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How Much Does a Business Plan Cost?

  • Written By Dave Lavinsky

business plan writing services costs

A complete business plan helps you to identify your business goals and how you plan on reaching them. Whether you are a new business owner or an experienced entrepreneur, writing a comprehensive business plan can help you start, grow, and/or attract investors to fund your business.  

How Much Does It Cost to Write a Business Plan ?

Business plan pricing depends on what route you take to create it. However, there are a few essential elements that are common to all business plans:

  • Executive Summary
  • Business Description
  • Market Analysis
  • Customer Analysis
  • Competitive Analysis
  • Marketing Strategy
  • Operations Plan
  • Management Team
  • Financial Plan

There are several ways to approach writing a successful business plan, but the cost of each way varies widely. The cost of a business plan can be a significant investment, but it’s an essential tool for any business. Below we provide some tips for what to consider and the costs for the various methods of completing your own business plan.  

Considerations When Writing Your Own Business Plans

There are several things to consider when writing your own plan. Depending on whether you’re in need of funding and how much, the costs for your business plan will be different.

Take into account:

  • How long will your business plan be?
  • How many hours does it take to complete the business plan?
  • What kind of language is used in the business plan?
  • Who will use the business plan?
  • Who will fund your business?
  • How much are you looking to raise or if you need funding at all?

According to our business consultants’ surveys of investor requirements, a 15- to 25-page business plan is the ideal length. Adding more pages may cause your time-constrained investor to skim portions of the plan, even if they are interested, which might result in important information being overlooked. However, fewer pages may lead potential investors to believe that the firm has not been thoroughly thought out or simply doesn’t have enough information for them to make an investment decision.  

Business Plan Template Costs

There are a variety of business plan templates online that you can purchase for a one-time fee. These templates range in price but usually start at around $100. Remember, a bargain business plan template may not include all the information that you need, so it’s important to understand what is included with the template you purchase.

Many of these templates also come with instructions to help you fill in the template and make changes as needed. However, if there is something you want to be changed on the template, it may take time and money to have it done.

Be sure to do your research and find the right template for your business. The wrong template could set you back even further and change the face of your business entirely. If you purchase a professional business plan template, make sure it’s from a reputable business plan company with business plan writing skills   in a variety of industries.

The business plan template should be easily editable and customized for your specific business needs and industry trends.

If you do not want to pay for a template, there are companies that will charge by the page and some that offer free resources . However, these templates may not have been professional business plans written for your exact type of business.  

Experienced Consultants & Business Plan Writers Cost

Hiring a business plan writer or professional writing service will help you get a comprehensive business plan written just for your business. A professional business plan consultant will help you identify your goals and how your company will reach these goals. A business plan consultant fee usually costs more but can be worth it if you do not have the time or resources to complete the business plan yourself.

A business plan writer can be found through online directories, but be sure to do your research prior to engaging in business with them. Be sure to ask for references and read reviews before hiring a business plan writing service.

If you choose to hire a business plan consultant, the complexity and length of the plan will determine how much is a business plan. Generally, a consulting firm or private consultants charge between $1,000 and $5,000 to have a comprehensive business plan written . However, a lengthy and complex plan can easily start at a few thousand dollars and stretch into the tens of thousands of dollars based on the needs of the business.

Some experienced business plan writing services also offer package deals that include additional services, such as market research, a marketing plan, and realistic financial projections.

Business Plan Software Costs

There are business plan software applications that can be used for free or have a monthly subscription cost, which may work better for your needs depending on what you need in a business plan. These apps provide templates and make writing a business plan and business planning easier. They help organize the information you enter into the app and will sometimes offer advice on how to do things like financial projections for your business plan .

The information that you put into the application can be used for several different types of business plan needs. These apps are great for startups and small businesses looking to raise capital or secure funding.

Each app or software varies in what it offers. Some are more customizable than others, some have more options for presenting your business plan, and some even offer investment opportunities. With just your business idea, the business planning software can help you write your own business plan quickly and easily. 

Write Your Own Business Plan from Scratch

If you do not want to purchase a template or use software, the easiest and most cost-effective way is to write a business plan from scratch. This route takes time and effort to complete but can be done by anyone willing to put in the work.

When writing your business plan documents, remember that they should be as detailed as possible. This document is your guide to starting and running your business. The more complete it is, the better off you’ll be.

There are a variety of free resources available online to help you write a business plan, including articles, templates, and even video courses.

When writing a business plan from scratch, it’s important to consider all of your business aspects. This includes your business concept or business model , management, production, market research , sales strategies , customer service, operations, human resources, financial projections , and more.

Try to be as thorough as possible when writing the plan. While the task may seem daunting at first, you’ll find that putting together a business plan is not so bad once you get started. After all, if you can dream it, you can write it.

The cost of writing a b usiness plan is dependent on the purpose, type, and length of the business plan. The amount of time it takes to complete a  business plan , the language used, and who will be using the document also play a factor in the cost. You can find templates for a one-time fee or pay by the page, hire a business plan writing service or a business plan writer , contact a consulting firm , or use software/apps to create your business plan. Whichever option you choose, make sure you do your research, conduct an in-depth business plan review, and find the best resource to meet the goals for your business.  

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How to Calculate Startup Costs for Small Businesses

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When you’re writing your business plan , you’ll need an accurate estimate of what it will cost for you to start your business so you can decide how to manage your funding and expenses.

Accurately estimating your startup costs can be tricky, but this guide will help you understand your initial costs and how you can plan for them.

First we’ll look at some of the most common startup expenses to get you started:

normal cost business plan

Common business expenses

The first step is to make a list of all the purchases you’ll need to make in order to start operating.

Categorize your list into expenses that are one-time purchases and those that will be ongoing payments, since both will factor into your calculations.

Here are some of the most common expenses in both categories:

One-time expenses

Necessary equipment like a cash registers, machinery, or vehicles

Incorporation fees

Permits and licenses, such as city, county, and state licensing, or those related to your specific industry

Computer or technology equipment

Down payment for your office or store

Initial business cards

Initial inventory

Initial office supplies

Technology, such as computers, tablets, or printers

Office or business furniture

Ongoing expenses

Business taxes

Your rent or mortgage payment

Accounting services

Legal services

Business insurance

Payroll and employee benefits

Your salary and benefits

Operating expenses, such as bags in retail

Office supplies, such as pens and paper

Website hosting and maintenance

Travel if your business will require it, including gas

Utilities like electric, gas, water, phone, and internet

Marketing materials

Ongoing inventory

Ongoing office supplies

Loan or credit payments

Next, you’ll also need to determine which of your ongoing expenses are fixed costs, and which are variable costs. Fixed expenses you can plan for exactly, but for variable expenses, your costs will change each time.

Here are some common expenses in each category:

Fixed expenses

Lease or mortgage

Administrative costs

Variable expenses

When planning for your startup, you need to only consider items that are essential in the beginning, rather than optional items you can invest in later when your business revenue can help offset the cost.

Don’t forget to research additional necessary expenses in your industry. Other professionals in your field or websites about your type of business can help you determine what is essential.

>> MORE: Best budgeting software for businesses

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

How to calculate startup costs for your small business

Use your list from above to complete the next steps:

1. Research

After you’ve made a list of your expenses, it’s time to research. You’ll need to estimate the cost of each item on your list for an accurate estimate.

When researching, don’t forget to do some bargain hunting. You’ll want to minimize expenses as much as possible without sacrificing quality for big-ticket items. This will mean that your research will include equipment capabilities, reviews, maintenance costs, and warranties.

Your one-time expenses and fixed ongoing expenses should have specific costs you can estimate fairly accurately.

For variable ongoing expenses, you may have to do some extra research and make some broad guesses. For example, you won’t know what your ongoing inventory costs will be until you’re operational, but if you factor in a bit of cushion on these expenses, you can ensure you’ll have enough funding to cover these expenses.

2. Expense totals

You’ll need to total your one-time expenses, so that you know exactly what just opening the business will cost, but that isn’t all. You’ll also need to factor in several months’ worth of ongoing expenses.

While your business will be able to cover these expenses once it is operational, it may take time before it can generate enough sales to cover these costs, much less make a profit.

Generally speaking, it’s a smart idea to count on covering six-12 months of business expenses up front while your business is growing. While you can factor sales growth and business revenue into the payment for these costs to lessen the upfront burden, it’s generally safer to make calculations on the assumption that your business won’t be able to contribute, since you won’t be able to accurately forecast sales until you’re operational.

You may also find that some expenses will increase as your business grows, such as marketing, inventory, or payroll, so you’ll want to factor in some extra cushion for growing needs.

4. Total startup costs

Once you have all these figures, you can total your expenses to estimate your startup costs fairly accurately.

Yes, it’s probably a large number, especially if you plan to factor in a cushion for the first few months to a year of operation, but there are many funding options for new business owners.

Once your business begins operating or you begin making purchases for your business, you may find additional needs you left out of your estimates or that some expenses are lower than you planned. You’ll need to keep adjusting your plan as you learn more through the process of starting your business.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

On a similar note...

How much does a business plan cost?

entrepreneur assessing the cost of writing his business plan

You need a business plan and are wondering how much creating one costs? 

You’ve come to the right place: in this guide, we’ll look at the factors that influence the cost of a business plan. 

This will help you figure out exactly how much you should pay for a business plan software , writer, or even a template. So, let’s get started.

In this guide:

What are the factors that influence the cost of a business plan?

How much does a business plan software cost, how much does a business plan writer cost, how much does a business plan template cost.

  • The final verdict

First, let’s agree on the scope. In this guide we’ll look at the cost of putting together the business plan itself and exclude the costs associated with preparatory research. 

There are a number of things you need to do before you begin drafting your business plan: gathering data, assessing budget lines, and iterating on multiple scenarios to find the best strategy for your business. 

Needless to say, all of these things require both time and money. However, these tasks are performed before creating the business plan itself, and are therefore excluded from the scope of our guide.

Now that we know what we are solving for, let’s get to it. 

We will first look at the tasks that need to be completed to create the business plan, then we will look at tools that can be used to speed up the process, and finally at who can perform these tasks.

What jobs need to be done when drafting a business plan?

Fundamentally a business plan is composed of two main parts:

  • A financial forecast which highlights the business’ funding requirements, growth prospects, potential profitability and cash generation
  • A written presentation which presents the business operations and strategy in details, and provide the context needed to judge the quality of the forecast

Both of these parts are essential and contribute to the cost of creating the business plan. 

Let’s look at both of them in a bit more detail.

Creating the financial forecast for your business plan

A financial forecast helps assess the business’s viability. This section of a business plan contains at a minimum the following financial tables:

  • A cash flow statement - a document that details how money comes in and goes out of the business. 
  • A Profits and Loss (P&L) statement - a document that provides information about the expenses and revenues the business has generated over a given time period.
  • A balance sheet - a document that details the assets and liabilities of the business at any given point in time. 

There are two ways to create your forecast. You can either opt for that old fashioned spreadsheet method or use a financial forecasting software instead.

The main driver in terms of cost when it comes to creating your forecast is the complexity of your business. 

Modeling a simple brick and mortar business is relatively straightforward. Modeling a complex business organization with multiple processes (manufacturing, storage, distribution, etc.), lines of products and services, and locations or legal entities will require more work and, therefore, increase the cost.

Writing your business plan itself

The written part of a business plan is without any doubt the most time-consuming, and contributes to the cost of creating the plan.

The time required (and, therefore, cost) to draft your business plan will first be influenced by the size of your business. 

Your business plan includes valuable strategic and financial information. If your business has multiple locations or products and services, you’ll have more information to include. This means writing about the business as a whole will take longer, require more effort, and will increase the overall cost. 

Then comes the complexity of the industry your business operates in (or/and your business model). A business plan is argumentative and needs to demonstrate that there is a viable business opportunity to be seized by you on the market. 

To do this you’ll have to provide in-depth explanations backed by market research, so that your reader can understand:

  • What you sell
  • Who you sell to
  • Who you compete against
  • Whether the market is large enough and your business correctly positioned to compete effectively 

This is quite straightforward to do if your business operates in an industry your potential readers are familiar with. If your reader is unfamiliar with your niche, however, then you will need to do more explaining. 

Adding these details will help make sure your readers - investors or banks, usually - understand that a commercial opportunity is ripe to be seized on the local market. However, this will require time and will add to the cost. 

Justifying the amount of funding you need for your business is the last factor that can increase the cost of writing your business plan. A funding requirement of $10 million will need more explanation and convincing than that of $10,000. Needless to say that it’ll also take more time and effort. 

