a trusted agency, or professional, or learn how to do it from an expert. Costs can range from $40-$60 per hour or more depending if you’re working with an independent contractor to set up your ads or working with a full-service agency.

Web and Social Media Presence

Your web and social media presence is for all intents and purposes your storefront. Even if you have a brick-and-mortar business, it’s a nearly mandatory business startup cost.

Here are the things you need to work on and their associated costs:

Social Media Accounts

Facebook and Twitter are useful platforms to engage with your audience and build a community of followers.

Instagram is another important account to create, especially if you’re dealing with physical products that you want to show off to potential customers. Consider platforms where your audience (or potential customers) spend screen time. Don’t be afraid to start on platforms like TikTok . Even if you don’t have time to invest in different channels, securing the handles will ensure your brand is secure if you want to pursue growth at a later time.

Regarding upkeep and maintenance, you don’t need a professional social media manager in the beginning, as they are simply another monthly cost of running a business that you can spend elsewhere.

Focus on the platforms you think will be most effective for your business, favor in time expenditures, and invest in a few social media management apps such as Hootsuite , Buffer  or Sprout Social   to make things easy on yourself. The plan/app will cost $30-$100 a month (some have a free option).

A Quality Website

Since in most cases this will be your storefront, your website is a business startup cost you’ll want to make a priority. Look into getting professional help, but note the tiers of cost:

• A fully functional bespoke (100% custom) website can cost you upwards of $10,000, but you likely don’t need to start there.
•   $50-$100 for the basic template. (Here’s a popular WordPress template gallery )
• $25-$50 per hour for a developer to customize the template
• Additional varying costs based on the content you want on your site (see freelancing costs).
• Another few hundred per year for additional features such as security measures, an SSL certificate, guarantees and support costs, and miscellaneous website expenses.
• You can use sites like  UpWork  to get contractors to bid on your website project. You may be able to get a basic functional site for your business for a few hundred dollars. Just make sure to check the reviews of the applicants and choose providers with a long work history and good reviews.

If you have a little technical know-how and you want to load the WordPress template yourself and tinker around with it, you will only need to purchase the template. Templates come with customization instructions that don’t require a developer. You will, however, need a developer if you want to go above and beyond the template’s capabilities.

WordPress Alternatives

If you are starting an ecommerce business, Shopify  is an all-in-one website creator. Similar to WordPress, you can customize the templates within Shopify’s capabilities, but above and beyond that will require a developer. In most cases, most ecommerce businesses do not need a developer, as Shopify offers many apps that cover most ecommerce needs. Pricing starts at $29/month.

If you are running an agency, or freelancing or consulting or starting a creative endeavor, Squarespace  may be an option. The templates and customization are limited but they are modern and beautiful. Squarespace will be an option if you are looking for something simple and streamlined. Pricing starts at $12/month billed annually.

Note that these options above include  website hosting and maintenance in the price. That’s why there is a monthly fee. If you go with WordPress.org, you will have to secure your own hosting.

Web Hosting

Web hosting will, at least at the start, cost you perhaps $10 a month, and scale up from there. The domain name will be an additional few dollars a month, and outside of that it depends on the tools and other services you might be using.

We would like to note that professional help in this area is often worth it. The hours you would have to put in to create a great website can often be costlier than hiring someone else.

Inventory is a wildly varying business startup cost. If your online business is service-based or you don’t have any inventory to worry about, please feel free to move on to the next section.

Otherwise, the main priority from a business startup cost perspective is to make sure that there is always enough product available to fulfill orders. If you can’t fulfill orders, you can’t make any profit and you’ll likely lose customers.

Consider the following factors:

• Do the products expire or age in any way? Does it require any special type of storage conditions in order to maintain optimum quality?
• How easily can you restock? Is there anything that, at times, might be unavailable? How long does a manufacturing order or shipment to your processing center (or office) take?
• How quickly do you expect products to sell? Does your business focus on moving a lot of inventory or selling the right, more expensive items to a few buyers?
• Can you scale up storage in the event of success? You don’t want to be caught unaware by an unexpected spike in sales.

You will also want to consider storage costs, which can similarly vary based on the nature of your products. Look into what’s locally available or consider an external fulfillment service.

If you are handling manufacturing or creating your own products, you will need to consider production costs. The numbers here will vary so greatly that only you can do the math, but we do have a few tips and action items:

• You can mitigate some of the production costs through bulk orders, but you’ll become a little less adaptable in the process. What if you want to change your design or model after you start? What if you find a small design flaw in the first batch? You will need to strike the right balance.
• A manufacturing partner can be expensive, but things like reliability and accessibility mean a great deal and can be worth the added cost. For example, if a factory shuts down, has other orders, or simply goes off the grid for a few days when you need to reach them, those lost days will eat into your profit margin.
• If you perform production yourself in any way, you will want to consider the costs of scaling up should you find success. Can you reasonably put more time and effort into creating more cakes, for example? What’s the cutoff point for your own effort?

This guide can provide you with further information on inventory and production pricing through the cost of goods formula (COGS).

When determining and managing your business startup costs, you are going to want to spend some time making sure these routine costs are accounted for.

Taxes are another item that will vary from business to business, and the nature of online business often makes it trickier. You do not want to deal with a tax bill you never anticipated nor budgeted for. You might need to deal with several different levels of taxes, depending on how and where you operate.

• As an individual, you should learn more about self-employment taxes .
• You will need to pay taxes quarterly.
• You will need to pay taxes on any profits your business generates.
• You will likely need to pay payroll taxes , unemployment taxes , and workers’ compensation taxes (this varies depending on your country or region).

You will also either want to consult a tax professional or review the regulations in your area via the website of your state’s department of revenue.

Processing Fees

These can add up to cost you 1-2% of your revenue if you’re not careful. If depends partially on the deal you have going with your payment processor. PayPal often takes a cut ($0.30 USD, plus 2.9% of the amount you receive (more on Paypal fees here ), and credit card processing ( can range from very low to 3%+ depending on your agreement) will be the most common culprit. Also, beware of banking fees.

