5 Business Startup Costs to Build Into Your Budget

  • Published Dec 01, 2020

Starting an independently owned business is difficult, even if you go in prepared. As a general rule, the costs associated with starting a business are going to be higher than you anticipate (otherwise everyone would do it!), so one of the best ways to overcome that challenge is by ensuring that you budget appropriately for all the common necessities that can eat away at your financial runway.

With that in mind, let’s take a look at five of the key costs associated with starting your own business so you can continue to be equipped to turn your passion into a profit.


This is probably the area where you can expect to see the greatest amount of cost variance. Obviously, if you’re looking at a full physical premises right off the bat, you should expect a higher cost. Depending on the location and the size needs of your business, this number could get very high, very quickly.

For example, a gym is likely to have a much higher rent cost than a retail space, which in turn will probably be higher than a lot of office environments. However, especially when starting out, there are plenty of ways to cut costs: sharing space, utilizing outdoor environments, or even just getting lucky with a good deal can save you lots of money until the business has grown and stabilized.

With many businesses transitioning toward remote work, there’s no need to commit the lion’s share of your startup costs to premises — but don’t forget, even working from home or your local cafe is going to have associated costs. After all, someone has to keep the lights on, and it’s always a good idea to tip your baristas.


Not all businesses will have a lot of equipment costs, but for those that will it can add up quickly. Gyms need workout equipment, a bookstore needs shelving, and a cafe is going to need refrigerators and an espresso machine, among other things. Nearly every business is going to need point-of-sale hardware and software as well as the technicians working to install them. Even the bare minimum situation is going to most likely involve a personal computer and home wifi, neither of which is cheap.

Whatever your business is, it’s probably best to budget not only money but time for plenty of extra trips to the hardware store.


In order to avoid burnout and maximize your potential for growth and efficiency, in most cases you are going to want staff sooner than later. Sometimes this might be as simple as outsourcing your work to more people so that you can take on more clients and assignments. In other cases it could be more involved, where payroll specialists, salespeople, and many others are going to come into the picture. Each employee comes with an added cost — training, insurance, certifications — but is often an invaluable part of your business’s success.


Whatever your business is, in order to see it grow, you’ will have to spend money on advertising. Word of mouth is great but can only take you so far, and in order to expand your clientele and your profits, you’ll need to make sure that people are aware of the services you’re providing. Gaining and maintaining a presence online will incur cost, whether it’s sponsored ads on social media, a website, or outside marketing help. Advertising is one area where you truly have to spend money to make money.


One of those things you hope you never need but will always be glad to have, insurance is a non-negotiable cost to make sure you and your business are protected in all situations. If you have staff, you’ll need to make sure you have worker’s’ compensation; if you have physical premises, property insurance is a must; and depending on the nature of your business, there are plenty of other things that might require coverage.

The many costs associated with starting a business can seem overwhelming at first, but there are also plenty of ways to save money. At Cerity, for instance, we offer flexible, right-sized insurance policies specifically tailored to your startup so you can avoid paying for expensive insurance policies with coverage beyond your needs.

Whether you’re looking to purchase a new workers’ comp policy or business owners’ insurance, Cerity makes it easy. Get started by using our free workers’ comp quote tool to get a free online quote in minutes.

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The information provided is intended to provide a general overview. This information is not legal advice and should not be relied on as such. Cerity® makes no warranties for the accuracy, adequacy, or completeness of the information provided, and will not be responsible for any actions taken based on the information contained herein. If you have legal questions or need legal advice, please consult an attorney.