Now that we understand the factors that influence the cost of creating the document, let’s have a look at the tools which can be used to create a business plan.

What tools can be used to write a business plan?

There are two ways to put together a business plan: 

  • Using a spreadsheet and word processor

Using an all in one business plan software

Using a spreadsheet and a word processor.

Creating a business plan using a spreadsheet and a word processor was the way to go in the 1990s. 

However, this method is quickly falling out of fashion, and for good reasons: 

  • It’s incredibly long and needlessly complicated
  • It requires knowledge of accounting in order to create the forecast on a spreadsheets without making errors
  • Investors and banks are skeptical of figures modeled by entrepreneurs themselves on spreadsheets 
  • Formatting such a long document on a word processor takes time and effort

Nowadays, the way to go is to use an all in one business planning software.

Along with being affordable, using an online business plan software has numerous other benefits. 

Some of them include: 

Creating a financial forecast for your business plan without manual calculations

The financial forecast is the most technical part of the business plan. 

Working on this section without adequate knowledge of finance can lead to critical mistakes which endanger the business’s future. 

Making such a forecast using online business plan software enables you to de-risk the process as the calculations and accounting treatments are done for you by the software using best in class modeling assumptions.

Furthermore, good online business plan softwares, such as the one we offer at The Business Plan Shop , come equipped with scoring algorithms which help identify issues within a financial forecast (such as insufficient cash or inventory, for example). 

This ensures that your forecast is free of modeling errors, and provides reassurance to the readers that the numbers can be trusted. 

entrepreneur enquiring about the price of a business plan from a writer

Getting access to instructions and examples throughout the process  

As mentioned, creating a business plan is a complex process for those who’re not familiar with creating such documents. 

Using online business plan software allows you to have access to expert guidance as you write. 

This means your business plan will be effective and completed faster than with a word processor. 

Being able to use downloadable templates to create a business plan 

Good online business plan softwares, such as the one we offer at The Business Plan Shop, come with dozens of downloadable business plan templates you can use as inspiration to write your business plan. 

Being able to look at concrete examples of business plans helps avoid writer’s block and speed up the writing process, thereby reducing the overall cost of putting the plan together.

Saving time on formatting

Good online business plan softwares, such as the one we offer at The Business Plan Shop, also come with professionally designed themes and color schemes which enable you to quickly get a stunning document matching your brand colors, while delegating the bulk of the formatting to the software.

Software also automatically integrates your forecast into the document, saving hours of manual formatting compared to using word processors. 

done for you formatting helping reduce the cost of your business plan

Now that we understand what tools can be used, let’s have a look at the last factor that influences the cost of creating the business plan: the person writing the document.

Who’s writing the business plan?

No matter what tool you use, writing a business plan is time consuming and the cost per hour of the person doing the actual writing will have a serious impact on the overall cost.

Here you have two options: either do the writing in-house using your team’s time, or outsource it to a professional business plan writer .

Outsourcing is usually much more expensive than doing the writing in-house as you have to cover the writer’s time, software, marketing costs, and profit margin. But it frees your team’s time which can be used elsewhere.

Now that we’ve covered the factors that influence the overall cost of a business plan, let’s have a look at the concrete price of the most popular options.

Need a convincing business plan?

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The Business Plan Shop's Business Plan Software

Using online software to create a business plan is undoubtedly the best approach, and you’ll probably end up paying for software anyway - whether you pay for software yourself or the software’s cost is included in your business plan writer’s fee.

There is a common misconception that business plan software might be quite expensive. However, that’s not the case with our online business plan software. 

As a publisher, The Business Plan Shop is committed to leveling-up the playing field between small businesses and large corporations by making our solution affordable to businesses of all sizes.  

You might think we’re a bit biased when it comes to talking about our own pricing. But you’re not bound to take our word for it: see our prices for yourself .

If you’re thinking of outsourcing the writing of your plan your next option will be to hire a business plan writer. 

However, you need to know that when you hire a writer to draft a business plan, the cost of the plan will depend on the factors we’ve mentioned earlier in this guide. 

In addition, the pricing structure for writing the business plan varies among writers: 

  • Hourly pricing - the writer charges a fixed hourly rate for their services. The hourly rate is multiplied by the hours they spend working on your business plan. 
  • Fixed pricing - in this structure, the writer will charge a fixed price based on creating a business plan. The price may depend on the length, level of details, and complexity of the document. 

While getting a fixed price is easier for budgeting purposes, you need to remember that you get what you pay for. 

Business plan writing is a for profit activity, which means that if the price seems low, then there is probably a catch. The writer might either be inexperienced (a business student for example), or take shortcuts and not spend enough time on your document, or the result might be incomplete (only include a P&L in your forecast for example).

If you are writing a business plan to secure funding, you also need to remember that investors want their money to be used to grow your business, not wasted on consulting fees. So the amount you spend on your business plan needs to be reasonable in relation to the amount of financing you are looking for.

For example, if you are trying to secure $100k and spend $10k on business plan writing services and $10k in legal costs, then you’ve wasted 20% of the capital you are trying to secure, which will not impress investors.

Finally you also need to remember that outsourcing your plan is not a completely hands-off process. You still need to provide the writer with the inputs and the research materials needed to write your plan.

You are the only one who knows: how your business operates, what strategic and commercial actions have been planned, and how much sales are expected, and what employees are paid.

So, while we are discussing the amount spent on the actual business plan writing fee, it’s not a total cost by any means, nor a like-for-like comparison with the cost of using software discussed above.

With that in mind, let's look at how much hiring a writer would actually cost. 

How much would a business plan writer cost per hour? 

The hourly rate for a business plan writer is usually around $100 to $300. This might not seem that much at first. However, you must understand that a minimum of 20 hours is usually required to create a business plan. 

So, if your business plan writer charges $100 per hour and works for 20 hours, you’ll pay $2,000 for the document. If they charge $300 per hour, you’ll pay $6,000. 

However, these are just for simple business plans. Depending on your business size and the complexity of your industry, the total price might end-up being much higher.

Another factor is the amount of revisions needed on your business plan. It’s quite common for your plan to require several updates as you gain more information on your market conditions and feedback from lenders and investors.

When you use hourly consultants these revisions can quickly add-up as you have to pay extra for them.

How much would fixed business plan writing services cost? 

When it comes to fixed pricing, the actual cost may vary from one writer to the other. 

However, the price is generally based on their years of experience, level of expertise, and the amount of work they put in. 

Packed-based pricing service might start around $2,000. However, you’ll only get basic-level business plans at such a price. 

If you need a complex business plan with in-depth market analysis, detailed plans about business operations, and three to five years of financial projections. Package services offering such business plans might cost as much as $30,000. 

Considering these prices, it’s safe to say that you should only opt for this approach if you aim to secure a significant amount of funding. 

If you’re in the starting phases of your business, it is better to use online business plan software instead. The money you spend hiring a writer can be used for other business operations such as marketing and product development. 

Need inspiration for your business plan?

The Business Plan Shop has dozens of business plan templates that you can use to get a clear idea of what a complete business plan looks like.

The Business Plan Shop's Business Plan Templates

The last alternative to write your business plan at a low cost is to use an Excel and Word business plan template.

Most people often think a business plan template will not cost anything at all. They’re right to a certain extent. 

You can find loads of free business plan templates on the internet, but here also: you get what you pay for. These free templates are usually either: very basic, not properly maintained and outdated, or prepared by unknown “experts” who don’t seem to grasp the basic principles of accounting.

The cost of some business plan templates might go to $300. These templates are more detailed. In addition, some of these paid templates might even have visual aesthetics making them more presentable. 

Before you opt for this approach, you need to understand that these are just templates. This means they’ll provide you with a structure and format. However, you’ll still have to do all the work yourself. 

In comparison to using online business plan software, templates are more expensive and extremely low value for money. Furthermore, using a template still requires you to have a certain level of expertise and is an approach that’s not free from error. 

The final verdict 

When it comes to creating a business plan, you have three options: online software, a business plan writer, or templates. 

Professional software usually offers the best return on investment. Templates are low value for money and should be avoided. And writers can be worth it, if you intend on raising a significant amount of capital. 

Also on The Business Plan Shop

  • Business plan vs budget: what's the difference?
  • Do I need a business plan? Your questions answered

Know someone who wants to create a business plan? Share this guide with them!

Guillaume Le Brouster

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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How to Calculate Startup Costs

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6 min. read

Updated December 18, 2023

What will it cost to start your business? It’s hard to know for sure. According to a recent survey of nearly 500 small businesses and startups,  owners spent $40,000 on average  in their first year of business. Regardless of how much you plan to spend, it’s important that you start planning early on to avoid any unforeseen expenses. 

Typical startup costs can vary depending on whether you’re operating a  brick-and-mortar store, online store, or service operation . But a common theme is that launching a successful business requires preparation. And while you may not know exactly what those expenses will be, you can and should begin researching and estimating what it will cost to start your business.

  • How to determine your startup costs

Like when developing your  business plan , or  forecasting  your initial sales, it’s a mixture of  market research ,  testing , and informed guessing. Looking at your competitors and industry benchmarks is a good starting point. Once you feel your initial estimates are in the ballpark, you can start to get more specific by making these three simple lists.

1. Startup expenses

These are expenses or upfront costs that happen before you launch and start bringing in any revenue, such as permit and licensing fees, website design, down payments and equipment purchases. As mentioned earlier, these should be split into one-time and ongoing expenses. 

By having them outlined this way from the start, you’ll be able to keep better track of your expenses and identify any natural cost-cutting options over time. 

2. Startup assets

These are costs associated with long-term assets purchased in order to start your business. While cash in the bank is the most basic startup asset (and we’ll talk more about that later) there are some other common assets you may need to invest in:

  • Starting inventory
  • Computers or other tech equipment
  • Office equipment
  • Office furniture

Why separate assets and expenses?

There’s a reason that you should separate costs into assets and expenses. Expenses are deductible against income, so they reduce taxable income. Assets, on the other hand, are not deductible against income.

By initially separating the two, you potentially save yourself money on taxes. Additionally, by accurately accounting for expenses, you can avoid overstating your assets on the balance sheet. While typically having more assets is a better look, having assets that are useless or unfounded only bloats your books and potentially makes them inaccurate. 

Listing these out separately is good practice when  starting a business  and leads into the final piece to consider when determining startup costs. 

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3. Cash required to get started

Cash requirements are an estimate of how much money your startup company needs to have in its checking account when it starts. In general, your cash balance on the starting date is the money you raised as investments or loans minus the cash you spend on expenses and assets.

This is the last piece of the puzzle you’ll need to get started. As you build your plan, watch your  cash flow projections . If your cash balance drops below zero then you need to increase your financing or reduce expenses. 

How much startup cash do you need?

Many entrepreneurs decide they want to raise more cash than they need so they’ll have money left over for contingencies. While that makes good sense when you can do it, it is difficult to explain that to investors. Outside investors don’t want to give you more money than you need, because it’s their money.

You may see experts who recommend having anywhere from six months to a year’s worth of expenses covered, with your starting cash. That’s nice in concept and would be great for peace of mind, but it’s rarely practical. And it interferes with your estimates and dilutes their value.

For a better estimate of what you really need in your starting cash balance, you calculate the deficit spending you’ll likely incur during the early months of the business. From there, estimate how much cash you’ll need moving forward until you hit a steady break-even point several months and even years after opening.

  • Other considerations for estimating startup costs

Pre-launch versus normal operations

With our definition of starting costs, the launch date is the defining point. Rent and payroll expenses before launch are considered startup expenses. The same expenses after launch are considered operating or ongoing expenses. And many companies also incur some payroll expenses before launch — because they need to hire people to train before launch, develop their website, stock shelves, and so forth.

The same defining point affects assets as well. For example, amounts in inventory purchased before launch and available at launch are included in starting assets. Inventory purchased after launch will affect  cash flow , and the balance sheet; but isn’t considered part of the starting costs.

So, be sure to accurately define the cutoff for startup costs and ongoing expenses. Again, by outlining everything within specific categories, this transition should be simple and easy to keep track of.

Your launch month will likely be the start of your business’s fiscal year

The establishment of a standard fiscal year plays a role in your analysis. U.S. tax code allows most businesses to manage taxes based on a fiscal year, which can be any series of 12 months, not necessarily January through December.

It can be convenient to establish the fiscal year as starting the same month that the business launches. In this case, the startup costs and startup funding match the fiscal year—and they happen in the time before the launch and beginning of the first operational fiscal year. The pre-launch transactions are reported as a separate tax year, even if they occur in just a few months, or even one month. So the last month of the pre-launch period is also the last month of the fiscal year.