Licenses and Permits

While we won’t go into too much detail here (there are too many options, and it would be wise to look this up if applicable on your own), we do, however, want to remind you to budget for appropriate licensure and permits in your industry. This is more likely to apply to food service industries, construction industries, and some financial service industries. This guide from Fundera  is a great resource to work from to learn more. You should also look at local (city and town) regulations that might pertain to your industry.

Most businesses are not profitable at first, and it could take quite a while to break through and earn a steady stream of income. While the costs of an online business aren’t exorbitant as they might be for more traditional businesses, they can still be a drain, especially if you’re also working on it full time and have no other sources of income. You do not want to make business decisions based on short-term personal financial needs.

When starting out, you need to make sure you either have a reliable stream of income or enough in the bank to keep full operating costs going for at least one year and up to three years, if you think your platform or idea might take a while to take off. This guide will break down the different types of routes to funding a startup. This amount can vary greatly depending on your industry, so do some extra research beforehand and know how much you should have stored away.

Your budget should, at the end of the day, be one of the guiding documents of your business, alongside its mission statement and business plan. You can organize it how you would like. Just remember that businesses that don’t keep the details in mind generally aren’t as efficient as businesses that do. As for how to set it up, follow these steps:

• Make an itemized list of every expense or potential expense associated with your business.
• Plan out each item over the quarter as well as the year, as best as you are able.
• Set up a system where you can easily and nearly automatically update it each day or week with any new expenses, etc.
• At the end of each quarter, review your budget and adjust it as necessary. Be OK with the unexpected occurring and the numbers not perhaps being what you expected, but take the new data into consideration when making adjustments.

While there are further details, those are the basic steps. You can either use a program such as Float  or Freshbooks  to help you, or you can use a spreadsheet (and there are templates to help, you can download plenty from Microsoft  alone for Excel).

No two budgets should ever look the same, but here are a few additional things you should consider when setting up your budget for business startup costs:

• Have an emergency fund outside of your backup fund ready. If you have the resources to deal with it, it’s less of an emergency and more of an inconvenience. Try to have at least three months of expenditures on hand for an emergency, or more if you know something particularly expensive could happen such as upcoming car repairs.
• Try to keep a simplified budget handy that you can check at a glance, so you can refer to it as you make decisions.
• A budget is at times an evolving document. The budget should reflect reality as best as possible, and sometimes that requires changes to be made.
• Track everything. There is no expense too small. There are apps and programs to help with this if you think it will be too much of a chore (and those feels are justified). Some of these are Mint , Moneybook , and QuickBooks .

Managing Your Business Startup Costs

We encourage you to bookmark this page so you can check back for reference later. No one expects you to understand everything all at once and this can serve as a great business startup costs list.

Remember that your labor and energy are important things to consider when establishing how much it cost to start a business. Be aware of service and recurring costs, hidden opportunity costs, and similar items. Keep all of your options available to you, and don’t forget that managing costs effectively doesn’t always mean cutting corners. Above all else, be open to new opportunities and adapting to the market.

You shouldn’t have to start your business alone. Explore our free training series for frameworks at every stage of your entrepreneurial journey.

About Kevin Conner

Kevin Conner is the founder and CEO of Vast Bridges, a customer acquisition and lead generation company in the home services arena. Kevin has contributed to outlets such as Startup Stockpile , AgilityPR and more. Kevin Conner and Vast Bridges have been featured in Inc and the Jacksonville Business Journal .

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Business Startup Costs: A Comprehensive Guide

Starting a business comes with several expenses. And it is much more than what you see on TV shows like Shark Tank. So, how much does it cost to launch a company? To know more about how much it costs to launch a company, read our blog.

Shaurya Bedi

A business is much more than its furniture and infrastructure.

Starting a business comes with several expenses. And it is much more than what you see on TV shows like Shark Tank.

So, how much does it cost to launch a company?

Numerous variables, including the nature of the business, its industry, location, and scale, influence the initial costs of starting a new venture. The amount can range from a few hundred to several thousand dollars. But if you are not careful, it could also be enough to drive you into bankruptcy.

For this reason, knowing all the expenses associated with launching a business—from marketing and advertising to research and development—is essential. That is the only way to make a budget that works and keep yourself out of debt later on.

We have compiled a list of the various business start up costs you must consider when launching your company. This guide will discuss everything you need to know regarding the costs of starting a business. It will include topics like how to calculate them and, most importantly, how to reduce them.

But first, let's comprehend what business start up costs for a business are.

What are business startup costs?

Startup costs are the expenses incurred while starting a new business. These are the outlay of funds and initial investments necessary to launch a new company. These expenses are incurred before the company's everyday operations and revenue generation. 

Since every business is unique, they all need different startup expenditures. Brick-and-mortar stores and online retailers have different needs, just as coffee shops and bookstores have different needs. Nonetheless, the majority of business kinds share a few standard costs.

Importance of business startup costs

Startup costs for a business are the foundation of your company's financial planning. They give you a detailed road map that shows how much money you will need to launch your company. This financial transparency is crucial for obtaining the capital required to start your business, whether you are looking for loans, investments, or personal savings.

Moreover, thoroughly analyzing your start up expenses lets you make a precise and reasonable budget. Having a budget helps you manage your resources more effectively and prevent overspending. Early in a business's life, excessive spending can pose a severe risk and result in unstable finances.

Startup costs also influence resource allocation. You can effectively distribute your resources if you know the exact figures required for each aspect of your business, such as marketing, equipment, inventory, and staffing. This ensures that critical areas receive the funding they need to operate efficiently.

Furthermore, understanding your startup costs allows you to assess the financial risks associated with your business venture. It enables you to recognize possible obstacles and ambiguities and make backup plans. This proactive risk assessment approach can be a valuable tool in navigating the uncertainties often accompanying starting a new business. 

