According to research, only 75% of small businesses survive their first year, particularly because they did not have an effective budget, and they ran out of finances. Other reasons for failed startups are because of a poor business plan or did not have a marketing plan.
If you are creating a business, you have probably considered the thought, “how much does it cost to start a business?”. The answer is both complex and simple because it depends on what type of business you have and your growth plans.
So the problem is, how much does it cost to start a business, and how can you properly prepare yourself for success, without running out of funds?
Thankfully, we’ve created this article to teach you everything you need to know about business funding so that you can focus on growing your business without financial stress. Keep on reading to learn more!
How Much Does It Cost to Start a Business?
According to the Small Business Administration, most small businesses used less than $25,000 in their initial startup costs, while many other businesses used even less.
However, if you have a tech-startup, sometimes those costs can get even higher, as you need to account for a larger office and invest in the right people to help create the technology.
Think About Your Overhead
When many people think about their startups, they forget some important details like how much the overhead will be for their business. This is also why many new startups have decided to hire a virtual team, to save money on the brick and mortar location for their startup.
Some of these hidden costs include:
- Office space
- Office equipment
- Building maintenance
- Health care costs
If you desire to still have your startup in a physical location, you may want to consider moving your office into a shared coworking space to reduce some of the overhead costs.
Keep a Growth Mindset
While launching a business, you may get stuck focusing on the here and the now to get your business up and running. While this is important, it is crucial to also consider the future growth of your business.
This may mean that you need to spend a bit more in the meantime to accelerate your future growth plans, which includes costs like marketing, coaching, etc.
Keep Your Options Open
Acquiring the finances can feel overwhelming from the start, which may mean that you need to get out a business loan to feel the financial security you desire.
Check out Small Business Loans 2021: Compare Financing Options | Nav to learn more about the different options for business financing and small business loans.
Learn More About Business Financing
Now that your question about how much does it cost to start a business is answered, it is time to get busy!
The more time you spend on developing your business from the start gives you more chances for success in the future.
To learn more about the cost to start a business, check out the business and marketing section of our website.