Consider startup financing as part of your startup costs

Of course, startup financing isn’t technically part of the starting costs estimate. But in the real world, to get started, you need to estimate the starting costs and determine what startup financing will be necessary to cover them. The type of financing you pursue may alter your startup or ongoing costs in a given period, so it’s important to consider this upfront.

Here are common financing options to consider:

  • Investment: What you or someone else puts into the company. It ends up as paid-in capital in the  balance sheet . This is the classic concept of business investment, taking ownership in a company, risking money in the hope of gaining money later.
  • Accounts payable: Debts that are outstanding or need to be paid after a certain time according to your balance sheet. Generally, this means credit-card debt. This number becomes the starting balance of your balance sheet.
  • Current borrowing: Standard debt, borrowing from banks,  Small Business Administration , or other current borrowing.
  • Other current liabilities: Additional liabilities that don’t have interest charges. This is where you put loans from founders, family members, or friends. We aren’t recommending interest-free loans for financing, by the way, but when they happen, this is where they go.
  • Long-term liabilities: Long-term debt or long-term loans.
  • Aim for long-term success by estimating startup costs

Whether you use the  LivePlan  method or the traditional method for estimating your startup costs, make sure you’ve considered every aspect of your business and included related costs. You’ll have a better chance at securing loans, attracting investors, estimating profits, and understanding the cash runway of your business.

The more accurately you layout startup costs and make adjustments as you incur them, the more accurate vision you’ll have for the immediate future of your business. 

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Content Author: Tim Berry

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

Check out LivePlan

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How to Calculate Business Startup Costs

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Starting a business from scratch takes a lot out of you, even before you begin operating—whether it’s about selecting a revenue model, securing startup funding, or estimating startup costs.

I already knew it was challenging for entrepreneurs to calculate the startup costs accurately.

However, when I turned up to my computer, researching this article, I discovered so many challenges new business owners face while estimating startup costs that I had overlooked or didn’t pay much attention to earlier.

Thousands of startups close down every single year. 38% of them fail solely because they underestimated their startup costs and ran out of cash. You can’t ignore something like that, can you?

That said, I’m ready to pour my research into the article to help you calculate your business startup costs .

So, you’re ready to begin? Let’s dive right in.

Key Takeaways

  • Startup costs are the expenses a startup must bear in the process of starting a new business, while operational costs are the expenses that are incurred during daily operations.
  • Different types of business structures, such as sole proprietorships, partnerships, and corporations, have different costs.
  • Business insurance, formation fees, licensing and permits, and marketing are some of the most common business startup costs.
  • A modern financial forecasting tool is the most efficient method for calculating startup costs.

How much does it cost to start a business?

Startup costs for a small business depend on various factors like business model, location, industry, and scale of operations. Although it’s tough to estimate precisely, Guidant Financial’s 2023 survey reported that the average cost of starting a small business falls between $50K and $1 million .

You must consider the industry, business category, working capital requirements, and other common expenses associated with the business for the accurate estimation of startup costs.

Let’s kickstart this guide by discussing the common startup expenses to consider while starting a new venture.

Common Business Startup Costs to Consider

It is a typical list of expected business startup costs with rough cost estimates you must plan for while starting a new business. Your actual startup costs will entirely depend on your business category and the industry you serve.

Following are some of the most common startup costs to consider:

1. Equipment and tools

It’s no surprise we’re starting the list with equipment and tools. There’s no way a business can operate without the necessary equipment. The equipment costs may range from $10,000 to $120,000 . However, these costs will entirely depend on the business type and equipment requirements.

For instance, starting a food truck would require financing a food truck and expensive kitchen equipment, while starting a small daycare would only require purchasing a few play area equipment.

Here are the average equipment costs for some of the popular business types:

  • Restaurant and food trucks: $24,000 to $120,000+
  • Small Bakery: $6,000 to $8,000
  • Clothing line: $2,000 to $15,000+
  • Construction: $10,000 to $50,000
  • Law firm: $5,000 to $25,000+
  • Barbershop: $1,000 to $2,000

2. Incorporation fees

The first thing you should do is choose a business entity when you plan to form a new business. The most common and preferred business structure types include sole proprietorship, partnership, corporation, and LLC.

The business incorporation or filing fees can range from $50 to $725 in the United States depending on your industry, the state you operate in, and the business structure you choose.

However, the average incorporation fee is $300 in the majority of the states in the US. You may contact your secretary of state’s website to learn more about the filing fees or process for the articles of incorporation or articles of organization.

3. Business licensing and permits

Operating any small business requires specific licenses and permits depending on the industry compliance and regulations. For instance, a trucking company requires a USDOT number, heavy vehicle use tax, and others, while a restaurant may need licenses like food safety and liquor licenses to operate.

Similar to different filing fees for other business structures, the business licensing and permit fees vary depending on the business industry and regulatory compliance. You can expect to spend between $1,000 to $5,000 for your licensing and permitting requirements.

4. Office or retail space

If you’re starting a small business that can be operated from home like a home bakery or an online clothing store, you may not have to worry about office space costs.

But if it’s not the case, paying for an office or a retail space would make up a sizable portion of your fixed expenses, no matter whether you rent or buy the place.

Based on our research, you should spend around $100 to $1200 per employee monthly on your workspace.

However, the actual office space expense will entirely depend on your location and the type of space you’re using.

5. Legal and professional fees

Professional and legal fees may sound like an additional expense while starting up with limited resources, but it’s essential to ensure compliance with regulations and maintain accurate financial records.

You may choose legal assistance for business licensing, EIN registration, and legal paperwork, a business consultant for market research and strategic planning, and an accountant for bookkeeping and tax planning.

You can hire these professional consultants on an hourly basis; their services typically cost around $40 to $150 per hour.  You should spend around $2,000 to $10,000 per year on professional and legal fees.

6. Inventory

Retail, wholesale, distribution, and manufacturing—if your small business falls under any of the mentioned categories, you need an inventory to operate your business. Finding the ideal inventory size to carry can be challenging when entering a new marketplace.

You want to attract more and more customers and make sales in your early days. However, you can’t also risk having too much inventory since it can increase spoilage.

Consider allocating 15% to 25% of your budget to inventory, depending on your industry. You will eventually learn more about inventory management once your business starts operating and making sales.

7. Marketing and advertising

Although it’s an optional expense, marketing is something worth investing in. Your marketing expenses may include physical materials like sign boards, banners, hoarding, paid social media advertising and search ads, or money paid to marketing agencies or consultants.

It is suggested to keep your advertising and promotion costs under 10% of your budget. If you’re working on a really tight budget, there’s no need to spend big bucks on marketing or hire fancy consultants or agencies.

With social media being a free marketing platform, over 47% of small business owners run their marketing efforts themselves, and you can do it, too.

8. Website development

A business website is like an online office where customers can contact you, learn more about your offerings, and seek assistance.

When building a website, make sure it looks professional, is easy to navigate, and displays the relevant information about your product and service offerings, as well as the contact information.

You can either develop a business website using website builders like Wix and Squarespace or hire a developer to do it for you.

Creating a website can range between $1,000 to $10,000 when you hire a developer, whereas you can do it on your own with website builders by spending around 40 dollars a month.

9. Business Insurance

Like you have a house, car, and health insurance, you need business insurance to ensure your business remains intact in troublesome and inevitable times, be it a natural disaster or a customer filing a lawsuit against your business.

The level of security and type of business insurance your business will require depends entirely on your business, industry, and the number of employees you have. For instance, a big-scale manufacturing company with over a thousand employees would require much stronger insurance compared to a home bakery.

Some of the must-have business insurance types include:

  • General liability insurance—for all online, offline, and home-based businesses.
  • Worker’s compensation insurance—for businesses with 1 or more employees.
  • Professional liability insurance—for businesses offering consulting services.

You must expect to spend approximately $500 to $1500 annually on business insurance.

10. Payroll

Payroll is undoubtedly one of the major business expenses most businesses incur. However, there’s no denying how crucial it is to hire quality employees to make your business thrive.

Of course, payroll expenses are employee salaries, but there’s more to it. Your payroll expenses may also include:

  • Incentive or bonus
  • Commissions
  • Paid time off
  • Overtime pay
  • Travel allowance
  • Other benefits

Most businesses spend around 20% to 50% of their monthly budget on payroll. It can be more or less for your business depending on your business and the number of employees you have.

11. Office furniture and supplies

Those planning to have a traditional nine-to-five corporate workplace, be ready to spend some severe bucks on office furniture and office supplies.

When you operate from a corporate workspace, you need a desk, chair, telephone extension, computer, computer programs like accounting software, and, of course, a coffee machine or two.

The cost of furniture and supplies depends solely on your employee strength and the size of the office. However, it’s recommended to keep your furniture and supply costs to 10% of your total startup costs.

12. Utilities

No matter whether you plan to rent or purchase a workspace, you are bound to pay utility bills that include electricity, gas, water, internet, and phone bills for your office.

Unlike other fixed costs, it’s hard to estimate utility expenses, but the average cost of utilities for commercial buildings is $2.10 per square foot , according to a report by Iota Communications .

Besides the electricity, internet, and phone bills, the utility expenses may also incur the HVAC unit installation costs. This heating and cooling system will add a few additional thousand dollars to your startup expenses.

13. Business taxes

How much you’d spend on business taxes will depend on your business entity, tax-deductible expenses, and revenue. Since it’s hard to predict your revenue, estimating the exact amount to allocate for tax preparation may feel a bit challenging.

Under US federal law, corporations pay a flat 21% corporate income tax . If you’re a pass-through entity(a legal entity that passes all its income on to the owners), the business income or losses will pass through to your personal taxes.

However, you, as a pass-through entity, can claim a 20% deduction on income before paying taxes.

 14. Other expenses

Since you’ve reached this section, you must already have a clear understanding of all the expected startup costs, whether they are one-time or recurring expenses.

Here, we will discuss the other costs most small business owners tend to miss or overlook while estimating the startup costs— research expenses and borrowing costs .

Capital is required for starting a business, and equity financing and debt financing are considered to be the most preferred ways to acquire the initial working capital.

Equity financing, however, does not apply to most small businesses since it requires stock issuance. So, securing a small business loan seems to be the most likely source of debt financing for small business owners.

Research expenses, on the other hand, are the expenses incurred even before you started operating, spent on conducting a careful industry analysis and market research.

When calculating your startup costs, make sure to include these two as well.

Since we have already discussed common business expenses, let’s move on discussing calculating the startup costs.

How to Calculate the Costs of Starting a Business

There are various ways to calculate the cost of starting a business. Still, drafting a business plan remains the best way to estimate startup costs.

The financial forecasting section of your plan provides three to five-year projections of revenue, profit, and expense.

The other resources for estimating startup costs include using Upmetrics’ startup costs worksheet or calculator . These resources will help you estimate the initial investment required and determine how much capital or financing you’ll need.

Know that many of the common business expenses we discussed earlier are recurring, with some of them being one-time expenses.

Be sure to categorize them and calculate the recurring expenses on a monthly, quarterly, and annual basis. In contrast, consider expenses like incorporation fees and equipment financing one-time costs.

Sounds like a lot to digest? Get a business planning software like Upmetrics and calculate startup costs in minutes with AI-powered financial forecasting .

Save hours estimating startup costs with Upmetrics

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Calculating Startup Costs for Your Small Business

Does your business fall under one of these categories? Excellent. We have startup cost guides for all the business categories listed below. Get a cost estimate for starting the business you plan to launch.

How to Reduce Your Business Startup Costs

Starting a business means being prepared to bear some non-negotiable expenses; there’s no other way around. However, sound research and thoughtful planning can help you save on high-ticket purchases—ultimately reducing your startup costs.

For instance, hiring professional business plan writers can be expensive for a business owner on a tight budget to create a business plan, so they can opt for a business planning software like Upmetrics to draft a business plan at a much lesser cost.

It was just an example, here are a few tips to help you reduce your business startup costs.

1. Create a business plan

It doesn’t make sense. Isn’t it another business expense? How will it reduce costs? Some of you must be having this line of questioning in your mind, but let us clear it up for you.

Brainstorming and listing all the important business costs, and estimating your total startup costs is challenging. Missing out on some critical expenses tends to happen. However, creating a comprehensive business plan makes things easier.

An AI-powered tool like Upmetrics makes sure you don’t miss out on any critical information and helps you properly estimate your startup costs.

Remember, accurate estimation of startup costs is your first step to reducing them.

2. Start small

You don’t need everything or a perfect business setup when you are not making any sales, forget about the business profits. Start small with limited resources and grow your business as it grows financially.