Remember that launching a business comes with many ongoing expenses that can happen once a month, once a quarter, or once a year. These consist of costs for payroll, office supplies, and rent. However, some expenses—like the incorporation fee or office furniture—are one-time.

Plan to be able to pay for at least six months' worth of expenses upfront when calculating your startup costs. It is not advisable to depend on your company's sales to cover these expenses until after this first phase. This cash reserve can act as a safety net while you launch your company and cultivate your clientele.

How to calculate the cost of starting a business

One of the most important steps toward understanding the financial needs of your startup is to draft a well-thought-out business plan. The financial projections section of your plan is critical in estimating your income, profits, and expenses over the next three to five years.

You can also get valuable tools to help you estimate your startup costs, like this startup costs worksheet from the Small Business Administration. When looking for startup funding, templates such as this can help you figure out how much money you will need initially.

A methodical approach to identifying, estimating, and planning for various expenses is necessary when calculating the cost of starting a business. Here's a step-by-step guide to assist you in figuring out your startup expenses:

• Clearly state your business concept, including the goods or services you plan to provide, your intended customer base, and your business plan.
• Create a detailed business plan that includes a section on financial projections. This will serve as the basis for estimating startup costs.
• List every possible expense related to launching and operating your company. A few of these are:
• One-time costs: These are expenses like legal fees, permits, licenses, logo creation, website development, first inventory, and equipment purchases that are only incurred once. If you were setting up a company in Hong Kong, for example, you'd have to take local legal fees and licenses into consideration as well.
• Ongoing costs: These are recurring expenditures that include office supplies, marketing, insurance, rent, utilities, and employee salaries.
• Working capital: The funds required to cover daily operating expenses until your business becomes profitable.
• Contact suppliers, service providers, and potential vendors to obtain accurate quotes and estimates for your identified costs.
• Look up industry averages and benchmarks for the beginning costs of businesses in your particular field. This can offer insightful information about what to anticipate.
• Seek advice from professionals such as accountants, lawyers, and industry experts on potential costs specific to your business.
• Consider using templates and tools like the Small Business Administration's (SBA) startup costs worksheet to estimate your expenses systematically.
• Create a detailed budget by combining all of the expenses you have determined. Sort out your expenses and give each one a price. A thorough breakdown of your startup expenses should be included in this budget.
• Set aside money for unforeseen events or unforeseen costs. A contingency fund should be included, usually between 10% and 20% of the total estimated costs.
• Once you have gathered all the required data and estimates, decide on a starting budget. After looking at this budget, you will have a clear idea of how much money you need to start your business.
• If the entire start up cost for business is more than your savings, you will need to figure out how to get the money. Personal savings, loans, grants, angel investors, venture capital, or crowdfunding are all options.
• Maintain your budget as you refine your business plan and gather more accurate data. Regularly reviewing your financial projections is critical for effectively managing your startup costs.

The most common startup costs examples

While this is a general list of startup costs for businesses, your actual startup costs will be determined by your industry and type of business.

Here are some typical startup costs to consider:

Licensing and incorporation fees

Your chosen entity will impact your business's taxes, legal structure, and finances. You must file incorporation or organization articles with your state if you decide to form an LLC or incorporate. You could even form a C-Corp with the help of GovDocFiling for its limited liability protection, if interested. Although most states keep filing fees under $300, they can range from $40 to $500 . 

In addition to incorporation, you might need federal or state licenses and permits depending on the industry and area. Federal licenses are necessary for the agriculture and aviation industries, trade-specific licenses may be required by service-based businesses, and retail establishments frequently need sales tax licenses or permits.

Research and development (R&D)

Investing in R&D is crucial for prospective business owners. R&D expenditures can range from $100 to over $30,000 . It entails setting aside funds for product development, identifying target markets, and conducting market research. Even well-known businesses like Alphabet and Amazon devote much of their earnings to research and development.

To begin your R&D, evaluate your objectives, financial constraints, and expertise. App or website development can be accelerated by hiring an internal software engineer. Consider the value of proprietary knowledge as well; external product development hires may raise data privacy concerns. Remember, R&D is not a one-time investment but a continuous process of improving features, innovating, and adapting to market dynamics.

Borrowing costs

A capital injection is unavoidable when starting a business, which can be accomplished through either equity or debt financing. The most common form of equity financing is the issuance of stock, but this is rare among small businesses, which are often sole proprietorships.

For many small business owners, debt, typically in the form of a small business loan, is the primary funding source. These loans are available from banks, savings institutions, and organizations such as the United States Small Business Administration (SBA). 

However, it should be noted that SBA business loans, like any other loan, have interest payments. Including these interest payments in your financial planning is critical because the consequences of failing to do so can be severe.

Office space and infrastructure

Whether you buy or rent, a sizable amount of your fixed start up costs for business will go toward finding retail or office space. Office space starts at approximately $300 per month (per employee) . However, the monthly cost of office space in bustling cities like New York or San Francisco may exceed $1,230 per person . 

You can start working from home, look into coworking spaces, or go directly to the client to save these expenses.

The costs of office supplies and furniture can mount up quickly. Every worker in a conventional office needs a desk, chair, computer, and phone. There are also small office supplies, break room appliances, and necessary software, such as accounting programs. These expenses may differ according to your company's particular requirements and the number of workers that need to be outfitted. These costs can vary between $50–1000 per employee , depending on your company.

Licensing essentials

Virtually all businesses, even those that operate entirely online, require specific licenses to operate legally. Common types include:

• Business Operation License: Required for conducting business within your city, county, or state.
• Seller's Permit: Allows businesses to sell goods or services, including those sold online.
• Zoning Permit: Required approval of your business location to ensure it complies with local zoning regulations.
• Health Permit: Required for most food-related establishments such as restaurants and cafes.

Speaking with an expert lets you find out exactly which licenses you require. Remember that getting licenses usually requires paying fees, some of which can be high, so make sure you budget appropriately. Taking shortcuts when it comes to licensing can legally put your company's future in danger.

Technology and equipment

Purchasing hardware and software, including computers, internet subscriptions, and software, can be expensive. Costs for infrastructure, such as business internet plans, also apply to companies having physical offices.

Define your core business model and determine your essential technology needs first to make well-informed decisions. Sort your technological needs into "must-haves" and "nice-to-haves" categories. Prioritize cost-effectiveness in the early phases of your project. 

Payroll management 

Payroll management is a significant cost for most businesses, but it is essential to creating a solid and productive workforce. Remuneration for exceptional team members should be equitable and competitive.

Payroll costs can range from 15% to 30% of an organization's total budget, which is a significant amount. Businesses can devote up to half their budget—or even more—to payroll and still turn a healthy profit. In the first year, startups, on average, pay $300,500 for five employees in the United States.

Aside from salary and wages, other components of your company's payroll expenses, such as commissions, bonuses, benefits, paid time off, and overtime pay, must be considered. These components support an all-encompassing and open approach to workforce compensation, guaranteeing that your workers are engaged, devoted, and well-cared for. 

Business insurance

New business owners must consider insurance. Depending on the risks and nature of your business, you may require different types of coverage:

• Workers' compensation: It's a must if you have employees. It helps protect your company from future legal action and offers benefits for workplace injuries.
• General Liability: Provides defense against third-party claims for property damage or personal injury, covering typical mishaps and accidents.
• Business Owners' Policy (BOP): Provides small businesses with affordable, all-inclusive coverage by combining property and general liability insurance.
• Professional Liability: Essential to service-oriented companies, it provides coverage for court costs and settlements resulting from professional mistakes.

For possible cost savings, think about combining policies with a single insurer. When planning your insurance budget, consider the unique requirements and hazards facing your company to select the right level of coverage.

How to cut down on business startup costs

Starting a business doesn't have to be scary! You can save the business start up cost that are emptying your pockets in several ways.

Virtual Operations: If you want to save money on rent, utilities, and upkeep, think about running your company from a remote location. Working remotely can boost flexibility and cut down on overhead.

Hire a Virtual Assistant: Rather than hiring internal staff, you might consider hiring a virtual assistant as a more affordable startup option. This approach has many advantages that can significantly reduce initial costs. Virtual assistants provide flexibility, allowing you to scale your workforce to meet the needs of your business. Furthermore, they eliminate the need for physical office space and the associated overhead costs, such as rent and equipment. 

Leverage used equipment: Consider purchasing used equipment or exploring shared equipment arrangements with other businesses to reduce upfront costs. This approach is handy for expensive machinery or tools.

Prioritize Essential Expenses: Prioritize expenses such as business insurance, legal compliance, and necessary equipment. Setting these essential expenses as a top priority will guarantee that your company runs smoothly and keep you out of trouble with the law.

Grants and Crowdfunding: Look into different funding options like grants and crowdfunding websites. Long-term debt can be decreased by using these resources to provide financial support instead of taking out loans or investing in equity.

Cut Marketing Expenses: Use low-cost marketing techniques like content marketing, SEO, and social media marketing. With these strategies, you can effectively reach your target audience without incurring the hefty costs of traditional advertising campaigns.

How can Wishup help you save on overhead and payroll expenses?

Are you tired of spending a fortune on employees and managing payroll?

Wishup has the answer to help you save a ton of money, restore your peace of mind, and concentrate on your primary business goals. We will help you locate the ideal virtual assistant to take care of any task your company needs to be done.

Our team comprises professionals with specialized knowledge in the field who can quickly meet your needs, whether you need on-site help or remote support. Together, we will thoroughly understand your unique needs and provide customized recommendations to improve your ongoing business operations. We stay flexible and adaptive to meet your changing needs as your business grows.

Our virtual assistants can handle several duties, including data entry, research, and financial management. They are your administrative lifesavers. By hiring them temporarily, you can streamline your business operations without exceeding your budget.

Wishup provides several valuable benefits, including:

• Our virtual assistants are among the top 0.1% of applicants, with expertise in over 200 skill sets and mastery of over 70 no-code tools.
• If your virtual assistant is unavailable, we quickly provide a replacement to ensure uninterrupted support.
• You have the freedom to select virtual assistants who are based in the US or abroad, according to your personal preferences.
• We invest in rigorous training for our virtual assistants to help them improve their skills and stay current on industry trends.
• Try our virtual assistants for seven days to ensure they meet your business needs.
• Protecting your sensitive information is critical. To protect your data, all our virtual assistants sign non-disclosure agreements.

With Wishup's assistance, you can delegate tasks, improve efficiency, and propel your business forward while controlling your budget and resources.

Key Takeaways

Unquestionably, one of the trickier parts of being an entrepreneur is coming up with a budget. But the real skill in business budgeting is knowing how to add a dose of reality to your initial financial planning and startup cost estimates. This strategy not only reduces the anxiety of starting a business but also plays a crucial role in advancing your enterprise's chances of success.

If you don't want to end up in such a situation, you can contact us by mailing at [email protected] or booking a free consultation with our success experts.

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Rebates rise as carbon price increases to $80 per tonne

Starting today, a litre of gasoline will cost an extra 3.3 cents.

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The federal carbon tax and its associated rebates rise today as the national price on carbon emissions increases from $65 per tonne to $80.

While the national carbon price applies across the country, not everyone pays the federal carbon tax and receives money back.

Carbon pricing works differently in Quebec, the three territories and British Columbia — residents don't receive federal rebates. The remaining provinces are subject to the federal government's carbon tax or fuel levy, and families or residents receive rebates from Ottawa.

Canada also has a mix of federal, provincial and territorial carbon pricing systems for industrial emitters.

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• Industrial carbon pricing has three times the impact on emissions as consumer carbon tax: report

Starting today, the federal carbon tax increase will cost drivers an extra 3.3 cents per litre at the pump. Since Ottawa's fuel levy was introduced in 2019, the carbon tax has added 17.6 cents to the cost of a litre of gasoline. The levies for other fuels can be found online .

