Business Startup Costs Checklist: How Much and Where to Spend

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


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.

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Supplies, Furniture, and Office Space

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 and Web Presence


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.
How to Build the BEST INSTAGRAM for your Ecommerce Brand | PART ONE

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.
  • A modified template or developed WordPresssite that still looks sleek and works fine will likely run you in the ballpark of $1000-$3000, depending on the freelancers you hire. The general cost breakdown is as follows:
    •   $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, 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 and Production


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.

How to Price Your Product | Gretta Van Riel’s Shopify Tips


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).

Fees, Taxes, and Licenses

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.

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.

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Having a Backup Fund

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.

Setting Up Your Budget

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:

  1. Make an itemized list of every expense or potential expense associated with your business.
  2. Plan out each item over the quarter as well as the year, as best as you are able.
  3. Set up a system where you can easily and nearly automatically update it each day or week with any new expenses, etc.
  4. 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.
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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. That’s why foundr+ offers unlimited access to world-renowned instructors, proven frameworks, and like-minded communities. Explore how foundr+ can be a guide for every stage of your entrepreneurial journey.

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