For instance, instead of having a big fancy office for your startup, start with a remote team or a co-working space until you raise capital or gather the necessary resources.

One way of doing that would be listing all the major high-ticket expenses and researching competitive alternatives for them.

3. Lease instead of purchasing

Of course, having your own office or a retail space feels good, but not at the cost of more than 70% of your budget for starting a business. Prefer leasing the place instead of purchasing.

It will leave you with enough working capital or cash to efficiently manage your business operations and handle the other non-negotiable costs.

Furthermore, there’s no guarantee your storefront will find success at the very first location; you may have to relocate if things don’t work out. The further process will be more straightforward with leasing, whereas the same won’t be the case when you own the place.

4. Buy used equipment, tools, or furniture

Since you’re looking for ways to reduce costs and save money, there’s no way for you to have brand-new business equipment, tools, and furniture. You can look for used equipment, tools, and furniture on online selling sites like eBay and Etsy.

Be sure to thoroughly check the equipment before purchasing to avoid any future restoration or repair costs.

5. Funding and business credit card

Now that you have a long list of capital expenditures, you will need financing or funding to manage all these costs. You can’t simply do it all on your own, can you?

It won’t reduce the startup costs but will help you get resources to manage them. Your funding options include debt and equity financing. You may apply for a business loan, reach out to angel investors, or apply for business grants to secure the initial investment for your business.

With limited debt financing options, it could be tough to get through. Applying for a business credit card can be a more accessible alternative to a business loan. You can easily qualify for it while also gaining a higher credit limit than your personal credit card.

Make sure you’re not totally relying on it or taking out more than you can repay. This can negatively impact your credit score, making it harder for you to secure business loans in the future.

And, the final section leads us to our conclusion!

And there you have it. We hope now you have a better understanding of startup cost calculation. What’s next? It’s time to estimate the actual costs of starting a business, be it a bakery, restaurant, or hot shot trucking, and start budgeting.

Get your hands on the modern and AI-powered business planning solution, Upmetrics—and create precise startup cost projections in minutes, just like that.

Frequently Asked Questions

What is the average cost to start a small business.

It is a question with a broad scope for the answer since you can start a business with an initial investment of $100, $1,000, and up to a million dollars or even more. However, the startup and first-year operational expenses fall somewhere between $30,000 to $40,000.

How do you calculate startup costs?

The most easy-to-use method to calculate startup costs is to create a business plan. It’s easier than ever to calculate your startup costs using a tool like Upmetrics. 

Simply head to the financial forecasting feature, get AI suggestions to list your startup and organizational costs, add remaining costs, and let it make the automated calculations for you.

What are business startup costs?

Business startup costs are expenses incurred when starting a new business. These can be your marketing costs, payroll expenses, or any other costs involved. These can either be recurring or one-time costs. 

For instance, your advertising costs are recurring, whereas incorporation fees are a one-time expense. Although there can be some common startup expenses, the value or costs for them may not be the same for two different businesses.

What is the difference between startup costs and operational expenses?

Startup costs are the expenses small businesses incur when starting a new business, whereas operational expenses are those incurred during normal day-to-day business operations. 

For instance, equipment financing can be considered a startup cost, whereas inventory or marketing costs can be your operational expenses.

What are the examples of start-up costs?

The following can be considered as a few examples of startup costs:

  • Equipment costs
  • Inventory expenses
  • Business licenses and permits
  • Marketing and advertising expenses
  • Payroll expenses
  • And others.

About the Author

normal cost business plan

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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How Much Do Business Plan Writers Cost?

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When you’re starting or growing a business, it’s important to have a clear plan in place. Writing a business plan can help you outline your goals and sales strategies, and it can be a valuable tool when seeking funding from potential investors such as venture capitalists or a bank loan. 

If you don’t have time to write your own business plan, or if you need help getting started, professional business plan writing services can be a great option. But, how much do these services cost? And is it worth the investment? Let’s take a closer look.

How Much Should I Pay For a Business Plan Writing Service?

Professional business plan writers and consultants generally charge between $2,000 and $25,000. However, the cost largely depends on the required quality of your plan, the complexity of your business plan, and the length of the document. Professional business plans for very small companies may only require a few thousand dollars to be written, while more complex business plans for larger, growing companies can easily cost over ten thousand dollars.

There are also private consultants who will write or edit your business plan on an hourly fee basis. Fees can range from $50 to $300 per hour or more, depending on the consultant and the complexity of your business plan.

Whoever you choose to get started with your business plan, be sure to consider what’s included in your service. At the very least, you should expect:

  • Comprehensive business plan including an executive summary, market analysis, marketing plan, financial plan with 3-5 years of financial projections, and other essential components required by potential investors
  • Customization based on your business model and specific to your business needs
  • Well-researched business plan based on relevant industry information and a thorough competitive analysis

There are several companies out there that offer complete business plan writing services. However, the quality of their work can vary dramatically. If you’re considering hiring outside help to write your business plan, choose carefully.

It’s important to remember that you get what you pay for when it comes to these types of services. If you go with a cheap plan writer, you run the risk of ending up with a low-quality business plan. If your business plan isn’t strong and professional-looking, it may be harder for you to get funding or attract investors.

Looking for a Business Plan Writer?

You’ve come to the right place!  Since Growthink was founded in 1999, we have provided business plan writing services for thousands of clients including startups, small business owners, nonprofit organizations and mid to large-sized companies. 

We understand that writing a business plan can be a time-consuming process for many entrepreneurs.  Hiring a business plan writer will allow you to quickly and expertly create a custom business plan.

 Expert Team of Business Plan Writers

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Call us at (800) 216-3710 or complete the form below and one of our business plan writers will reach out to you to schedule a time to speak about your business plan needs.

You can learn more about our business plan consulting services here

What Factors Impact Business Plan Pricing?

Some things that impact business planning services pricing include:

  • Length – Longer, more complex business plans will cost more than shorter business plans.
  • Company Size – A business plan for a large or complicated company can be more expensive to write.
  • Level of Expertise – Smaller companies may opt to hire less experienced writers who charge lower prices, while larger, well-established companies choose to work with high-quality professionals who charge higher rates. You can’t expect a less experienced writer to help you achieve your goals (funding, growth) for your business plan.
  • Turnaround Time – Generally, shorter turnaround times mean increased prices. Typically it will take 3-4 weeks to write a quality business plan.
  • Additional Services – Some companies offer additional services, such as business plan presentation and pitch deck editing and support. These can cost extra.

To really get your business off the ground, it’s important to have a business plan in place that has been written by someone with the expertise to put together a successful business plan. A professional business plan consultant is an excellent investment for increasing your chances of securing the funds you need to start and/or grow your business. However, it’s important to do your research and choose carefully when you’re ready to hire.

Who Can I Hire To Write My Business Plan?

When choosing a business plan writer or consulting firm, it’s important to look for a company with significant business experience and proven expertise in business plan development. Look for companies that have been around for at least five years and do business plan writing on a regular basis. They should also be able to provide references from other companies that they’ve worked with.

A Business Plan Writing Company or Consultant

When hiring a business plan writing service , you’ll have two primary options. You can opt to work with a single writer or a dedicated team of experts who will be responsible for the entire project. The price of the service may vary depending on which option you choose.

A business plan writer typically costs less than an entire team, but it’s important to keep in mind that you may have less control over the outcome. The upside is that your business plan will be written by an expert with a deep understanding of the writing process.

When choosing this route, you should ask for references and examples of previous work. Before hiring any business plan writer, be sure they have the proper credentials and experience to meet your needs. You should also ask about any fees associated with revisions or updates.

Many businesses choose to work with a business plan consulting firm that offers a collaborative team of experts. This type of company will give you the best of both worlds. You’ll be able to utilize the knowledge and expertise of all the experts involved in the project, while still retaining control over the direction and vision of your business plan.

If you’re trying to determine how much it will cost to work with a business plan writing service, take some time to explore all of your options before making a final decision. You should consider both pricing models as well as the qualifications offered by the various service providers in your area. Doing so will ensure you find the most qualified choice for your business planning needs.

You Can Write It Yourself

If you are a newer entrepreneur or business owner or you are trying to save money, there are several free resources available online to help you write your business plan. The Small Business Administration (SBA) and your local Chamber of Commerce offer business plan services, workshops, or courses that can help you get started. Using a business plan template is a great way to quickly and easily complete your plan, especially if you are unfamiliar with the business planning process.

Some business owners are comfortable writing business plans without any outside help. This option offers you complete control over the process, but it typically takes more time than you have to spare. For that reason, not writing your own plan is usually recommended for experienced business owners, even those with plenty of business plan writing experience.

In most cases, experienced business owners who write their own business plans will have a better idea of what elements are needed and how they should be presented. However, it can still take considerable time to compile all the necessary information into a cohesive business plan that meets your audience’s needs. And it’s one thing to write a business plan; it’s another to write a business plan that gets investors or lenders to write you a large funding check.

A Combination of Business Planning Services

If your budget doesn’t allow you to hire a comprehensive business plan service, combining outside services with writing your own business plan may be the best option. This approach gives you complete control over the process, while still allowing you to benefit from an expert business plan writer’s advice. It is also a great option for entrepreneurs who don’t have time to write their plan but aren’t quite ready to hire someone else to do it either.

Other business services that could help you include:

  • Market Research – Conducting thorough market research can help you determine which business opportunities are viable. Experienced consultants can help you identify your target customer so you can design the right marketing strategy to reach them.
  • Copywriting Assistance – Many entrepreneurs have a great product or idea, but lack the writing skills needed to effectively advertise it in their business plans or online marketing materials. A business plan copywriter can help you create a compelling marketing message that resonates with your target audience.
  • Startup / Growth Opportunities – If you’re thinking about starting a business or expanding your established business, it’s important to consider all of the potential opportunities before diving into something that may not be feasible for your current situation. A business plan consultant can help you identify what makes your business idea unique and how you can capitalize on those opportunities.
  • Business Plan Review – Once you’ve completed your business plan, it’s important to have it reviewed by an expert. They can identify any gaps or mistakes in logic that could affect how potential lenders or investors perceive your business idea.

As with any decision affecting your company’s future, you should take the time to explore all of your options before committing to a specific service provider. The goal is not only to find the best fit for your budget and needs but also to find a business plan consulting service that can meet your expectations and deliver quality content on time and within budget.

Is It Worth It To Use a Professional Business Plan Writing Service?

As with anything else, you’ll get what you pay for. If you are short on time or don’t have the writing skills required to write a business plan, it may be worth considering a professional writing service. These services can help you complete the necessary research and planning to get a comprehensive business plan written for your company.

How Growthink Can Help Your Business

Since 1999, Growthink has developed thousands of business plans for entrepreneurs and business owners to start and/or grow their businesses. From small business owners to Fortune 500 companies, we have provided a variety of business plan services to meet the needs of each client.

Our business planning services include:

  • Business Plan Consultants – Our experienced business plan consulting team has helped numerous businesses from small businesses to multi-million dollar corporations identify new opportunities and develop their business plans using existing information where possible, or by conducting new research as needed.
  • Business Plan Writing Services – Our business plan writers are experienced professionals who are committed to providing you with a business plan that delivers results. Depending on your needs, our business writers can either help you complete the research and writing process, or write your business plan for you from start to finish.
  • Done For You Market Research – Our market research team can conduct independent market research for your business through access to several market research databases. Utilize this research to help you write a business plan that is more in-depth and gives you a distinct advantage over competitors in your industry.
  • Private Placement Memorandums – Growthink’s experienced business consultants can help you prepare a private placement memorandum (PPM) that is tailored to the unique needs of your business. PPMs are used to help businesses raise capital from accredited investors.
  • Growthink’s Ultimate Business Plan Template – Our simple business plan template is available in MS Word and when completed can be sent to investors and lenders in Adobe PDF format. Use this business plan template to help you focus your business concept on the information that is most relevant for lenders and investors, while also providing a flexible foundation for future growth.
  • Business Plan Writing Help Center – We have a wide variety of free resources for business planning on our website. Use our selection of 200+ business plan examples to help you write a business plan specific to your industry or learn more from our selection of business planning and funding articles.

No matter what product or service you choose, we wish you success in your business venture

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Business Startup Costs: The Ultimate Guide (2024)

More people are thinking about starting a business than ever before. In fact, nearly 5.4 million businesses were started in 2021, so how much does it cost to start a business?

The answer is different for every business, but many small business owners spend less than $5,000 on startup costs. We’ve talked to a ton of small business owners about how to start a business and we’re going to share what we’ve learned from them.