The rebates — recently rebranded as the Canadian Carbon Rebate — also have increased along with the carbon price, says Finance Canada. To receive the rebate, you need to file an income tax return. The rebate arrives through direct deposit in your bank account or through a cheque in the mail.

The payments come every three months; the next one is scheduled to arrive as early as April 15.

Here are the amounts a single adult person can expect to receive quarterly:

• $225 in Alberta.
• $150 in Manitoba.
• $140 in Ontario.
• $188 in Saskatchewan.
• $95 in New Brunswick.
• $103 in Nova Scotia.
• $110 in Prince Edward Island.
• $149 in Newfoundland and Labrador.

Here are the amounts a family of four can expect to receive quarterly:

• $450 in Alberta.
• $300 in Manitoba.
• $280 in Ontario.
• $376 in Saskatchewan.
• $190 in New Brunswick.
• $206 in Nova Scotia.
• $220 in Prince Edward Island.
• $298 in Newfoundland and Labrador.

Rural residents get a 10 per cent top-up on their rebates because they tend to drive more and consume more fuel. That rural top-up will double once a bill now before Parliament becomes law.

Nova Scotia, P.E.I, and Newfoundland and Labrador, however, will see their rebates decrease after Ottawa exempted home heating oil from the carbon tax. In October,  Prime Minister Justin Trudeau announced  the government will pause for three years the carbon pricing scheme on home heating oil in the provinces and territories where the carbon levy applies.

While New Brunswick is not seeing a drop in rebate amounts, other Atlantic provinces are because Ottawa is collecting less money from these provinces that tend to be more reliant on furnace oil than other parts of the country. 

All the money that's directly collected by the federal carbon pricing system, the federal government said, is returned to the province or territory where it's collected. About 90 per of the federal carbon tax goes towards rebates. The remainder goes to Indigenous communities, farmers and businesses.

National carbon pricing, a core federal Liberal climate policy, faces mounting opposition. Before Monday's rise, the opposition Conservatives and at least seven premiers called on the government to halt the increase. Conservative Leader Pierre Poilievre says if he forms government he will "axe the tax," because of the financial hardship the rising carbon price places on families and businesses. 

It's unclear if a future federal Conservative government would also get rid of carbon pricing for industrial emitters. Poilievre has not detailed how his proposal to use "technology not taxes" would ensure Canada achieves its emissions reduction targets.

The federal government says eight out of 10 families receive more in rebates than they pay under the carbon tax. The total amounts also can be found online .

A fiscal analysis by the independent parliamentary budget officer backs Ottawa's claim. The budget watchdog's often-cited report found wealthy families will lose money when the carbon price reaches its highest level in 2030-31 at $170 per tonne. Lower and middle-income families will make money from the rebates, said the Parliamentary Budget Officer (PBO).

Carbon tax crash course: How it works and what it will cost you

The PBO also concluded in a separate economic analysis that at $170 per tonne, the federal carbon tax will cut jobs and profits in the transport and oil and gas sectors. This means workers in the oilpatch could lose their jobs and Canadians who hold shares in oil companies like Suncor or Cenovus could see lower investment returns.

"When both fiscal and economic impacts of the federal fuel charge are considered, we estimate that most households will see a net loss," said the Parliamentary Budget Officer Yves Giroux. "Based on our analysis, most households will pay more in fuel charges and GST—as well as receiving slightly lower incomes—than they will receive in (rebates)."

Are emissions falling because of the carbon tax?

After several years of the national carbon price. Environment and Climate Change Canada said its modelling shows Canada's emissions would have been higher without carbon pricing.

The federal department said that in the latest year for emissions data (2021), emissions "would have been approximately 18 megatonnes higher in the absence of Canada's carbon pricing plan." That figure is almost equivalent to the annual emissions of Manitoba.

"Changing the energy system in an economy is a lot like sort of steering a cargo ship. It does take time," said Sara Hastings-Simon, an associate professor at the University of Calgary's faculty of science who studies carbon pricing and energy transitions.

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"So we are just starting to see those, the results of those efforts and that ... if we can continue on that path, if we continue to have the suite of climate policies that we have in place, we will continue to see those emissions starting to fall from where they would have been and actually fall in an absolute sense."

The federal government has said that the price on carbon, including consumer and industrial carbon pricing, is expected to account for roughly one-third of Canada's emissions reductions.

Independent analysis from the Canadian Climate Institute, released in March, shows that the current suite of federal government climate policies is set to significantly reduce Canada's emissions.

The report found that carbon pricing — both the consumer and industrial versions — is projected to reduce emissions by as much as 50 per cent by 2030.

The report shows the pricing policy for large emitters accounts for most of the projected emissions cuts — driving three times the emissions reductions attributed to the consumer carbon price.

Parliamentary budget officer says carbon tax 'least disruptive' way to reduce emissions

The institute's report says industrial carbon pricing is projected to contribute "between 23 and 39 per cent (or 53 to 90 megatonnes) of avoided emissions from all policies implemented to date."

The report says the consumer carbon price accounts for between 8 and 9 per cent (or 19 to 22 megatonnes) of projected emissions reductions.

The Canadian Climate Institute conducts climate change policy research. It describes itself as a non-partisan and independent institute that receives financial support from Environment and Climate Change Canada and other private donors including the Ivey Foundation, Scotiabank and Loblaws. 

ABOUT THE AUTHOR

Senior reporter, Parliamentary Correspondent

David Thurton is a senior reporter in CBC's Parliamentary Bureau. He covers daily politics in the nation’s capital and specializes in environment and energy policy. Born in Canada but raised in Trinidad and Tobago, he’s moved around more times than he can count. He’s worked for CBC in several provinces and territories, including Alberta and the Northwest Territories. He can be reached at [email protected]

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iCloud+ plans and pricing

iCloud keeps your information safe, automatically backed up, and available anywhere you go — with 5GB of storage for free. When you upgrade to iCloud+, you get even more storage along with enhanced privacy features that protect you and your data.

