How Much Does It Cost to Start a Business? Startup Costs, Line by Line

How much it costs to start a business in 2026

Starting a small business costs $1,045 on my lean example budget, $9,012 on a standard one, and $36,397 on a funded one for the first year, before rent, inventory, equipment, or payroll. Those three totals are the sums of the cost lines in the table below, built from official fees and published freelance prices.

Here's how that lands for the three kinds of business I get asked about most. A home-based service business sits between $1,045 and $9,012. An online store starts at $14,512 once you swap the $2,500 website for an $8,000 e-commerce build ($9,012 + $5,500), and reaches $58,397 when the build is a $30,000 store ($36,397 + $22,000), all before a single unit of stock. A small agency-style business, where the brand and site are part of what you sell, belongs in the $9,012 to $36,397 band.

Decide which of the three is you before you read on.

One honest limit before we go further. WhatShouldICharge prices professional services and uses official government fees. It doesn't price rent, inventory, restaurant equipment, or wages, and those lines only come from real quotes. The SBA's startup cost guide lists those categories so you don't miss one. If you want the order to do things in rather than the money, the guide on how to start a business walks the sequence. First, the table, line by line.

Startup costs by cost line and budget level

The biggest lines in a startup budget are the website and its words, not the paperwork: in the funded column each costs $8,000, while the filing fee, EIN, and license together come to $550 ($500 + $0 + $50).

The lean column is what I'd do with almost no cash: an LLC filing at Kentucky's $40, a beginner logo at $300, a DIY builder at $145 for the year, and your own words and phone photos. The EIN line is $0 in every column because the IRS says you never pay a fee for an EIN. The one line I won't let you zero out is insurance.

The standard column hires people for what customers see. A mid-level logo at $900 plus a one-page guideline sheet at $1,500 comes to $2,400, just under the $2,500 floor of a full brand identity package. The $2,500 site is a five-page build on a purchased theme, and the website cost guide explains what pushes a build past that. Before you sign a build quote, check the hours against the web developer rate calculator.

The funded column buys a $9,000 identity, split as a $3,500 logo and $5,500 for typography, color, guidelines, and applications, plus $3,000 of brand strategy, $8,000 of site copy, and a $3,000 full-day shoot. Every number in the table is an official fee or a published WhatShouldICharge range, and the insurance line carries our estimate label because insurers quote your business, not a category.

Notice that several lines in the table come back next year. That split is next.

One-time startup costs vs first-year recurring costs

Of the $9,012 standard budget, $7,750 is one-time spending and $1,262 renews every year: domain $10, hosting $24, bookkeeping $228, and insurance $1,000.

That split matters because the renewing part is what your sales have to cover, not your savings. The lean column renews more than it looks: $655 of its $1,045 comes back ($10 domain + $145 builder plan + $500 insurance), so only $390 is truly one-time. In the funded column the renewing lines are $3,347 ($35 + $24 + $1,788 + $1,500), which leaves $33,050 as one-time spending ($36,397 − $3,347).

Your state then adds yearly bills the first-year table doesn't show. Kentucky's LLC annual report is $15 and Massachusetts charges a $500 annual report every year, according to the Massachusetts Corporations Division fee schedule, while Washington charges a $5 processing fee to renew a business license location, per the Washington Department of Revenue. That makes year two $675 on the lean column ($655 + $15 + $5) and $3,852 on the funded column ($3,347 + $500 + $5). I haven't priced Texas's yearly obligations for the standard column, so add your own state's annual fee to $1,267 ($1,262 + $5).

The table also treats marketing as a single month on purpose. Keep the standard $500 going and year one costs $6,000 ($500 × 12). That's more than the logo, guideline sheet, and site copy combined, which come to $3,900 ($900 + $1,500 + $1,500).

If you're one person selling your own skills rather than building a business with a brand and a site, your recurring costs look different, and freelance overhead costs itemizes them. Next, the choices that push your own number up or down.

What changes the cost of starting a business

Three choices move a startup budget more than anything else: business type, home or storefront, and DIY or hired, and together they explain the $35,352 gap between the lean and funded columns ($36,397 − $1,045).

Business type decides which lines exist at all. A service business stops at the table. An online store adds the $5,500 to $22,000 website swap from the short answer, product photography at $25 to $75 per image, and inventory. A restaurant or retail shop adds lines this table doesn't price, and those need landlord and supplier quotes.

Home or storefront is the second switch. Working from home keeps rent at $0. A lease adds rent, deposits, and build-out that I can't price for you, so start from the SBA category list and collect quotes before you sign anything.

DIY or hired is the switch you control today. Every $0 in the lean column is your time standing in for money. Writing your own site copy saves $1,500 in the standard column, but only if the words still sell.