We’ll break down the business startup costs into upfront costs, one-time costs, and recurring expenses for each type of business. Let’s look at how we classified each type of cost.

Typical business startup costs

We’ve broken down the startup costs into fixed costs and variable costs. We’ll discuss each below.

Fixed Costs

Fixed costs are business costs that do not change as sales increase. The following items are common startup costs that are fixed costs:

  • Office Space (Recurring) : This includes both rent and utilities. Most small business owners start with home office space and deduct the percentage of space from their taxes as a small business cost.
  • Legal Fees (Upfront) : These are recurring costs that you have to pay to run a business legally, which usually include business formation, business licensing, and other professional fees to comply with regulations.
  • Software Costs (Upfront and Ongoing) : These business startup costs include payment processors, websites, CRM, accounting software, and more. You can find some that would be one-time costs, but most are recurring charges.
  • Equipment Costs (Upfront) : This includes machinery, vehicles, and other costs to meet the mission critical aspects of the business.
  • Insurance Costs (Upfront and Ongoing) : If your business requires insurance, make sure to keep it continuous. If it doesn’t, you may want to consider it anyway.

As time goes on, some businesses may find that a few fixed costs only remain fixed up to a certain volume. After that, they might see a drastic increase to add more volume and then it will become a fixed cost again. Adding a second service truck is one of the typical costs that work like this.

The other type of small business startup costs are variable costs, which we’ll discuss next.

Variable Costs

There are business costs that vary based on the volume the business does. These startup costs are called variable costs. Common startup costs in this category include:

  • Shipping Costs (Variable Expense): Shipping costs are included in variable costs because you only pay for them if you order materials or ship products to a customer.
  • Marketing Costs (Ongoing Costs) : The Small Business Administration suggests spending approximately 8% of desired revenue on marketing. The advertising costs seem to be one of the defining factors as to whether a business succeeds long term.
  • Material Costs (Varies): The time and materials that go into offering a product or service will affect your revenue.
  • Supplies and Packaging Costs: Items you use for running the business must be considered early in the game. This startup cost may include computers, cleaning supplies, business cards, packaging for products, and other items that help your business.
  • Wages: Most wages will vary with the amount of business you have. You have to pay employees for their time regardless, but you’ll schedule less hours when you have less business.
  • Unexpected Costs: You should always leave a little wiggle room for unforeseen events. I’d suggest at least a 10% slush fund for unexpected startup costs and operating costs.
  • Other Costs: This is a catch all for spending you can forecast, but are not sure which cost categories to include them in.

Now that you know the costs we’ll be analyzing, let’s look at the average start-up costs for businesses.

How much does it cost to start a business?

I broke down the average costs of starting a business into four different classifications:

  • Low Cost: start a business with a shoestring budget and figure out the ongoing expenses along the way.
  • Average Cost: start a business with the money to cover the first year of organizational expenses.
  • High Cost: business owners interested in the startup costs to guarantee they stay in business for five years.
  • Franchise: business owners who want to buy a franchise.

H ow much does it cost to start a small business?

According to the Small Business Administration , one out of every four businesses start with less than $5,000, and over half of small businesses have startup costs of under $25,000. But the median is just over $24,000, and the weighted average would be between $72,000 and $276,000. 

How much does it cost to start an online business?

Online businesses are normally some of the lowest in cost to start. You can start most of them for under $1,000 without any educational expenses.They require a computer, internet, business licensing, and some software. Businesses in this category might include:

  • E-commerce stores
  • Graphic design
  • YouTube content creators
  • Virtual assistants
  • Marketing agencies
  • Software developers

When people ask “how much does it cost to start a business online?” search results will normally provide answers about ecommerce stores. We’ll discuss those next.

How much does it cost to start a t-shirt business?

T-shirt companies are fairly easy to start. For example, you can start with a $30 Shopify, some design software, and a print-on-demand provider. If you really want to make money on it, you have to get good at SEO and marketing, which will increase your costs.

Check out our interview with the owner of Urbanity to learn more:

How much does it cost to start a landscaping business?

We’ve interviewed multiple business owners who have started landscaping companies. It’s one of the easiest types of businesses to start. You can even start a business for as little as $300. 

The table below shows the breakdown of the business expenses a small business owner should expect when starting a landscaping business.

Check out our most recent YouTube video with a small business owner who started Plan-It Vision with only $300:

How much does it cost to start an eyelash business?

An eyelash business is one of the most commonly searched small businesses. To get started, you may need to go to cosmetology school. Many states require school , but some do not.  If you haven’t already gone to cosmetology school, starting a small business will cost more than $20,000. 

Most eyelash small businesses run as a combination of brick and mortar business and traveling to their client’s location. We’ve provided you with estimates of how much to expect startup expenses to cost based on the assumption you haven’t already gone to cosmetology school.

Subtract $20,000 from any of these numbers if you have already gone to school. I included legal fees and insurance costs in the low cost startup funding because you don’t want your new business to be slapped with a major fine for operating illegally.

H ow much does it cost to start a cleaning business?

Cleaning businesses are great for startups. You can even start your own business for as low as $300 if you just buy the cleaning supplies. Almost all the costs are variable expenses. 

However, you should get the business license and the insurance as soon as possible if you decide to get them after you get started. The ultra low cost way assumes you rent any equipment after booking a job that needs equipment.

Check out our interview with Christopher Mondragon below or sign up for our cleaning business course that covers pricing, business credit, Chris’s marketing scripts, and automation templates:

H ow much does it cost to start a jewelry business?

Many people enjoy doing arts and crafts like making jewelry. You can start a business out of this fun hobby for less than $100 and build your business as you grow. Premade findings are typically more economical, but creativity is often the joy of this type of business owner, so you might want to make your own pieces.

If you are trying to make gold and silver jewelry, you can expect the cost to be much higher. A troy ounce of gold varies based on market conditions, but has been between $1,000 and $2,000 over the last 15 years. It will only make about five to 16 rings, and you still have to have the tools to melt it. 

H ow much does it cost to start a storage unit business?

The answer to this isn’t particularly clear cut. If you are wanting to buy storage units that are selling people’s stuff to recoup the costs, you should plan to bring at least $500 to the auction. Then, hope you find a gem and recoup your investment.

If you are talking about building storage units and renting them out, you’ll need to:

  • Buy land (acres range from $1,600 to millions, with an average of $12K over the continental U.S.
  • Build storage space for $25 to $45 per square foot.
  • Run the property for $2 to $4 per square foot of operating expenses. 

Check out Love to Know’s blog for more detailed information.

H ow much does it cost to start a food truck business?

You might be able to start a food truck for as low as $10K, but I’d expect to spend more like $20K to get started. You’ll probably need around $156K to make it through the first year and around $670,000 to make it through the first five years.

If you figure out a winning recipe, it can lead to a million dollar business, though.

Check out our video below to find out how Saied Samaiel makes more than $600K per year with his food truck:

H ow much does it cost to start a dropshipping business?

The cost of starting a dropshipping business can vary dramatically because you may have to design a product and purchase inventory. If you are using print-on-demand with dropshipping, it is often fairly cheap. 

Expect to spend at least $80 getting started, but if you are sourcing materials and manufacturing, it could be more than $30,000 to make your products. Through the course of a year, you might spend up to $180,000.

Check out our interview with Casey about how he created and dropships Shed Defender:

How much does it cost to start a candle business?

You can start a candle business for less than $200. The materials and a Shopify account are all you need to get started. The numbers below are from our interview with Jazmin who started the company in 2020 and is making more than $150K per year.

Check out our interview below:

How much does it cost to start a towing business?

A towing business can be started for under $10,000. It has special licensing requirements that raise the cost and most people don’t own a tow truck. You can typically make around $100,000 per truck––if you do it right. 

Check out our interview with a towing company business owner to learn more:

How much does it cost to start a painting business?

You should expect to spend $5,000+ to start a painting business because you’ll need a contractor’s license in most states to start a painting business. Contractors’ licenses have financial requirements that make them more expensive. States may require:

  • Background checks
  • Surety bonds
  • Multiple years of experience 
  • Licensing exams

How much does it cost to start a detailing business?

You can start a mobile detailing business for as little as $300, but you should probably expect the annual costs to approach $53K to really grow. That includes licensing, insurance, a vehicle, upgrading your website, and spending $2K per month on marketing. Check out the breakdown below:

H ow much does it cost to start a trucking business?

Trucking businesses will normally cost around $10,000 to start in-state or $20,000 for interstate operations, but you can expect to spend $100K to $250K per year to run a trucking business. 

Make sure the truck you buy is less than 10 years old because most companies require a newer vehicle when hiring you to haul their products.

Check out our interview with Mikael Sant. He averages $75K a month running Sant Lines LLC:

How much does it cost to start a taxi business?

Taxis are a dying business in most places. The business structure is antiquated. You have to register with your city’s transit authority, hire dispatch, and buy a bunch of taxis. We’ve provided an estimate for starting with five taxis running 24 hours a day.

If you already have a car, you can start driving for Uber or Lyft. All you have to do is get a business license, pass a background check, and have a current car inspection. You can run a successful business fairly easily. The startup costs for this kind of business is around $300.

How much does it cost to start a laundromat business?

Starting a laundromat can cost nearly $1 million to get started and about twice that over the first five years. The building, equipment, and utilities are most of the cost.

Check out our interview with Justin Pike of Ferndale Laundry:

How much does it cost to start a photography business?

You can start a photography business for as little as $500, which includes the price of the camera, a website, online photo gallery, and Adobe Photography Suite.

If you want to upgrade to a higher end business with better equipment and a good marketing budget, you should expect to spend around $45,000 the first year. It’s even higher if you want a good studio, however.

Check out our interview with a couple that started their own photography company:

How much does it cost to start a handyman business?

Most places require handymen to be licensed contractors, so you can get started for as low as $2,750 without risking violating laws, but you can expect to spend around $40,000 during the first year if you really want to do it right.

Check out our interview with Caleb to find out how he makes $125K per truck:

How much does it cost to start a soap business?

Soap businesses are fairly inexpensive to start. You could start making soap for under $100 and build from there. Successful business owners will spend nearly $70K in their first year of business to make around $200K. Check out the TruIC blog for the steps to start a soap business.

Small Business Owners Funding Resources

Now that you know the costs associated with starting a business, check out some of our resources for finding funding. 

  • Business Credit : Check out our preferred lending partners to get small business loans or a business credit card.
  • Business Hub : Learn how to start a business entity, get insurance, and estimate a company’s revenue in our hub .
  • Small Business Administration : Get information from the SBA on grants, loans, and local business resources.
  • Evaluate Funding Options : Whether you are using a personal savings account or looking for alternative funding methods, check out our funding blog .

What Type of Business Will You Start?

We’ve covered the typical expenses associated with the costs of starting a business. Now it’s time to examine your personal expenses and cash flow to cover the filing fee and other business costs.

Make sure to follow our YouTube channel and blog for more great information on how to start a business.

Which business do you think is a worthwhile investment? How will you manage the financial implications of starting a new business? 

Brandon Boushy

Brandon Boushy lives to improve people’s lives by helping them become successful entrepreneurs. His journey started nearly 30 years ago. He consistently excelled at everything he did, but preferred to make the rules rather than follow him. His exploration of self and knowledge has helped him to get an engineering degree, MBA, and countless certifications. When freelancing and rideshare came onto the scene, he recognized the opportunity to play by his own rules. Since 2017, he has helped businesses across all industries achieve more with his research, writing, and marketing strategies. Since 2021, he has been the Lead Writer for UpFlip where he has published over 170 articles on small business success.

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How Much Does It Cost to Write a Business Plan?

AUG.27, 2020

how much does a professional business plan cost

Experienced and aspiring entrepreneurs often ask about the business plan cost  plantation , “ how much does a professional business plan cost ?” Well, the answer is not as cut and dry as you would think. The business plan writing services cost  varies greatly depending on the type of program you are seeking. Some plans are quite straightforward and require no more than a single financial worksheet.

On the other hand, how much does a professional business plan writing services cost  can of more than fifty pages and have financial projections for several years? It would be best to decide the type of program your organization needs to determine the business plan writing services cost .

You may come across tons of people who write their business plans without assistance. They do so to save money and to ensure the program matches their preferred timeline. However, acquiring expert help could be an excellent long-term investment. Why? Because people skilled in creating business plans know the ins, outs, and technicalities of making a foolproof professional business plan cost, ensuring it contains all the necessary details and depth to execute your program the right way.

What Does the Price Depend on?