About iCloud+

iCloud+ is Apple’s premium cloud subscription. It gives you more storage for your photos, files, and backups, and additional features* available only to subscribers:

iCloud+ with 50GB storage

50GB of storage

iCloud Private Relay

Hide My Email

Custom Email Domain

HomeKit Secure Video support for one camera

Share everything with up to five other family members.

iCloud+ with 200GB storage

200GB of storage

HomeKit Secure Video support for up to five cameras

iCloud+ with 2TB, 6TB, or 12TB storage

2TB, 6TB, or 12TB of storage

HomeKit Secure Video support for an unlimited number of cameras

You can upgrade to iCloud+ from your iPhone, iPad, iPod touch, Mac, or PC. After you upgrade, you'll be billed monthly. 1 See the monthly pricing and plans per country or region below.

* Not all features are available in all countries or regions. Without access to your IP address, some websites may require extra steps to sign in or access content after you turn on iCloud Private Relay. HomeKit Secure Video requires a supported iCloud plan, compatible HomeKit-enabled security camera, and HomePod, Apple TV, or iPad running as a home hub.

iCloud+ pricing

North america, south america, latin america, and the caribbean, europe, the middle east, and africa, asia pacific.

Bahamas (USD)

50GB : $0.99

200GB : $2.99

2TB : $10.99

6TB :$32.99

12TB : $64.99

Barbados (USD)

200GB : $3.49

2TB : $11.99

6TB :$34.99

12TB :$69.99

Brazil (BRL)

50GB : R$ 4.90

200GB :R$ 14.90

2TB : R$ 49.90

6TB : R$ 149.90

12TB : R$ 299.90

Canada (CAD)

50GB : $1.29

200GB : $3.99

2TB : $12.99

6TB : $39.99

12TB : $79.99

Chile (CLP)

50GB : $790

200GB : $2490

2TB : $8490

6TB : $29990

12TB : $59990

Colombia (COP)

50GB : $3900

200GB : $12900

2TB : $44900

6TB : $129900

12TB : $269900

Mexico (MXN)

200GB : $49

12TB : $999

50GB : S/.2.90

200GB : S/.9.90

2TB : S/.34.90

6TB : S/.99.90

12TB : S/.199.90

United States 4 (USD)

2TB : $9.99

6TB : $29.99

12TB : $59.99

Albania 2,3 (USD)

50GB : $1.19

200GB : $3.59

6TB : $34.99

12TB : $69.99

Armenia 2,3

Bahrain (USD)

Belarus 2,3 (USD)

Bulgaria 3 (BGN)

50GB : 1.99 лв

200GB : 5.99 лв

2TB : 20.99 лв

6TB : 64.99 лв

12TB : 129.99 лв

Cameroon (USD)

Croatia 3 (Euro)

50GB : 0.99 €

200GB : 2.99 €

2TB : 9.99 €

6TB : 29.99 €

12TB : 59.99 €

Czechia 3 (CZK)

50GB : 25 Kč

200GB : 79 Kč

2TB : 249 Kč

6TB : 749 Kč

12TB : 1490 Kč

Denmark 3 (DKK)

50GB : 9 kr

200GB : 25 kr

2TB : 89 kr

6TB : 269 kr

12TB : 549 kr

Egypt 3 (EGP)

50GB : £29.99

200GB : £99.99

2TB : £349.99

6TB : £999.99

12TB : £1999.99

Euro 3 (Euro)

Georgia (USD)

Ghana (USD)

Hungary 3 (HUF)

50GB : 399 Ft

200GB : 1290 Ft

2TB : 4490 Ft

6TB :12990 Ft

12TB : 26990 Ft

Iceland 2,3 (USD)

200GB : $3.69

Israel (ILS)

50GB : ₪3.90

200GB : ₪11.90

2TB : ₪39.90

6TB : ₪119.90

12TB : ₪239.90

Kenya (USD)

Moldova (USD)

Nigeria (NGN)

50GB : ₦500

200GB : ₦1500

2TB : ₦4900

6TB : ₦14900

12TB : ₦29900

Norway 3 (NOK)

50GB : 12 kr

200GB : 39 kr

2TB : 129 kr

6TB : 399 kr

12TB : 799 kr

Pakistan (PKR)

50GB : Rs200

200GB : Rs600

2TB : Rs1900

6TB : Rs8900

12TB : Rs17900

Poland 3 (PLN)

50GB : 4.99 zł

200GB : 14.99 zł

2TB : 49.99 zł

6TB : 149.99 zł

12TB : 299.99 zł

Qatar (QAR)

50GB : 3.69﷼

200GB : 10.99﷼

2TB : 36.99﷼

6TB :109.99﷼

12TB : 219.99﷼

Romania 3 (RON)

50GB : 4.99 lei

200GB : 14.99 lei

2TB : 49.99 lei

6TB : 149.99 lei

12TB : 299.99 lei

Russia 3 (RUB)

50GB : 59 p.

200GB : 149 p.

2TB : 599 p.

6TB : 3490 p.

12TB : 6990 p.

