How much money do you need to start your business?
Opening a small business can be pricey, but knowing what to expect lets you move forward with confidence. Calculating your startup costs can help you understand your financing needs and estimate when you’ll begin to turn a profit. If you’re already in business, you can use this calculator to help make sure your finances are on track.
Visit the Knowledge Center for more information about starting a small business, including how to calculate your startup costs in five easy steps.
A one-time expense is an item that you only need to buy once in order to get your business off the ground, like essential equipment or signage. It also includes one-time charges, like a security deposit or website domain fee.
List your one-time expenses and their associated costs in the table above. If you don’t know the exact cost, take your best guess.
Hit the “Next” button when you’re finished.
A recurring expense is an item, service or charge that repeats on a regular basis. It could include things like rent and utilities, software subscriptions, insurance, raw materials or employee wages. These expenses can vary from month to month, but tend to fall within a predictable range.
List your recurring expenses in the table above. Multiply the cost of each item or charge by the number of months you expect to go without making any revenue, and add your results to the “Cost” column. For example, if your rent is $1,000 a month and you expect to rent your space for three months before opening, you’d enter $3,000 for the cost of rent.
Hit the “Next” button when you’re finished.
Enter the cash value of any capital that you’re bringing to your business. This number will be subtracted from your total costs to give you a more accurate picture of how much money you need to raise or borrow.
For example, if you’re turning a home micro-bakery into a brick-and-mortar shop, include how much cash you’re reinvesting, plus the approximate cash value of equipment that you plan to trade in.
Hit the “Submit” button to view your results.
Your results show your total startup costs, or how much money you’ll need to raise or borrow in order to get your business off the ground. You can use this information in your business plan, when speaking with investors or when applying for a loan.
Are your results different than you expected? Go back into the tool to see where you could cut costs or spend extra budget.