You might be asking yourself, “what does the cost of a business plan ?”. As mentioned earlier, the business plan cost liest varies significantly depending on who is writing it. Every business needs a comprehensive plan to get started. Almost every program differs in detail, length, style, dimension, and industry – these are essential elements that make up a cost of a business plan .

For example, a staffing agency generally requires thorough recruitment strategies in their business plans, especially when compared to a single operator and owner businesses like financial planning. Individual variations play a critical role in determining a plan’s price. The more details, research, and time a program requires, the higher its price could get. Let us look at some other factors that impact a business plan’s price:

  • Are you planning to choose a service provider ( auditor, lawyer, tax accountant) or a professional business plan consultant to create your program? Of course, the fee will be higher if the consultant has more skills and experience.
  • Quality requirements also play a massive role in deciding the plan’s price a semi-professional business plan writing services cost  less than a seasoned pro.
  • When deciding the price, business plan writing services cost factor in the program’s difficulty level (location, capitalization, turnaround plans, continuation type of organizational activities, etc.) when deciding the price.
  • Some entrepreneurs request special requirements (specific evaluation procedures, additional items, etc.) in their business plan. These aspects increase the program’s price.
  • Your business plan cost could be higher if you ask for additional consultation (marketing consulting, calculation consulting, coaching the founders, etc.)

Typical Cost of a Business Plan

As discussed earlier, how much does a professional business plan costs differ between the degrees of difficulty and length and service providers? However, if you are snooping for typical rates, it would help to know that these prices could be as low as $500 and as high as $15,000. Some agencies and solo plan creators even charge higher, especially if your business program is complex.

Hiring a traditional consulting service to write your company’s business plan cost   would be the best choice and make the most sense. Why? Because while hiring someone to create a business plan might be business plan cost ly, it will benefit your company in the long run. With your operations and procedures aligned, your organization will become a profit-generating machine, thanks to a well thought out and professionally made plan.

Remember, consultation and the scope of your work play a critical role in determining a plan’s price, so it would be best to keep these elements in mind before hiring someone to write the plan. Some consultants also charge fees by the hour, and you’d be shocked to learn that the business plans for some corporations can business plan writing services cost  anywhere between twenty-five to fifty thousand dollars.

However, if you are a small business owner, there is no need to worry as you will find a service or consultant within the budget of your business plan preparation fees.

professional business plan cost

Formatting of Professional Business Plan

Fortunately, there is no wrong or right way to create a business plan. The needs of your business take center stage no matter how your format your company’s plan. Most business programs fall into the following categories:

Traditional Plans

These business plan types are quite popular. They utilize a standard structure encouraging you to provide details about essential sections of your organization. The most traditional business plan cost of a business plan  contains dozens of detailed pages and require more time to prepare.

A traditional business plan might be suitable if you want to focus on details and create a comprehensive program. You don’t have to stick to a particular outline when creating a traditional business plan. However, it would be best if you discuss the following elements:

  • Executive summary (include a mission statement, service or product details, information about the company and its employees)
  • Description of the company
  • Market analysis (discuss the target market and industry outlook with authentic stats and research)
  • Management and organization (explain your business’s legal structure and the people responsible for running it)
  • Product or service line
  • Sales and marketing (talk about how your strategies will achieve sales goals and how you will market your product)
  • Request for funding (outline your organization’s funding requirements by explaining why you need it and how you will return it)
  • Financial projections (use this section to convince readers that your company will succeed financially)
  • Appendix (provide requested documents and materials like permits, legal documents, patents, licenses, letters of reference, product pictures, credit history, etc.)

Lean Startup Plans

Lean startup plans are not as common as traditional business plans. However, their structure is also pretty standard. They only summarize the most critical points of your program and require minimal preparation time (an hour or two maximum.) Some lean startup plans even end within one page.

People looking to start or explain their business quickly should use these plans. They are incredibly flexible and can describe your company’s value proposition, finances, customers, and infrastructure through straightforward charts. Here is a list of things you must incorporate in your lean startup plan:

  • Partnerships
  • Key activities
  • Resources (assets, intellectual property, staff)
  • Value proposition
  • Relationship with customers
  • Customer segments (describe your specific target audience)
  • Communication channels
  • Cost structure
  • Revenue streams ( how you plan to make money)

Are you an aspiring entrepreneur looking for professional business plan writing services cost ? Look no further than OGS Capital ! We have been developing business plans for large and small organizations for a while, providing strategic guidance and advice to improve profitability. Get in touch with us, and our highly experienced team will help create a unique plan tailored for your business’s goals and aspirations.

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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How Much Does A Business Plan Writing Cost?

If you’re considering finding financing for your next business venture, a business plan is a crucial part of the application process. It will show potential lenders that you’ve done all the research and planning needed to make sure it’s successful, so they can rest assured knowing their investment in this new venture has good odds of turning into gold!

A business plan will cost you an average of $2,500, depending on the size of your company and the industry you’re in.  If you plan on writing your own business plan, there is software that can assist you for $20/month up to $300/month, depending on the software features and the amount of assistance you need.

You can choose to use a business plan writer that will cost you anywhere from $1,000 to $3,000 depending on their expertise and how in-depth you need your business plan to be.

Another option is to use a consultant company to create your business plan. The price for this will be from $5,000 to $15,000, depending on how many layers your organization will have and the amount of groundwork required to execute your plan.

Average Cost of Business Plan Consultants

How much does business software cost.

There is a couple of free business plan software that makes it easy to write a business plan. However, while this tool is quite detailed and has the instructions on how to fill out the plans, they are quite basic in design.

If you want a business plan software that has a professionally designed layout and color charts for financials, you can buy the software. Many business plan software packages include teaching components and several template pages in case you get stuck on a section. The package may also include features that calculate growth and sales projections based on real figures. A business plan software such as Palo Alto Software offers a variety of features and offers a monthly fee of $20 per month.

This software allows you to write over 500 sample business plans and over 9,000 industry profiles that to support your plan. The software not only helps compile data, research, and write the actual business plans; they also offer a dashboard for monitoring your business health. You can also track financial data, along with your sales goals and budget, so that you can make the necessary adjustments.

Should You Write It Yourself? 

The cheapest way to get a business plan is to compose it yourself. Maybe you think you don’t need a consultant or software for writing a business plan. If you are looking to seek a capital investment of less than $200,000, you may want to consider writing the business plan yourself after reading some books or taking a class, or getting coaching from someone who has written successful business plans.

You should consider taking a business planning class through Small Business Association (SBA) or SCORE. Even if you decide not to write your own plan, you can get a much better idea of what you want out of a business plan and what to expect.

One of the most important jobs of an entrepreneur is time management and performing the task they are best skilled for. Many businesses decide to use software or hire a consultant to do their business plans, mostly because they can’t afford the learning curve to be able to create an in-depth business plan that will meet the needs of investors or lenders.

Some of the reasons to consider hiring a business plan consultant include:

  • Business planning is completed much faster with a professional who knows the process. Every entrepreneur’s intention is to get plans completed, but several months later, they still haven’t done the work. Business planning work should be a high priority, but it’s quite difficult to get to it when you have a more pressing matter at hand. The sooner you complete the plan, the sooner you can start getting funds for your business. Overall, the price of hiring a consultant may be small.
  • With a professional business plan consultant, your project will be completed in a way investors and lenders will respect. Business consultants understand how finance people look at plans and what they would love to see and what to play down to get the funding your business needs.
  • Business consultants offer objectivity that will allow for unbiased projections and expectations for your business. They will be much more objective in the process, which will less likely make it that your business will have problems after receiving funding.

However, if you are looking to keep start-up costs as low as possible and ready to do some of the initial leg work, you can opt for a business plan software. The reason to use a business plan software include:

  • Well-made business plan software can use the raw substance of your ideas and organize them into a standard plan template.
  • Business software offers the ability to customize the appearance of your plan and use terms particular to your business.
  • Business plan software breaks down highly complex processes in steps that are easy to understand.
  • The software can do a better job at protecting your data than you would on your own because most business software has a cybersecurity firm that manages all of their client’s data.

All the options listed above are good, but if you are trying to decide on the best, you have to determine your need for the business plan and the amount you can afford to spend on the plan. Of course, you don’t have to choose just one of these options.

Why Use A Writing Service?

There are many reasons why people decide to outsource their business plan to a writing company or consultant, including lack of time or writing skills. 

It can also be a way to help your company get started the right way by getting the knowledge and insight from someone that has been in business for years.

If you are unsure what path is right for you, the following information will be sure to help! We will explore what goes into a business plan and how much it costs to create one. Let’s get started!

If your business plan looks as if it is going to be more complex, you may want to hire a business consultant professional consultant to do the job for you. The business consultants will be able to ask you questions about your business and guide your thinking so that you can create a comprehensive and well-detailed business plan that best meets your needs.

For instance, Ground Floor Partners, professional business growth consultants, quote their charges for business consultancies as ranging from $5,000 to $20,000, depending on the complexity of the business project.

These figures are usually based on their hourly rate, and some other special services may be included. Companies like Thumbtack also match entrepreneurs with business plan professionals, and the average rate for a business plan consultancy service ranges from $70 to $120 per hour. They will not only write the business plans but also review plans and make recommendations based on the completed work.

Software That Helps Write a Business Plan

There are also many apps and software that can assist you with writing a business plan on your own. Apps such as Business Plan Pro For Windows can help you write professional business plans for low monthly charges!

These apps will run you anywhere from $20 per month to $300 per month.  

The cost of the app will largely depend on the level of assistance you need and the software features. Apps can be a great way to help you create an effective business plan without needing to hire a professional, but they’re not 100% done for you.

Apps have disadvantages as well. One drawback is that you have to sign up for a subscription most of the time, which isn’t necessarily saving you much more than just hiring someone to create your business plan.

Another is that some apps are restricted by geographical location or do not offer free trials for their products.   

Also, if you are looking for detailed guidance with your business plan creation, then you might be better off hiring a professional service.

If you’re unsure of your future goals and aren’t sure how you want to operate your business yet, then hiring a professional may be in your best interest.

There are also many other benefits to hiring a professional, such as having someone that can hold you accountable for your goals, writing a clear and concise plan, and seeing the bigger picture.

Why Do I Need A Business Plan?

A business plan lays out the foundation of a company and acts as a road map for its future. Businesses often develop a general or high-level business plan early on during their start-up phase.

They may also create more detailed plans that include supplemental information such as marketing strategies and sales forecasts depending on how funding is needed and the stage of company growth.

To effectively plan for the future of a business, companies typically research their market and competitors while identifying objectives and goals.

A company may also use past performance to determine industry trends. The information collected is then formulated into a practical blueprint for growth that can be used to make informed decisions in day-to-day operations and long-term strategies.

Now that you know how you want to create a business plan, let’s discuss what you can use a business plan for. A business plan can be used in many different ways by different people.

One of the most common uses is when trying to apply for a loan, but that’s not all a business plan can come in handy for. Business plans are also good to have when seeking out new clients. It shows them how much time and effort you have put into your business and how successful you hope it will become.

When To Write A Business Plan

If you are thinking of starting a new business or if you are going to be applying for a business loan, an excellent place to start would be the creation of a business plan.

If you are applying for a loan, you must have a solid business plan according to the bank’s requirements.

Most banks require that any new business have access to at least three years of financial information to establish credit.

Once you have established this track record, you will be able to take out loans and venture capital when starting new businesses or expanding your company.

It is also essential to have a business plan if you want to go into business with somebody.

You can draft a partnership agreement that may include future plans for the business or salary for each business owner. A business plan should also be a requirement if you are looking to expand your company overseas.

You can use your business plan to attract investors overseas and provide them with information about what they will be gaining from the deal. This plan will also give you a route to follow to turn your business dream into a reality.

Types of Business Plans

There are different types of business plans that you can draft depending on the goal you want to achieve.

A business plan will typically be broken down into two or three different types: a startup plan, a long-term strategic plan, and a marketing plan. Here is one way to break them down:

Startup Plan

The first plan that a new business will draft. This plan is a high-level overview of a company and how it intends to run.

This type of plan may include details about your objectives, goals, significant milestones, sources of funding for the business, and your marketing strategy.

This type can be created by the individual founder(s) or outsourced to a business plan writing service to draft the plan for you.

Long-Term Strategic Plan

In this case, companies need to have a solid foundation to work from.

This plan is more detailed than the startup plan and will usually be created by a consulting firm. 

It focuses on how a company can grow and what it needs to do to meet its objectives.

This type of plan will often outline deadlines, budgets, product or service roll-out strategies, staffing levels required for each department, and revenue projections.

Marketing Plan

The marketing plan is more of a supplemental document that is used to complement the business plan.