For scale, 531,728 business applications were filed in August 2026, down 7.8% from July, according to the Census Bureau's Business Formation Statistics. Every one of those owners faced the same DIY-or-hire call. If you're a solo freelancer, the guide on how much money you need to start freelancing fits you better than this one. The way to settle it for your business is to build your own number.

How to work out your own startup budget

A startup budget is the lines you'll actually buy plus the sales it takes to earn them back, and on the $9,012 standard budget that can be as few as 10 sales.

Start with the table. Copy every line, delete what doesn't apply to your business, and write a real quote next to anything the table can't price, like rent or stock.

Then run the SBA break-even formula: Fixed Costs ÷ (Price − Variable Costs) = the number of sales you need. Here's a worked example. Say you run a small web studio selling five-page sites at $2,500, and you pay a freelance copywriter $1,500 for each site's words. Each sale leaves $1,000 ($2,500 − $1,500). Divide the $9,012 budget by $1,000 and you get 9.012, so the tenth site is the one that puts you past break-even.

Write that number down.

Then do the part most people skip: run it again for year two. The launch is paid for by then, but the renewals aren't: $1,267 on the standard column before your state's annual fee. At $1,000 a sale, that's 1.267, so 2 sites a year just to stand still before you pay yourself anything. If that feels like a lot, trim the renewing lines first, not the launch.

Now check every quote the same way, by dividing it by an hourly rate to see the hours you're buying. A $1,500 guideline sheet at the recommended $75 an hour from the graphic designer rate calculator is 20 hours of design time ($1,500 ÷ $75). The project hours estimator does that math for bigger scopes, and the WhatShouldICharge methodology explains where the rates come from. Once you know your number, the IRS lets you deduct part of it.

The IRS tax deduction for start-up costs

The IRS lets you elect to deduct up to $5,000 of start-up costs and up to $5,000 of organizational costs in your first year, and each $5,000 is reduced by the amount those costs pass $50,000. Whatever you can't deduct is amortized over 180 months from when the business begins, per the IRS instructions for Form 4562, and which of your costs qualify is a question for IRS Publication 583 and your tax preparer. The deduction lowers taxable income, not the cash you spend up front, which brings us to where that cash comes from.

How new business owners pay for startup costs

Owners' own money comes first for many new businesses, because outside money is harder to land than it looks: in the Federal Reserve Banks' Small Business Credit Survey, 60% of employer firms applied for financing and only 42% of those applicants received the full amount.

Put those two together and about 25% of employer firms got all the financing they asked for (60% × 42% = 25.2%), according to the Fed's 2026 report on employer firms. The Fed's 2024 report on startup firms found startups were more likely than older firms to have received funds from their owners.

So fund the lean column's $1,045 from savings if you can, and treat anything above it as something early sales pay for. If you need the standard budget and only have half, spend first on what customers see: site, copy, and logo, which come to $4,900 of the standard lines ($2,500 + $1,500 + $900).

Don't spend every dollar on launch day. Year two of the lean column costs $675 in renewals, so $1,720 in savings covers the lean launch and a full second year of those bills ($1,045 + $675). That cushion is worth more to a new owner than a nicer logo, because it keeps a slow first season from becoming a closed business. Borrow for growth once sales prove it, not to fund the parts of launch you could have skipped.

The paperwork won't be what empties your account. The SBA's register your business page puts total registration cost under $300 in most cases. What empties it is the list in the next section.

Startup costs new owners forget

The startup costs new owners forget add up fast: months two through twelve of marketing cost $5,500 at the standard pace ($500 × 11), and self-employment tax takes 15.3% of 92.35% of your profit.

On $50,000 of profit, that tax is about $7,065 ($50,000 × 0.9235 × 0.153). Set it aside from the first payment, not in April.

Here's the rest of my list.

Payment processing. Wave's free Starter plan charges 2.9% + $0.60 per card payment, according to Wave's pricing page, so a $2,500 invoice paid by card costs $73.10 ($72.50 + $0.60).

Usage rights on photos. Licensing photography for advertising adds 25% to 100% to the shoot, as the guide to photography usage rights pricing shows.

Site upkeep. A website maintenance retainer runs $500 to $3,000 a month once someone else is keeping the site running.

A trademark. The base application fee is $350 per class of goods or services, per the USPTO trademark fee page.

The strategy you skipped. If the lean logo stops fitting, foundational startup brand work runs $3,000 to $15,000, and the brand strategist rate calculator shows what the hours should cost.

When you're ready to act, the new business checklist puts every task in order with its due date. The questions below are the ones I hear most once people see these totals.