Startup Cost: How Much Does It Take to Start a Business?
Starting your own small business is an exciting time full of potential! You’re finally taking the leap and going for it! With all the excitement that comes along with starting your own business, there’s a lot of specifics you have to plan, like how much does it take to start?
When starting your business, it’s a good rule of thumb to have six months’ worth of expenses upfront. Many startups don’t turn a profit through their beginnings, so having six months’ saved will give you a cushion and allow you to start with minimal stress. That being said, let’s go over some startup costs you might not be aware of:
Incorporation Fees:
The first step is to register your business. You need to choose a business entity which has include tax, legal, and financial implications. Filing fees vary per state, so be sure to do some research into your state’s regulations.
Payroll:
Taking on employees will cost more than just their salary. It costs 1.25x to 1.4x their salary per employee. Payroll includes net pay, bonuses, commission, overtime pay, and paid time off. Some of these might not be applicable to your business, but they are things to consider when taking on a new employee. An alternative to taking on a salaried employee is to use 1099 contractors until your business is at that capacity.
Marketing:
Marketing is a huge part of a startup that isn’t always considered. To generate buzz and revenue, your business has to be seen and heard of. You’ll need a website, which will include an initial build and a hosting fee either annually or monthly, and a social media presence. Social media presence is not absolutely necessary, but more and more people are using social media to verify and scrutinize businesses.
Insurance:
There are many things that you’ll need to protect as you begin your startup. You’ll want to look into business insurance, health insurance, liability insurance, property insurance, and others. If you need help figuring out which insurances you need for your start up, let us know!
This is only the start of the things you need to think through when starting your own business. Don’t worry or feel overwhelmed, we’re here to help. If you need some guidance or have any questions, let’s talk!