Companies typically use this type of document when looking for funding or trying to sell their product/service.

This document will often include market trends, sales strategies, advertising and promotions plans, pricing strategies, and marketing campaigns.

Depending on the types of funding being sought out, a company may decide a consultant or professional writing service is their best option to have a better chance at securing funding.

What Should Be In My Business Plan?

If you are wondering what should be in a business plan, several components make one complete.  We will outline what elements your business plan will need to contain to be a complete and actionable plan.

Executive Summary

The first thing that is included in your business plan is the executive summary. This part of your business plan serves as its introductory statement, so you want it to be catchy enough for someone to read on.

One effective technique for an executive summary is using a customer story or success story.  This helps establish yourself as more credible because investors like companies that have proven success.

Product Or Service

This is probably the most important and most time-consuming aspect of your business plan. You need to demonstrate that you have a product or service that people will actually want and pay for.   

If your product or service does not solve a problem, no one will use it. Make sure you list what problems your company solves clearly and concisely so potential investors know exactly why they should do business with you.

Market Analysis & Financial Plan

Next, you will go into more detail on how much money you will make off of this venture within the next few years.  You must put together both an income statement and a cash flow projection for this portion of your business plan.   

In addition to the financial plan, you should also include how much money you need to start and run your business for a certain amount of time.   

Capacity And Order Quantities

This heading will discuss the number of units that can be produced or supplied by your factory or other sources, as well as the number of customers you can serve.   

By going into detail about your capacity and order quantities, potential investors and buyers will be able to know what type of revenue they could potentially expect from your company in a given amount of time.

The next aspect that should be included in your business plan is an effective marketing strategy. Your marketing plan is essentially your sales strategy, so this section needs to be strong for you to get the amount of revenue you want out of your business venture.   

You should also include information like how much money you will spend on marketing tools and where that money will come from.  

Physical Location And Facilities

This section will discuss what type of physical location or facilities your company will need to operate effectively and how much it will cost you.

If you do not have the necessary space or facilities for running your business already, you will need to explore options like buying or leasing commercial office space.

Management Team

The next aspect of your business plan is an overview of how capable your team is. If you are new to running a business or lack depth in certain areas, it may be wise to hire a management team. If this is the case, make sure to include what types of skills your managers have.

Financial Responsibility

This part will give a quick rundown on who is responsible for all of your finances and how you plan on dividing responsibilities between yourself and your employees.  

Be as transparent as possible and show how much everyone is expected to contribute financially to the venture.   

The next part of your business plan discusses the long-term goals or benefits you expect this business will bring you and your partners.  

Do not forget to include your vision of where your company will be in five years, as well as how it will positively affect your life. 

Start Your Dream Business

As you can see, creating a business plan does not have to be complicated or expensive. You may use an app, website, or consulting company to create your plan and do not need to do everything yourself.

However, if you are looking for the best results, it is wise that you hire either a business plan writer or consulting company. They have the experience and knowledge needed to create a professional and successful business plan.

In addition, they will be able to create a well-organized and complete plan while you work on building your dream company!

Brent McOlson is not your typical small business owner. He's a seasoned entrepreneur and a true maestro in the intricate world of business operations. With a remarkable career spanning over two decades, Brent has amassed a treasure trove of experience and expertise that has been instrumental in the success... Read More

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The expense of a business plan varies greatly depending on which kind of plan you need. Some plans could be as straightforward as a executive summary and also a one-page financial worksheet, while some can be well more than 50 pages and contain many years of financial projections. Decide what type of business plan your company needs so as to help ascertain the cost of this strategy.

Hiring a Business Plan Writing Service It’s possible to hire a business plan writing service to write your business plan. More complex plans can range into the high thousands, based upon the firm, the amount of staff members operating on the strategy along with the range of the plan. Costs typically start at $1,500 for more simple projects.

Hiring A Traditional Consulting Company Using a traditional consulting company to write your business plan might make more sense when you are looking to raise a larger amount with your business plan. A lengthy plan with five years of financial projections might still cost a few thousand dollars, however, the total price can be much higher depending on the scope of work and the amount of consulting required. Some traditional consultants charge by the hour and let the customer decide how many hours client can budget for the work. For larger corporate jobs, expect to find costs ranging $25,000 to $50,000.

Our approach at GoBusinessPlans is to custom scope each engagement based on the the specific requirements of each client. Our business plan writing services typically cost between $2,000 and $10,000 depending on the work that needs to be completed.

Writing It Yourself The least expensive way to acquire a business plan usually is to compose it yourself. Purchasing the software to speed up this procedure ranges from $50 to $500, and free resources on the Web can offer both templates and suggestions. The U.S. Small Business Administration offers guides, outlines and blogs, and the SBA’s Business Strategy Tool provides step-by-step assistance in building your plan. For companies with very low startup capital, this can be the ideal option.

Combining Services Another option for businesses looking for a business plan option is potentially doing some of the initial leg work and then working with a business plan company to finalize the business plan.  A business plan can cost less if you do the research and make a draft on your own, and then introduce it to a company or consultant for review and completion. For instance, you could complete the written part of the company plan and have somebody else help with the financials. This is sometimes a good option for entrepreneurs that will articulate their business idea clearly but may need help putting together financial projections that are realistic. Review choices are offered for those who need an expert eye to check at their plan before proceeding.

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Launching a small business almost always involves an initial investment. How much startup funding you need depends on many factors, such as your industry, the products or services or the store location. The cheapest businesses to start may cost as little as $12,000 initially, but other businesses like restaurants can run from $400,000 or more.

The best way to determine your startup costs is to list all expected expenses and the dollar amount for each item. Let’s drill down into the exact dollar amounts to start your business and the types of costs you may encounter.

Key small business cost statistics

  • On average, small business owners spend $40,000 in their first full year. ( Shopify )
  • The least expensive cost is the incorporation fee, which is around $145, while the most expensive can be equipment, typically $11,000 to $125,000. ( Forbes Advisor )
  • 76% of startups without employees used personal funds to finance their business ( Fed Small Business )
  • The top financial challenges for nonemployer startups are inflation as well as meeting operating expenses. ( Fed Small Business )
  • Average hourly pay for an administrative assistant is $22. ( Salary )
  • Average cost to build a website is $200 and costs $50 monthly for maintenance. ( WebsiteBuilderExpert )
  • Average cost of adding a new employee to your payroll usually ranges from $4,000 to $20,000. These costs don’t factor in the employee’s salary and benefits. ( Indeed )

How much does it cost to start a small business?

Industry averages can help give you a general idea of how much you can expect to spend when starting a small business. As your business grows, you’ll need to be strategic about keeping costs low and opting for the most affordable materials.

By keeping costs low, you’ll see the biggest returns on your investment from business products and services. Your actual costs will vary depending on:

  • Size of your business
  • Physical or online location
  • Number of employees
  • Cost of inventory needed
  • Cost to produce goods, such a labor and raw materials

Online business vs. brick-and-mortar stores

Whether you have a physical location or an online-only presence will play a significant role in your business overhead costs. For example, an online store could cost you around $2,000 to $20,000 to build, based on Shopify data . That range estimates the cost of hosting and designing a custom e-commerce site. The exact cost may be different if you have a leaner or more robust business model.

Your location can also influence small business costs. The 2021 Business Cost Index by Approve found Texas, Oklahoma, and Kentucky are the three cheapest states to run a business. California, New Jersey, and Vermont are the most expensive.

Employee payroll or contractor services

Employees are another big expenditure. According to the Bureau of Labor Statistics , the average non-government employee costs your business $41.03 to $43.26 per hour.

Given that there are 2,080 working hours in a year, the average employee may cost you roughly $85,000 to $90,000 per year, based on the Bureau of Labor Statistics wage. So if you have five employees, you’ll have to project for $425,000 to $450,000 in costs.

Another way to calculate total employee costs is to budget for their salary, employee benefits and taxes. The Small Business Administration suggests estimating employee costs to be 1.25 to 1.4 times their salary. Using that information, an employee with a $50,000 annual salary would cost you between $62,500 and $70,000.

Average cost by industry

Your average startup costs will vary greatly depending on the field or industry you’re hoping to tap into. Your industry will determine your entire business model, your inventory needs, your marketing strategy and your costs to produce your goods or services. Here’s a closer look at a few industry averages:

Types of costs for your small business

While it’s possible to fund your business with little-to-no upfront costs , you will likely encounter many expenses along the way. You’ll want to gauge whether your costs are essential to running your business or an expense that you can hold off until the business is established.

Essential costs vs. optional costs

Although there are some expenses you can do without or delay, others are unavoidable right from the start. In general, they include expenses such as:

Common essential costs

Common optional costs.

  • New, rather than used or leased, equipment
  • Extra office space
  • Luxurious business trips and entertaining
  • Social media influencers
  • A CPA when you can use accounting software instead
  • Excess inventory

Fixed costs vs. variable costs

You will find that some of your expenses won’t change from month to month. Others will vary, coming up once or occasionally throughout the year. To ensure that you have enough funds to cover all of your necessary fixed and variable costs, plan ahead.

Common fixed costs

  • Insurance premiums
  • Property tax
  • Essential workers salaries
  • Internet and cell phone bills
  • Loan payments

Common variable costs

  • Packaging and shipping
  • Raw materials
  • Commissions
  • Credit card payments and interest
  • Consultants

Average small business costs

Whether you’re starting from scratch or expanding your business, you want to get detailed about the business costs and amount you expect to spend. Having an organized business budget can help you plan for these costs and account for any revenue changes that come your way. Here’s a look at how much you can expect to spend on your fixed and variable costs.

Average fixed costs

When adding up business costs, don’t forget depreciation, which is the value that your physical business assets lose over time due to age or use. You want to include this cost because it affects your business’s overall net worth when comparing its assets versus liabilities .

Average variable costs

How to save on costs and fund your startup.

Businesses can save on startup costs by paring back business expenses to free up extra revenue, or they may opt for a business loan .

Consider trimming your overhead to make your start-up costs manageable. Starting an online business is one way to reduce or eliminate office space and insurance costs and save a little extra while you’re getting your business off the ground. Yet any business can take a hard look at business expenses and cut costs that aren’t necessary to the business’s immediate success.

Business owners can also apply for a startup loan that provides the on-hand cash needed to make products or expand operations. Many business owners take advantage of low-interest Small Business Administration (SBA) loan s or business loans that come from a traditional bank or online lender.

Finally, consider applying for a business credit card to help you cover your costs. Business credit cards typically have fewer eligibility requirements, focusing on your personal credit score when you apply. A business credit card also gives you the benefit of no interest charges if you pay in full regularly. You will get charged interest if you make the minimum payment or go past the payment due date.

Frequently asked questions

How do you calculate start-up costs, what do i need before starting to spend money on a start-up business, what are additional considerations, how do i start a small business, article sources.

We use primary sources to support our work. Bankrate’s authors, reporters and editors are subject-matter experts who thoroughly fact-check editorial content to ensure the information you’re reading is accurate, timely and relevant.

“ How Much Does It Cost To Start a Business? (Research). ” Shopify. Accessed on October 20, 2023.

“ Business Startup Costs: How To Calculate And Budget. ” Forbes Advisor. Accessed on October 20, 2023.

“ 2023 Report on Nonemployer Firms: Finding from the 2022 Small Business Credit Survey. ” Fed Small Business. Accessed on October 20, 2023.

“ Administrative Assistant II Salary in the United States. ” Salary.com. Accessed on October 20, 2023.

“ How Much Does a Website Cost in 2023? ” WebsiteBuilderExpert. Accessed on October 20, 2023.

“ What Is the Cost of Hiring New Employees? ” Indeed. Accessed on October 20, 2023.

“ The Cost of Building an Ecommerce Website: 2023 Guide. ” Shopify. Accessed on October 20, 2023.

“ The 2021 Business Cost Index. ” Tipalti Approve. Accessed on October 20, 2023.

“ Employer Costs For Employee Compensation—June 2023. ” Bureau of Labor Statistics. Accessed on October 20, 2023.

“ How Much Does an Employee Cost You? ” U.S. Small Business Administration. Accessed on October 20, 2023.

“ How Much Does it Cost to Open a Restaurant? ” Restaurant Owner.com. Accessed on October 20, 2023.

“ How Much Does It Cost To Start A Construction Company? (In 2023). ” Starter Story. Accessed on October 20, 2023.

“ How Much Does It Cost To Open a Retail Store? ” Korona POS. Accessed on October 20, 2023.

“ How Much Does It Cost To Start An Art Business? (In 2023). ” Starter Story. Accessed on October 20, 2023.

