Business Start Up Costs

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How much money do you need to start your business?



Do you need $100, $500, $1000, or more, to start your own business? You will be able to figure this out for your personal situation by the end of this article.

If you are thinking of starting a business, you are probably wondering: “How much money do I need to save to start my new business idea?” The amount you need to start your business will depend on a several different factors. We will teach you how to calculate your business start up costs so that you will be able to save up to start & fund your idea. You may have a vague idea of how much your business idea will cost, or no idea at all. Either way, it’s good to have a realistic estimate of your business start up costs so that you are able to execute your idea without being broke and unable to run your business.

Once you have your business idea, it’s time to figure out your start up costs. You want to keep a record of this using a pen and paper, an excel sheet, a printable sheet, or even the notes section of your phone. You can also use this method to see compare different business models and which business model works best for your situation. We will go through the process of figuring out business start up costs for 2 different sample businesses:

Shop 1: PRINT-ON-DEMAND STICKERS.

Shop 2: 925 STERLING SILVER RINGS.


Think about and research your options for all the items needed to start your business. If you already have some of the items you will need (phone, computer, printer, wifi, office supplies, vehicle, etc.), you can save that cost for other items. Here are some questions you should ask yourself when thinking about what you need for your business:

-> Do I need a physical location, or a PO Box to use as a mailing address?

-> What system/software will I use to stay organized, and for finances?

-> Will I need to hire someone to create a logo, or for other services?

-> How much time to I need to put into running my business?

-> How much will I need to reinvest into my business for it to grow?

-> When will I need to upgrade my equipment?


Let’s start with administration costs, such as business licenses. Research how much it costs to get a business license to run your specific business in your city. In our examples, we will need need to register our business name and get a business license:

Shop 1: PRINT-ON-DEMAND STICKERS.

$100 – Business License (yearly cost)

$100 – Business Name Registration (one time cost)


Shop 2: 925 STERLING SILVER RINGS.

$100 – Business License (yearly cost)

$100 – Business Name Registration (one time cost)



Next, we need to think of any equipment we need to purchase to make our business possible, if any.

In sample Shop 1: PRINT-ON-DEMAND STICKERS – We will need need to pay for a design software to design our stickers. We won’t need to pay for any shipping since the stickers will automatically be shipped from the manufacturer to the customers.

In sample Shop 2: 925 STERLING SILVER RINGS – We will need to pay for inventory, as well as shipping costs and shipping materials since we will be shipping everything to the customers. We will plan to start off with small quantities of 5 ring styles, total 50 rings. Once we start selling those 50 rings, we will use the profit from those sales to buy more inventory and slowly expand our ring selection. We also want to include business cards for customers to provide an incentive or write a personalized note.

Shop 1: PRINT-ON-DEMAND STICKERS.

$100 – Business License (yearly cost)

$100 – Business Name Registration (one time cost)

$100 – Design Software (yearly cost)


Shop 2: 925 STERLING SILVER RINGS.

$100 – Business License (yearly cost)

$100 – Business Name Registration (one time cost)

$1500 – 50 Sterling Silver Rings, 10 of each style

$35 – 50 Velvet Ring Pouches

$500 – Tracked Shipping Cost for 50 rings

$25 – Custom Business Cards


Finally, we need to add the website/marketplace costs. If you create your own website with a custom domain, you will have to research that cost based on the service you choose to use. If you decide to use sell via a marketplace like Etsy, you will have to factor in those fees into your start up costs, if any. We will not be paying for any advertising. Instead, we will use social media platforms like Instagram to promote our products.

In sample Shop 1: PRINT-ON-DEMAND STICKERS – We will be using Redbubble, which won’t have any up front costs. We want to buy some samples of our stickers to use in our marketing so we have to include this cost in our start up costs.

In sample Shop 2: 925 STERLING SILVER RINGS – We will be using Etsy, which has a low cost and should be covered with our first sale. Just in case, we will add a small budget for these listing costs.

Shop 1: PRINT-ON-DEMAND STICKERS.

$100 – Business License (yearly cost)

$100 – Business Name Registration (one time cost)

$100 – Design Software (yearly cost)

$50 – Product Samples for Marketing


Shop 2: 925 STERLING SILVER RINGS.

$100 – Business License (yearly cost)

$100 – Business Name Registration (one time cost)

$1500 – 50 Sterling Silver Rings, 10 of each style

$35 – 50 Velvet Ring Pouches

$500 – Tracked Shipping Cost for 50 rings

$25 – Custom Business Cards

$10 – Etsy Listing Fees


Once you’ve made a list of everything you will need to purchase to bring your business to life, it’s time to use a calculator and add up everything to get your total start up cost. Now let’s calculate the total start up costs for each sample shop.

Shop 1: PRINT-ON-DEMAND STICKERS.

   $100 – Business License (yearly cost)

+ $100 – Business Name Registration (one time cost)

+ $100 – Design Software (yearly cost)

+ $50 – Product Samples for Marketing

————–

= $350 – Total Start Up Cost



Shop 2: 925 STERLING SILVER RINGS.

   $100 – Business License (yearly cost)

+ $100 – Business Name Registration (one time cost)

+ $1500 – 50 Sterling Silver Rings, 10 of each style

+ $35 – 50 Velvet Ring Pouches

+ $500 – Tracked Shipping Cost for 50 rings

+  $25 – Custom Business Cards

+ $10 – Etsy Listing Fees

————–

= $2270 – Total Start Up Cost


In sample Shop 1: PRINT-ON-DEMAND STICKERS – We will need $350 up front to start this business idea.

In sample Shop 2: 925 STERLING SILVER RINGS – We will need $2270 up front to start this business idea.

Now that you know how much money you need to start your business, you can start saving for it. Soon, you’ll be able to make your business a reality. You’ve got this!