Startup Cost Calculator
Estimate how much money you need to start your business — one-time costs plus a 6-month operating runway. Pre-filled by industry and state.
One-time costs
LLC formation fee
California LLC filing fee
Website + branding
Laptop + equipment
Legal templates + contracts
Year-one government costs
California annual / franchise fee
$800 minimum franchise tax
Monthly operating costs
Professional liability insurance
Software (CRM, accounting, scheduling)
Marketing (ads, LinkedIn, content)
Owner pay
Total cash needed to launch
$39,630
6 months of runway included
Recommended cash reserve
$45,340
Total + 1 month buffer for unexpected costs
Funding sources for new businesses
Most common funding source for new small businesses. No interest, no dilution, full control.
- ~65% of founders self-fund
- No payment obligations
- Best for: low-overhead startups
SBA microloans up to $50K and 7(a) loans up to $5M with government-backed terms.
- Microloan rates: 8-13%
- 7(a) rates: ~10.75-13.25%
- Best for: established credit, collateral
Informal loans or equity from people who know and trust you. Always document terms in writing.
- Flexible terms
- Lower or zero interest
- Best for: pre-revenue stage
Frequently Asked Questions
How to estimate your startup costs
Accurate startup cost estimates separate businesses that survive the first two years from those that don't. According to the U.S. Bureau of Labor Statistics, roughly 20% of new businesses fail in year one and 50% by year five, and underestimating startup capital is one of the top three causes. The fix is a disciplined budget that distinguishes between one-time and recurring expenses, projects far enough into the future to survive the ramp-up period, and includes a contingency buffer.
One-time costs are paid once to launch the business: LLC formation fees, equipment purchases, initial inventory, leasehold improvements, branding, website development, lease deposits, and licensing. These are typically the largest single line items but also the most predictable — you can get firm quotes upfront. Recurring operating costsare paid monthly to keep the business running: rent, payroll, software subscriptions, insurance, inventory replenishment, marketing spend, and your owner draw. These compound quickly — a $15,000 monthly burn becomes $90,000 over a 6-month ramp.
Use this 4-step process to build your estimate:
- List every line item. Walk through a typical month of running the business. Don't skip small costs like bank fees, software subscriptions, professional memberships, or business cards — they add up to thousands per year.
- Research realistic prices for your industry and location. Get three quotes for major purchases. Check Glassdoor for salary benchmarks in your city. Call commercial real estate brokers for rent comps. Use this calculator's industry presets as starting points, then adjust.
- Project 6-12 months of operating costs. Six months is the industry minimum — most new businesses don't hit break-even revenue until month 6-18. Restaurants, retail, and seasonal businesses should plan for 12 months.
- Add a 20% contingency. Permits cost more than expected. Equipment breaks. Launch dates slip. A 20% buffer on top of your total estimate covers the unknowns that always materialize.
Average startup costs by industry
Startup capital requirements vary by an order of magnitude across industries. A solo consultancy can launch for under $5,000. A restaurant typically needs $275,000+once you account for buildout, equipment, and 6 months of operating cash. Understanding where your business fits helps you set realistic fundraising goals and avoid undercapitalization — the #1 cause of small business failure.
| Industry | Typical one-time | Typical monthly | 6-month total |
|---|---|---|---|
| Consulting / Freelance | $4,500 | $5,710 | $38,760 |
| Marketing / Creative Agency | $8,000 | $10,850 | $73,100 |
| SaaS / Software | $32,500 | $9,900 | $91,900 |
| E-commerce / Online Store | $14,700 | $7,450 | $59,400 |
| Food Truck | $64,000 | $9,650 | $121,900 |
| Trades (Plumbing / HVAC / etc.) | $52,500 | $11,150 | $119,400 |
| Brick-and-Mortar Retail | $92,500 | $23,300 | $232,300 |
| Restaurant / Cafe | $160,000 | $41,500 | $409,000 |
Three factors drive the spread: physical footprint (a restaurant needs a kitchen; a consultancy needs a laptop), inventory or COGS intensity (e-commerce and retail tie up capital in stock; SaaS doesn't), and regulatory burden(food service, healthcare, and trades require expensive licenses, bonds, and insurance). Service businesses with low overhead win on capital efficiency. Physical businesses win on long-term defensibility — once a restaurant is built out and profitable, it's hard to displace.
