Every industry is different, but no matter what business you’re starting—a coffee shop, a marketing agency or a record label—there are initial costs that need to be accounted for. The average start-up costs around $30,000.
Keep reading to learn the true cost of starting a business and what you need to be successful.
Below are different factors that comprise the cost of starting a business:
No matter the industry, every business requires upfront fees for insurance, licensing and permits. Many of these costs are industry-specific. For example, if you’re opening a restaurant, you need to pay for a health inspector.
When starting your own business, be prepared for the following expenses:
If you’re selling a product such as handmade goods, exercise equipment or handbags, you have to be willing to pay for the equipment and material that goes into producing the product. You will also be responsible for the monthly warehouse costs and property lease(s).
Additionally, you might have to manage an office or workspace that includes the following:
Most businesses have a website, which has the potential to cost thousands of dollars, especially if the domain name is expensive. Keep in mind costs for information systems, software and payroll services and industry-specific websites.
Another day-to-day cost for businesses includes Wi-Fi, servers and security monitoring.
Depending on the size of your company and marketing campaign, your sales and marketing expenses will vary. In your business plan, you should outline your marketing strategy and determine whether you’re going to sell online, in-person, by word-of mouth or at industry events. The average cost of a new business’ marketing budget is 9–12% of the annual budget. For smaller businesses, it might be as little as 2%.
It’s up to you to decide if you want to put your time and money toward advertisements, email blasts, trade shows, campaigns and so forth. Decide how much money you’re willing to put toward marketing for the sake of gaining new business.
People may not realize that hiring new employees can be costly. You have to consider salaries, hourly costs and hidden costs that often go unnoticed. These include:
Now that you know the cost of starting a business, start saving money today. Like saving for a house or retirement, creating a budget for your business is essential. Synchrony Bank can help you put your financial decisions into action so you can begin saving for your business.
Call 844-345-5789 or open an account today to learn more about our offerings and how we can prepare you for starting a business.
U.S. Small Business Administration: https://www.sba.gov/blogs/how-estimate-cost-starting-business-scratch
Automatic Data Processing: https://www.adp.com/thrive/articles/the-costs-of-training-new-employees-including-hidden-expenses-3-157.aspx
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