LEGAL GUIDE
Written by Avvo Staff | Nov 2, 2015

How to calculate new business startup costs

One of the first steps to starting a business is to estimate your costs, then compare these costs against your projected earnings. The calculator below will help you estimate the total startup costs for your business, including:

One-time costs are the initial costs needed before you open your business. These are costs for tangible assets like office furniture, equipment, or starting inventory, as well as intangible assets like website design, consultant fees, or any rental or utility deposits.

Monthly costs are commonly referred to as a business's “burn rate”. These costs will inevitably change as your business grows, but a generous estimate is a good place to start. It helps to add an additional 10% to your total that accounts for any other, forgotten costs.

Once you've broken down your total costs, you'll need to estimate how long it will take your business to cover its burn rate and break even. This should be based on your anticipated sales cycle, but calculating costs for the first year will help give you an idea of where to start.

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