Owner pay is often the largest single line item and the most commonly forgotten. Plan to pay yourself a livable salary from month one, even if you defer it to a separate account. Founders who skip owner pay run out of personal savings and are forced to liquidate the business under pressure.
LLC formation costs by state
LLC formation fees vary from $35 in Montana to $500 in Massachusetts, but the bigger difference is in year-one ongoing costs. California charges an $800 annual franchise tax regardless of revenue. New York requires a publication notice that can cost $425-$1,500 depending on county. Tennessee charges $300 minimum with $50 per additional member. The right state for your LLC depends on where you operate, not just where fees are lowest.
| State | Formation fee | Annual / first-year fee | Notes |
|---|---|---|---|
| Alabama | $200 | $50 | — |
| Alaska | $250 | $100 | Biennial report |
| Arizona | $50 | $0 | — |
| Arkansas | $45 | $150 | — |
| California | $70 | $800 | $800 minimum franchise tax |
| Colorado | $50 | $10 | — |
| Connecticut | $120 | $80 | — |
| Delaware | $110 | $300 | $300 annual franchise tax |
| Florida | $125 | $138.75 | — |
| Georgia | $100 | $50 | — |
| Hawaii | $50 | $15 | — |
| Idaho | $100 | $0 | — |
| Illinois | $150 | $75 | — |
| Indiana | $95 | $31 | Biennial report |
| Iowa | $50 | $30 | Biennial report |
| Kansas | $160 | $50 | — |
| Kentucky | $40 | $15 | — |
| Louisiana | $100 | $35 | — |
| Maine | $175 | $85 | — |
| Maryland | $100 | $300 | — |
| Massachusetts | $500 | $500 | — |
| Michigan | $50 | $25 | — |
| Minnesota | $155 | $0 | — |
| Mississippi | $50 | $25 | — |
| Missouri | $50 | $0 | — |
| Montana | $35 | $20 | — |
| Nebraska | $100 | $13 | — |
| Nevada | $75 | $350 | — |
| New Hampshire | $100 | $100 | — |
| New Jersey | $125 | $75 | — |
| New Mexico | $50 | $0 | — |
| New York | $200 | $9 | Plus publication requirement ~$425-$1,500 |
| North Carolina | $125 | $200 | — |
| North Dakota | $135 | $50 | — |
| Ohio | $99 | $0 | — |
| Oklahoma | $100 | $25 | — |
| Oregon | $100 | $100 | — |
| Pennsylvania | $125 | $7 | — |
| Rhode Island | $150 | $50 | — |
| South Carolina | $110 | $0 | — |
| South Dakota | $150 | $50 | — |
| Tennessee | $300 | $300 | $50 per member, min $300 |
| Texas | $300 | $0 | No annual report fee under $1.23M revenue |
| Utah | $59 | $18 | — |
| Vermont | $125 | $35 | — |
| Virginia | $100 | $50 | — |
| Washington | $200 | $60 | — |
| West Virginia | $100 | $25 | — |
| Wisconsin | $130 | $25 | — |
| Wyoming | $100 | $60 | — |
Highest-cost outliers: California ($800 minimum franchise tax every year, regardless of revenue), Massachusetts ($500 formation + $500 annual report), Tennessee ($300 minimum, $50/member), Delaware ($300 annual franchise tax for LLCs), Maryland ($300 annual report).
No annual fee states: Arizona, Idaho, Minnesota, Missouri, New Mexico, Ohio, South Carolina, Texas (for businesses under $1.23M revenue). These states are popular for low-overhead solo LLCs — but only if you actually operate there. Forming a Wyoming or Delaware LLC while operating in California means paying bothWyoming fees AND California's $800 minimum franchise tax (because California treats you as a foreign LLC doing business in-state).
New York's publication trap: New York requires new LLCs to publish notice of formation in two newspapers for six weeks, plus file a Certificate of Publication. In Manhattan, this can cost $1,500+. In rural counties, it can be $300. Always budget for publication if forming in NY.
For most small business owners, the rule is simple: form your LLC in the state where you operate. Out-of-state formation only makes sense for specific situations (real estate holding LLCs, businesses with no physical presence, certain tax planning structures). See our full guide to the best state to form an LLC for decision frameworks and edge cases.