Saudi Arabia 3 (SAR)

50GB : 3.99﷼

200GB : 12.99﷼

2TB : 44.99﷼

6TB : 129.99﷼

12TB : 269.99﷼

South Africa 3 (ZAR)

50GB : R14.99

200GB : R59.99

2TB :R199.99

6TB : R599.99

12TB : R1199.99

Sweden 3 (SEK)

Switzerland 3 (CHF)

50GB : CHF 1

200GB : CHF 3

2TB : CHF 10

6TB : CHF 30

12TB : CHF 60

Tanzania (TZS)

50GB : 1900 TSh

200GB : 6900 TSh

2TB : 24900 TSh

6TB : 74900 TSh

12TB : 149900 TSh

Türkiye 3 (TRY)

50GB : 12.99 TL

200GB : 39.99 TL

2TB : 129.99 TL

6TB : 899.99 TL

12TB : 1799.99 TL

Uganda (USD)

United Arab Emirates 3 (AED)

50GB : AED 3.99

200GB : AED 11.99

2TB : AED 39.99

6TB : AED 119.99

12TB : AED 239.99

United Kingdom 3 (GBP)

50GB : £0.99

200GB : £2.99

2TB : £8.99

6TB : £26.99

12TB : £54.99

Zimbabwe (USD)

Australia 3 (AUD)

50GB : $1.49

200GB : $4.49

2TB : $14.99

6TB : $44.99

12TB : $89.99

Cambodia (USD)

6TB : $32.99

China mainland 3 (CNY)

50GB : ¥6

200GB : ¥21

2TB : ¥68

6TB :¥198

12TB :¥398

Hong Kong (HKD)

50GB: HK$ 8

200GB: HK$ 23

2TB: HK$ 78

6TB : HK$ 238

12TB : HK$ 468

India 3 (INR)

50GB : Rs 75

200GB : Rs 219

2TB : Rs 749

6TB : Rs 2999

12TB : Rs 5900

Indonesia (IDR)

50GB : Rp 15000

200GB : Rp 45000

2TB : Rp 149000

6TB : Rp 449000

12TB : Rp 899000

Japan 3 (JPY)

50GB : ¥130

200GB : ¥400

2TB : ¥1300

6TB : ¥3900

12TB : ¥7900

Kazakhstan (KZT)

50GB : ₸499

200GB : ₸1490

2TB : ₸4990

6TB : ₸14990

12TB : ₸29990

Kyrgyzstan (USD)

Malaysia (MYR)

50GB : RM3.90

200GB : RM11.90

2TB : RM44.90

6TB : RM129.90

12TB : RM269.90

New Zealand 3 (NZD)

50GB : $1.69

200GB : $4.99

2TB : $16.99

6TB : $49.99

12TB : $99.99

Philippines (PHP)

200GB : ₱149

6TB : ₱1490

12TB : ₱2990

Republic of Korea (KRW)

50GB : ₩1100

200GB : ₩3300

2TB : ₩11100

6TB : ₩44000

12TB : ₩88000

Singapore (SGD)

50GB : S$ 1.48

200GB : S$ 3.98

2TB : S$ 13.98

6TB : S$ 42.98

12TB : S$ 84.98

Taiwan 3 (TWD)

50GB : NT$ 30

200GB : NT$ 90

2TB : NT$ 300

6TB : NT$ 900

12TB : NT$ 1790

Tajikistan (USD)

Thailand (THB)

200GB : ฿99

12TB : ฿1990

Uzbekistan (USD)

Vietnam (VND)

50GB : ₫19000

200GB : ₫69000

2TB : ₫249000

6TB : ₫749000

12TB : ₫1499000

1. For countries and regions where the local currency isn't supported, such as Argentina, storage upgrades are billed in U.S. dollars (USD). Learn more about countries and regions that bill in U.S. dollars (USD).

2. iCloud+ upgrades for Albania, Armenia, Belarus, and Iceland are charged in U.S. dollars (USD), with prices slightly higher due to the Value Added Tax (VAT).

3. Taxes are included in all prices for these countries and regions: Albania, Armenia, Australia, Austria, Belarus, Belgium, Bulgaria, China mainland, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, India, Ireland, Italy, Japan, Republic of Korea, Latvia, Lithuania, Luxembourg, Malta, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Russia, Saudi Arabia, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Taiwan, Türkiye, the United Arab Emirates, and the United Kingdom.

4. Residents in some U.S. states have tax added to the monthly payment due to state laws.

Accepted payment methods for iCloud+ upgrades include credit cards, debit cards, and your Apple Account balance . If you don't have enough available funds in your Apple Account balance to complete your upgrade, you'll be charged the remaining amount. Apple Store gift cards aren't accepted as payment for upgrading iCloud+. Learn how to manage the amount of storage you're using .

Learn how iCloud operates in China mainland .

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New York Takes Crucial Step Toward Making Congestion Pricing a Reality

The board of the Metropolitan Transportation Authority voted to approve a new $15 toll to drive into Manhattan. The plan still faces challenges from six lawsuits before it can begin in June.

By Winnie Hu and Ana Ley

New York City completed a crucial final step on Wednesday in a decades-long effort to become the first American city to roll out a comprehensive congestion pricing program, one that aims to push motorists out of their cars and onto mass transit by charging new tolls to drive into Midtown and Lower Manhattan.

The program could start as early as mid-June after the board of the Metropolitan Transportation Authority, the state agency that will install and manage the program, voted 11-to-1 to approve the final tolling rates, which will charge most passenger cars $15 a day to enter at 60th Street and below in Manhattan. The program is expected to reduce traffic and raise $1 billion annually for public transit improvements.

It was a historic moment for New York’s leaders and transportation advocates after decades of failed attempts to advance congestion pricing even as other gridlocked cities around the world, including London, Stockholm and Singapore, proved that similar programs could reduce traffic and pollution.

While other American cities have introduced related concepts by establishing toll roads or closing streets to traffic, the plan in New York is unmatched in ambition and scale.

Congestion pricing is expected to reduce the number of vehicles that enter Lower Manhattan by about 17 percent, according to a November study by an advisory committee reporting to the M.T.A. The report also said that the total number of miles driven in 28 counties across the region would be reduced.

“This was the right thing to do,” Janno Lieber, the authority’s chairman and chief executive, said after the vote. “New York has more traffic than any place in the United States, and now we’re doing something about it.”

Congestion pricing has long been a hard sell in New York, where many people commute by car from the boroughs outside of Manhattan and the suburbs, in part because some of them do not have access to public transit.

