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How Much Does it Cost to Start Up a Business?

Most people have imagined what it would be like to be their own boss and some take it a step further by starting their own business. It’s considered a great Australian dream but starting a business can be an overwhelming prospect. It requires a lot of time, money, dedication and a great idea to succeed.

No matter the size of the business you are planning to build, you will have to source a significant amount of money. The type of business may also affect the amount required to start up. The best way to calculate your expenses is to divide them up into categories and keep an accurate record of every cost needed to begin building your business. This will also come in handy if you apply for a loan or grant (from the bank or government). Here are some basic categories you should include when putting together a start-up fund sheet and expenses to consider for specific business types.

Funding Sources

The sources of funding available must be listed. This includes money you have supplied, investor money, bank loans or a line of credit. Doing so will allow you to see how much money you actually have access to, and you will be able to compare this amount to how much you need to spend.

Fixed Costs

Fixed costs are one-off costs required to get your business up and running. Purchasing or leasing space, assets and inventory, organising any legalities and marketing efforts are all examples of initial start-up costs. The two most important fixed costs, however, are working capital and a contingency fund. Working capital is money to fund business operations as you grow, or whilst waiting for payment. A contingency fund is a “back up” or “emergency” fund for any surprise bills or unforeseen circumstances.

Monthly Costs

To have a clear idea of how much money you need to fund your business, you need to estimate your monthly costs alongside how long you believe it will take for your business to become profitable.

These types of costs are applied across the board no matter what type of business you run. However, you may have to include costs that are exclusive to your type of business and these expenses often add up faster than expected.


Restaurants can be expensive, as they require specific equipment and facilities such as commercial kitchens, restrooms, cutlery, tables, chairs and so on. There is also cleaning, menu development, supplies, staff salaries and menu development to consider.


Like a restaurant, opening a retail store can be expensive due to the cost of the property, customisation of the space, inventory, staff and so forth. Even small things like coat hangers can add up!

Home Business

When you work from home, you’re sure to have fewer expenses because many of the essentials are already taken care of – you have a space to work, furniture, Internet and other utilities already. This cancels out a lot of costs, including travel expenses.

Web Business

Some of the costs associated with starting a web business include website development, hosting, SEO and extra Internet allowance.

All of these expenses should be included in your start-up fund sheet.  Make it up yourself or find a template on the Internet to get started. Not only will it help you organise your own affairs, but it will also be useful if you ever need to present a business plan or apply for a loan or grant. When starting a business it is definitely worthwhile to have extra rather than “just enough”, so use your finished sheet to see where you can save, where you absolutely need to spend and how you can establish more funds.

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