Startup costs that small businesses should expect

Posted in Business and entrepreneurship.

One of the most important things that needs effective management for small businesses that are starting up is expenses. You do not want to get yourself into a situation where your books go in the red right at the beginning of your business. If you know what to expect, you can plan accordingly and make sure you stay afloat during the tough times that businesses face in the beginning. Here are a few expenses that most new and small businesses should expect to meet.

Market Research

Before stepping into any market, it is critical for every business to know what to expect. The formal term for that is market research which you must perform to make sure your strategy is targeting the right areas that would bring you revenue. This can lead to a range of different costs, both small and large, the biggest one being the experts you hire to provide you with the research of course. How much you spend is entirely based on your budget and proper planning of the same.

Office Equipment

One may argue that they are working out of their basement and they do not need any equipment whatsoever. However, having dedicated resources is necessary and any prudent business owner would include every piece of equipment they are using as an expense. Of course, if you are moving into a professional working space then everything you get is an expense. This can include things like furniture, computers, and even things like kitchen equipment.

Office Lease

The most common practice for small businesses is to lease any space that they are planning to operate out of. This is usually in a business district of the city and the cost can be quite significant. This point may also be tied to the previous one if you are moving into an unfurnished space where you will need to provide all the office equipment. Your office needs to look welcoming and professional before you can let clients walk in and that can be a major expense for most small businesses.


For any business to attract customers, it must first spread the word about what they do. This is what advertising is all about and it is no small expense. Sure, social media has allowed businesses to drop their marketing expenses significantly while still reaching the masses but making a more focused and thorough effort is necessary in the beginning and that can cost quite a bit. However, you must be smart about what avenues you choose to make sure you reach the right audience.

Consultants & Contractors

For a lot of small businesses, the team usually comprises of people who only specialise in providing the services that the business is created for. This means there may be a lack of expertise in other key areas like accounting, administration, legal, etc. it may be very tempting to try and do it all by yourself to save costs but that can backfire quite easily. Therefore, having some money set aside to hire consultants and contractors is also quite prudent.