New York State legislators finally approved congestion pricing in 2019 after Gov. Andrew M. Cuomo helped push it through. A series of recent breakdowns in the city’s subway system had underscored the need for billions of dollars to update its aging infrastructure.

It has taken another five years to reach the starting line. Before the tolling program can begin, it must be reviewed by the Federal Highway Administration, which is expected to approve it.

Congestion pricing also faces legal challenges from six lawsuits that have been brought by elected officials and residents from across the New York region. Opponents have increasingly mobilized against the program in recent months, citing the cost of the tolls and the potential environmental effects from shifting traffic and pollution to other areas as drivers avoid the tolls.

A court hearing is scheduled for April 3 and 4 on a lawsuit brought by the State of New Jersey, which is seen as the most serious legal challenge. The mayor of Fort Lee, N.J., Mark J. Sokolich, has filed a related lawsuit.

Four more lawsuits have been brought in New York: by Ed Day, the Rockland County executive; by Vito Fossella, the Staten Island borough president, and the United Federation of Teachers; and by two separate groups of city residents.

Amid the litigation, M.T.A. officials have suspended some capital construction projects that were to be paid for by the program, and they said at a committee meeting on Monday that crucial work to modernize subway signals on the A and C lines had been delayed.

Nearly all the toll readers have been installed, and will automatically charge drivers for entering the designated congestion zone at 60th Street or below. There is no toll for leaving the zone or driving around in it. Through traffic on Franklin D. Roosevelt Drive and the West Side Highway will not be tolled.

Under the final tolling structure, which was based on recommendations by the advisory panel, most passenger vehicles will be charged $15 a day from 5 a.m. to 9 p.m. on weekdays, and from 9 a.m. to 9 p.m. on weekends. The toll will be $24 for small trucks and charter buses, and will rise to $36 for large trucks and tour buses. It will be $7.50 for motorcycles.

Those tolls will be discounted by 75 percent at night, dropping the cost for a passenger vehicle to $3.75.

Fares will go up by $1.25 for taxis and black car services, and by $2.50 for Uber and Lyft. Passengers will be responsible for paying the new fees, and they will be added to every ride that begins, ends or occurs within the congestion zone. There will be no nighttime discounts. (The new fees come on top of an existing congestion surcharge that was imposed on for-hire vehicles in 2019.)

The tolls will mostly be collected using the E-ZPass system. Electronic detection points have been placed at entrances and exits to the tolling zone. Drivers who do not use an E-ZPass will pay significantly higher fees — for instance, $22.50 instead of $15 during peak hours for passenger vehicles.

Emergency vehicles like fire trucks, ambulances and police cars, as well as vehicles carrying people with disabilities, were exempted from the new tolls under the state’s congestion pricing legislation .

As for discounts, low-income drivers who make less than $50,000 annually can apply to receive half off the daytime toll after their first 10 trips in a calendar month. In addition, low-income residents of the congestion zone who make less than $60,000 a year can apply for a state tax credit.

All drivers entering the zone directly from four tolled tunnels — the Lincoln, Holland, Hugh L. Carey and Queens-Midtown — will receive a “crossing credit” that will be applied against the daytime toll. The credit will be $5 round-trip for passenger vehicles, $12 for small trucks and intercity and charter buses, $20 for large trucks and tour buses, and $2.50 for motorcycles. No credits will be offered at night.

Grace Ashford contributed reporting.

Winnie Hu is a Times reporter covering the people and neighborhoods of New York City. More about Winnie Hu

Ana Ley is a Times reporter covering New York City’s mass transit system and the millions of passengers who use it. More about Ana Ley

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You can now get Ozempic at Costco — but don't expect big savings

• Costco is now selling the weight loss drug Ozempic through a partnership with health startup Sesame.
• Members can pay $179 for a prescription and appointment as part of a three-month package.
• Still, that doesn't cover the cost of the GLP-1 drug, which has gained popularity but can be costly.

Silver bullion and sushi aren't the only new additions to Costco's product selection this year. Now, you can get a prescription for the weight loss drug Ozempic through the retailer, too.

Costco has started offering the prescriptions through a partnership with healthcare startup Sesame, CNN reported on Tuesday. For $179, members can get a prescription for the GLP-1 weight loss drug plus a meeting with a doctor or specialist. Members who get the drug are also able to message a doctor with questions or issues as they continue to use Ozempic.

One thing the program — which lasts three months and is renewable — does not include is the actual cost of Ozempic, which can run up to $1,600 a month without insurance, CNN reported. Getting insurance to cover the drugs is still tough for non-diabetic users, and some employers are worried that the costs could strain their finances.

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Costco did not immediately respond to requests for comment from Business Insider. Sesame Chief Marketing Officer Michael DiLorenzo told BI that the company has seen the number of participants in the startup's weight loss service increase by 50 times since it unveiled the option with Costco on Tuesday.

DiLorenzo said that Sesame is "focused on making sure that the products we have in-market now with Costco — weight loss, primary care, and mental health — are delivering the exceptional experience and results that Costco Members expect of everything they get from Costco."

Ozempic, Wegovy, and other GLP-1 drugs have gained popularity among people trying to lose weight over the last few years. First intended as a treatment for type 2 diabetes, the drug uses semaglutide, an ingredient that can moderate blood sugar. It can also reduce appetite, which is why it has gained traction for non-diabetic patients trying to shed pounds.

Sales of the drugs have been so great that they likely helped Denmark avoid a recession since the country is home to Ozempic- and Wegovy-maker Novo Nordisk.

Costco started working with Sesame last fall to offer basic health services, such as virtual check-ups. GLP-1 drugs weren't initially part of the partnership, according to Sesame cofounder and president Michael Botta.

But approximately one in five requests that Sesame got through the Costco program was about weight loss, so Sesame developed the offering to cater to those customers.

"We realized pretty quickly, just by looking at what people were curious about, that there was a clear unmet need here," he told CNN.

Watch: Ozempic explained: how a miracle diabetes drug became the center of a weight loss craze

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