Most Common Startup Expenses

Startups can be a costly venture. It’s a massive undertaking, from the initial investment to the marketing to the salaries and benefits needed. That’s why we’re going to help you identify the most common startup expenses, so you know exactly where to focus your resources to make the most impact.

New businesses are facing fresh challenges in the post-COVID era. For one thing, entrepreneurs who open their own companies are facing stiffer competition than ever before. Much of it is coming from laid-off or displaced workers whose regular jobs dried up when the pandemic wiped out entire chunks of national economies.

Most Common Startup Expenses In 2021

If you’re putting hard-earned capital on the line to start a business in 2021, what kinds of expense categories will you be looking at, and what are some ballpark figures to have in mind when venturing out into the competitive universe of the startup economy? Here are the most common line items people spend money on when going it alone, as well as some general estimates of dollar amounts for each expense, and a look at where the money comes from.


Congratulations if you can use your home as a central office. However, if that’s not an option, consider renting the smallest office space available for the first year. After that, you’ll have a much better idea about whether you need to scale up or remain in smallish quarters. Ballpark estimates for rent range widely, of course. Expect to spend anywhere from $500 to $900 per month per person.

The space where your business will be located will be one of the biggest startup expenses for you.

Financial Resources: Home Equity Loans

Most entrepreneurs who start small businesses pay their first year’s bills either out of savings or with a loan. Taking out a home equity loan is by far one of the most popular and efficient ways of meeting this financial challenge. So, this will also be included as one of your startup expenses.

For founders who intend to borrow against the built-up equity in their homes, or who just want to learn more about interest rates, tax treatment, and other pertinent issues, we can help you examine all your options at our website. There is a strategy that pays upfront to the borrower, which makes the entire process quick and easy.

Inventory as a startup expense

If you will be selling goods rather than services, there is a great way to make an educated guess about how much to set aside for inventory. Look at your total budget for any given period, a month or a year work best. Then, multiply the total period’s budget by 20 percent, and that amount will be close to what you will likely be spending on goods for sale.

Be careful when it comes to inventory. Not only do inventories require money investments that you can not spend on other business building tips, but they will bring additional startup expenses for you.

These one-time costs can be considerable, depending on what type of industry you are in. On average, new owners dish out between $300 and $1,000 for fees, licenses, and incorporation costs. Even if you’re operating a tiny, one-person shop from the spare bedroom in your home, consider going through the red tape of registering a legal name, setting up the right kind of entity, and obtaining whatever licenses or permits are required to do business in your location.


Marketing is an essential step to get your startup off the ground and into the arena of consumerism. There is a lot of latitude with this startup expense. Keep in mind that even if you do online sales, you will need to spend something on promotion and advertising, ten percent of your total budget is a good rule of thumb for this basic, necessary expense category.

Dragan Sutevski

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan