How much does it cost to set up a business?

The cost to start a business is rarely a single number. It depends heavily on what you are selling, where you are operating, and whether you are launching online or from a physical storefront.

Most micro-businesses and online startups can launch for under $3,000, while brick-and-mortar operations or inventory-heavy businesses frequently require $25,000 to $100,000+.

To make sense of the costs, it helps to split them into two buckets: one-time setup fees and ongoing monthly expenses.

1. One-Time Setup Costs

These are the expenses you incur just to legally exist and get your initial infrastructure in place.

• Legal Formation ($100 – $1,000+): Filing as an LLC or Corporation varies by state or country. Standard state filing fees in the US usually run between $50 and $500. If you hire an attorney to draft custom operating agreements, expect to add $500 to $1,500.
• Branding & Website ($100 – $3,000): A basic domain name costs about $10–$15 a year. Building a website yourself on a platform like Shopify, Squarespace, or WordPress will cost very little upfront. Hiring a professional designer for custom branding and web development jumps the cost into the thousands.
• Licenses and Permits ($50 – $500): Depending on your industry (like food service, retail, or professional consulting), you may need local city business licenses, health department permits, or signage permits.

2. Ongoing Operating Costs (First 6 Months)

A common trap for new founders is spending all their capital on the launch, leaving nothing to keep the lights on before sales pick up. You should aim to secure at least six months of working capital.

• Software & Subscriptions ($50 – $300/month): This includes business email (like Google Workspace), accounting software (QuickBooks/Xero), and e-commerce platforms.
• Inventory or Raw Materials ($500 – $10,000+): If you are selling physical goods, you need your opening stock.
• Insurance ($50 – $200/month): General liability insurance is highly recommended for almost every business to protect against lawsuits or damages.
• Marketing ($100 – $1,000+/month): Digital ads, print materials, or software for email marketing.

Estimating by Business Type