Getting started in the world of entrepreneurism is no cake walk. One of the biggest battles you’ll encounter is trying to find answers to the questions you don’t even know to ask.
One question everyone is asking is about the money. How do you estimate your startup business costs?
Getting exact figures is like bailing out the ocean with a bucket. Nobody wants to be wrong, so it all comes out vague. But read on and you’ll get a sense of how to estimate your cost of starting a business.
SHOW ME THE MONEY
Of course, there is some rationale behind not providing dollar amounts: every business is different. An entrepreneur opening up a brick-and-mortar restaurant and shop will have a very different startup budget than a solopreneur selling her services online.
But, you can certainly estimate your costs as the former. The Small Business Administration has a great article on estimating the cost of starting a business from scratch as well as an interactive worksheet to get the ball rolling.
For solopreneurs planning to run an inventory-free, service-based business with a home office, here are the basics:
$$ | Legal Startup
The exact dollar amount is based on the type of organizational structure you settle on, the hourly rate your lawyer charges you, and what your state’s filing fees are. In Colorado, you can file your LLC in less than 10 minutes for only $50.
$$$$ | Branding
From your logo design to business cards to website development, branding costs can add up quickly. While it may be tempting to go with the most economical option, your branding lays the basis for your marketing efforts, so invest in quality! The designers I work with specialize in providing branding packages for under $750 and then website costs can be up to a couple thousand dollars… all to get you to hit the ground running.
$$ | Website Maintenance
Purchasing your domain name registration and hosting to get your website live and start building your online presence is surprisingly inexpensive. Many domain registrars offer your first year registration at a discounted rate of $5 or less, and most hosting of low-traffic websites will run you around $50, unless it’s already provided by your website developer. Though you’ll want to set aside some funds to enlist a website developer to assist with tweaks and technical challenges.
$$ | Back Office Technology
As a solopreneur, you’ll be wearing many hats. And as you develop your sales process, you’ll want to incorporate software, platforms, and other technology that can automate the heavy lifting for you. This might include scheduling software, invoicing software, CRM systems, graphic design program, or digital contracts. This investment will depend on your process, but will run anywhere from $10-99/mo.
$$ | Marketing
This is one category that can be dramatically different between businesses. While you can (and should!) absolutely invest in marketing and advertising efforts early on in your business, there are so many ways to get the word out for free. Utilize your blog, social media, local networking events, and online communities to build your know, like, and trust factor.
THE BIGGEST COST OF ALL
Putting together your startup budget will help you stay on track to start turning a profit as quickly as possible, but it’s not the only cost of starting a business to consider.
Balancing your business around your personal life, discovering when or how you work best, and experiencing the rejection that comes from building a client list are all challenging to manage – especially alone.
Trying to juggle your mental health along with all of the other challenges of starting up and running a business can set you back months, or even years! This is why having an accountability buddy, getting out and networking, and/or working with a business coach are so highly recommended.
Make sure you find your support network, so you always have encouraging and understanding partners to turn to.
Not sure if a business coach is for you? Check out my blog post on the 8 Questions to Ask When Choosing a Business Coach.
Hi, I'm Rachel!
I’ll help you create a life you love living by giving you all the tools, resources and support you need to launch and run your own business.