Small Business Grants logo Everything To Know About
Small Business Grants and More

Home About Us Find/ Apply For Grants News/Blog Resources What To Know

Startup Costs Every Entrepreneur Should Know

Startup Costs Every Entrepreneur Should Know

Starting a new business is an exciting prospect for any individual. For many, it’s the start of a new and more prosperous way of life. However, not many people know what starting a business actually costs. As a result, they’re caught unaware by the charges. There are a few different startup costs every entrepreneur should know and prepare for. With these expectations, owners will be better prepared to ride out the often bumpy first year or two of their new business.

Entity Setup Costs

One of the first charges a new business faces is registration. Depending on the size of the entity being registered, prices will vary. For the most part, these costs are a result of the labor that goes into properly filing paperwork. As such, they tend to be reasonable. There’s usually a filing fee which tends to be under 300 dollars and differs from state to state. Other than this, the new business likely will need to set aside a startup fund to open a business bank account.

Again, this value will depend heavily on location, local rules, and ultimately what’s manageable and best for each business. Besides this, there are other (potentially small) fees associated with another filing—such as grand opening announcements, acquiring a tax ID, or paying for a website or eCommerce platform to be built and run.

Overhead and Maintenance

The next startup cost every entrepreneur should know is day-to-day and month-to-month upkeep. This is especially important for businesses paying rent or property taxes. Few people realize rented space comes at a premium. It can be a frightening number depending on the accessibility of the building, location in a town, and what state it’s in. The monthly upkeep of a building can soar into thousands of dollars, which many new businesses simply can’t afford right way.

Other than rent, every building needs care. This can include a slew of regulatory updates which often includes physical repair to the inside and outside of the building. There’s also upkeep of lots, fire lanes, and utility bills. Even a business run out of a home should calculate the regular maintenance costs of living to better understand the numbers the business must exceed to run a profit.

Deductible Tax Categories

Luckily, it’s not all fees with new businesses. Certain costs fall into categories that can be deducted from the taxes of a business. However, this information is—as always—dependent on your state. Some common deductible costs include the cost of goods, upkeep costs, salaries, and more. Other specifics include the cost of shipping, fines, gifts, hobbies, and free time. To filter through the confusing tangle of what is and isn’t allowed, every business owner should carefully research their local laws. Besides this, hiring a tax expert is also a great idea since they’re trained to find ways to save business money at the end of each year.

Start Here to See If You Qualify For Business Grants!