“ How Much Does It Cost To Start An Entertainment Information Business? (In 2023). ” Starter Story. Accessed on October 20, 2023.

“ How much do small businesses pay in taxes? ” Nationwide. Accessed on October 20, 2023.

“ How much does small business insurance cost? ” Insureon. Accessed on October 20, 2023.

“ How to Create a Marketing Budget for a Small Business. ” Salesforce. Accessed on October 20, 2023.

“ What are the general costs of incorporating? ” Legal Zoom. Accessed on October 20, 2023.

“ How Much Do Y’all Spend on Packaging Materials Per Order? ” Esty Community. Accessed on October 20, 2023.

“ Average Electric Bill For Businesses In the US. ” Integrity Energy. Accessed on October 20, 2023.

“ Flat Rate Shipping — UPS Simple Rate. ” UPS. Accessed on October 20, 2023.

“ 9 Sales Commissions Structures (With Formulas and Examples). ” Indeed. Accessed on October 20, 2023.

“ The Average Cost Per Month for Office Supplies. ” Hearst Newspapers. Accessed on October 20, 2023.

“ Daily business tourism expenses in the United States 2018–2021. ” Lopez, Ana M. Accessed on October 20, 2023.

“ Small Business Development Centers. ” U.S. Small Business Administration. Accessed on October 20, 2023.

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Tim berry on business planning, starting and growing your business, and having a life in the meantime., business plan financials: starting costs.

It’s really important to have an idea of what you need before you start. Continuing with my series on standard business plan financials , startups need to project starting costs. Starting costs set up a starting balance, which is necessary to plan cash flow. And the starting costs are critical to determining whether a startup can bootstrap or needs outside funding. For existing companies that already have financial results, projections start with the expected ending balance of the previous period. But for startups, it’s about starting costs.

Starting costs are essentially the sum of two kinds of spending. You can estimate them both in two simple lists:

  • Startup expenses : These are expenses that happen before the beginning of the plan, before the first month of operations. For example, many new companies incur expenses for legal work, logo design, brochures, site selection and improvements, and signage. If there is a business location, then normally the startup pays rent for a month or more before opening. And if employees start receiving compensation before the opening, then those disbursements are also startup expenses.
  • Startup assets : Typical startup assets are cash (the money in the bank when the company starts), business or plant equipment, office furniture, vehicles, and starting inventory for stores or manufacturers.

A Simple Starting Costs Example

I’ve used a bicycle store as an example in several posts that are part of this series of standard business plan financials. Here’s a visual in spreadsheet form, of sample starting costs for a hypothetical bicycle store.

Sample Starting Costs

Notice that the lists for estimating starting costs, on the left in the illustration above, are matched to another list of starting funding, on the right side of the illustration. Books have to balance, so the initial estimates need to include not just the money you spend, but also where it comes from. In the case above, Garrett had to find $124,500, and you can see that he financed it with Accounts Payable, debt, and investment in various categories.

Another Simple Starting Costs Example

Here is another simple example: the starting costs worksheet that Magda developed for the restaurant I used for a sample sales forecast . Magda’s list includes rent and payroll, the same as in her monthly spending, but here they are included in starting costs because these expenses happen before the launch.

Sample Starting Costs

I included rent and payroll because they point out the importance in timing. The difference between these as startup expenses and running expenses is timing, and nothing else. Magda could have chosen to plan startup expenses as a running worksheet on expenses, starting a few months before launch, as in the illustration below. The launch in this case is early January, so the expenses for October through December are startup expenses. I prefer the separate lists, because I like the way the two lists create an estimate of starting costs. But that’s an option.

Alternate Starting Expenses

The LivePlan Alternative

If you’re a LivePlan user, the LivePlan interface assumes this method and has a more intuitive interface than the spreadsheet version I’m showing in this post. For LivePlan, you start your plan when you start spending, regardless of launch date. So the spending you do for rent and salaries and such, before launch, is part of the flow, as above. Also, LivePlan has its own guided way of helping you figure out what assets you need, how much they cost, and how you are going to finance starting costs, to set up your balance. And the LivePlan cash flow estimator will help you decide how much cash you need, so you don’t have to follow the spreadsheet method here (below).

How to Estimate Your Starting Costs

Obviously the goal with starting costs isn’t just to track them, but to estimate them ahead of time so you have a better idea, before you start a new business, of what the financial costs might be. Breaking the items down into a practical list makes the educated guess a lot easier. Ideally, you know the business you want to start, you are already familiar with the industry, so you can do a useful estimate for most of the startup costs from your own experience. If you don’t have enough firsthand knowledge, then you should be talking to people who do. For others, such as insurance, legal costs, or graphic design for logos, call some providers or brokers, and talk to partners; educate those guesses.

Starting Cash is the Hardest and Most Important

How much cash do you need in the bank, as you launch? That’s usually the toughest starting cost question. It’s also prone to misinformation, such as those alleged rules of thumb you can find everywhere, saying you need to have a year’s worth of expenses, or six months’ worth, before you start. It’s not that simple. For most businesses, the startup cash isn’t a matter of what’s ideal, or what some expert says is the rule of thumb – it’s how much money you have, can get, and are willing to risk.

The best way is to do a Projected Cash Flow while leaving the supposed starting cash balance at zero, which shows how much (at least in theory, according to assumptions) the startup really needs in cash to support the business as it grows, before it reaches a monthly cash flow break-even point. Magda did that to determine the $12,000 needed as starting cash for her restaurant. Note how, in the illustration here, the lowest point in cash is slightly less than $12,000:

Estimating Startup Cash

That low point comes, theoretically, in the third month of the business, March. The low point is $11,609. Obviously that’s just an educated guess, but it’s based on assumptions for sales forecast, expense budget, and important cash flow factors including sales on account and purchasing inventory. So it’s better than a stab in the dark, or some rule of thumb. Just as an example, the total spending with the estimates shown here, the theoretical “year’s worth of spending,” is $182,000 (which you don’t see on the illustration, by the way, but take my word for it). The total for the first six months is $93,000. If Magda sticks to those old formulas, she can’t start the business. She is able to raise enough money, between loans and her savings, to put $12,000 into the starting cash balance. So that’s what she does. Then she launches and continues to have her monthly reviews, and watch the performance of all key indicators very carefully.

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What Are Operating Costs?

Understanding operating costs.

  • Calculation

Fixed Costs

Variable costs, semi-variable costs.

  • Real-World Example
  • SG&A vs. Operating Costs
  • Limitations
  • Operating Cost FAQs
  • Corporate Finance

Operating Costs Definition: Formula, Types, and Real-World Examples

normal cost business plan

Operating costs are associated with the maintenance and administration of a business on a day-to-day basis. Operating costs include direct costs of goods sold (COGS) and other operating expenses—often called selling, general, and administrative (SG&A)—which include rent, payroll, and other overhead costs, as well as raw materials and maintenance expenses. Operating costs exclude non-operating expenses related to financing, such as interest, investments, or foreign currency translation.

The operating cost is deducted from revenue to arrive at operating income and is reflected on a company’s income statement .

Key Takeaways

  • Operating costs are the ongoing expenses incurred from the normal day-to-day of running a business.
  • Operating costs include both costs of goods sold (COGS) and other operating expenses—often called selling, general, and administrative (SG&A) expenses.
  • Common operating costs in addition to COGS may include rent, equipment, inventory costs, marketing, payroll, insurance, and funds allocated for research and development.
  • Operating costs can be found and analyzed by looking at a company's income statement.

Investopedia / Joules Garcia

Businesses have to keep track of operating costs as well as the costs associated with non-operating activities, such as interest expenses on a loan. Both costs are accounted for differently in a company's books, allowing analysts to determine how costs are associated with revenue-generating activities and whether the business can be run more efficiently.

Generally speaking, a company’s management will seek to maximize profits for the company. Because profits are determined both by the revenue that the company earns and the amount the company spends in order to operate, profit can be increased both by increasing revenue and by decreasing operating costs. Because cutting costs generally seems like an easier and more accessible way of increasing profits, managers will often be quick to choose this method.

Trimming operating costs too much can reduce a company’s productivity and, as a result, its profit as well. While reducing any particular operating cost will usually increase short-term profits, it can also hurt the company’s earnings in the long term.

For example, if a company cuts its advertising costs, its short-term profits will likely improve since it is spending less money on operating costs. However, by reducing its advertising, the company might also reduce its capacity to generate new business such that earnings in the future could suffer.

Ideally, companies look to keep operating costs as low as possible while still maintaining the ability to increase sales.

How to Calculate Operating Costs

The following formula and steps can be used to calculate the operating cost of a business. You will find the information needed from the firm's income statement that is used to report the financial performance for the accounting period.

Operating cost = Cost of goods sold + Operating expenses \text{Operating cost} = \text{Cost of goods sold} + \text{Operating expenses} Operating cost = Cost of goods sold + Operating expenses

  • From a company's income statement, take the total cost of goods sold, or COGS, which can also be called cost of sales.
  • Find total operating expenses, which should be further down the income statement.
  • Add total operating expenses and COGS to arrive at the total operating costs for the period.

Types of Operating Costs

While operating costs generally do not include capital outlays, they can include many components of operating expenses , such as:

  • Accounting and legal fees
  • Bank charges
  • Sales and marketing costs
  • Travel expenses 
  • Entertainment costs
  • Non-capitalized research and development expenses
  • Office supply costs
  • Repair and maintenance costs
  • Utility expenses
  • Salary and wage expenses

Operating costs will also include the cost of goods sold, which are the expenses directly tied to the production of goods and services. Some of the costs include:

  • Direct material costs
  • Direct labor
  • Rent of the plant or production facility
  • Benefits and wages for the production workers
  • Repair costs of equipment 
  • Utility costs and taxes of the production facilities

A business’s operating costs are comprised of two components, fixed costs and variable costs , which differ in important ways.

A fixed cost is one that does not change with an increase or decrease in sales or productivity and must be paid regardless of the company’s activity or performance. For example, a manufacturing company must pay rent for factory space, regardless of how much it is producing or earning. While it can downsize and reduce the cost of its rent payments, it cannot eliminate these costs, and so they are considered to be fixed. Fixed costs generally include overhead costs, insurance, security, and equipment.

Fixed costs can help in achieving economies of scale , as when many of a company’s costs are fixed, the company can make more profit per unit as it produces more units. In this system, fixed costs are spread out over the number of units produced, making production more efficient as production increases by reducing the average per-unit cost of production. Economies of scale can allow large companies to sell the same goods as smaller companies for lower prices.

The economies of scale principle can be limited in that fixed costs generally need to increase with certain benchmarks in production growth. For example, a manufacturing company that increases its rate of production over a specified period will eventually reach a point where it needs to increase the size of its factory space in order to accommodate the increased production of its products.

Variable costs , like the name implies, are comprised of costs that vary with production. Unlike fixed costs, variable costs increase as production increases and decrease as production decreases. Examples of variable costs include raw material costs and the cost of electricity. In order for a fast-food restaurant chain that sells french fries to increase its fry sales, for instance, it will need to increase its purchase orders of potatoes from its supplier.

It's sometimes possible for a company to achieve a volume discount or "price break" when purchasing supplies in bulk, wherein the seller agrees to slightly reduce the per-unit cost in exchange for the buyer’s agreement to regularly buy the supplies in large amounts. As a result, the agreement might diminish the correlation somewhat between an increase or decrease in production and an increase or decrease in the company’s operating costs.

For example, the fast-food company may buy its potatoes at $0.50 per pound when it buys potatoes in amounts of less than 200 pounds. However, the potato supplier may offer the restaurant chain a price of $0.45 per pound when it buys potatoes in bulk amounts of 200 to 500 pounds. Volume discounts generally have a small impact on the correlation between production and variable costs, and the trend otherwise remains the same.

Typically, companies with a high proportion of variable costs relative to fixed costs are considered to be less volatile, as their profits are more dependent on the success of their sales. In the same way, the profitability and risk for the same companies are also easier to gauge.

In addition to fixed and variable costs, it is also possible for a company’s operating costs to be considered semi-variable (or “semi-fixed"). These costs represent a mixture of fixed and variable components and can be thought of as existing between fixed costs and variable costs. Semi-variable costs vary in part with increases or decreases in production, like variable costs, but still exist when production is zero, like fixed costs. This is what primarily differentiates semi-variable costs from fixed costs and variable costs.

An example of semi-variable costs is overtime labor. Regular wages for workers are generally considered to be fixed costs, as while a company’s management can reduce the number of workers and paid work hours, it will always need a workforce of some size to function. Overtime payments are often considered to be variable costs, as the number of overtime hours that a company pays its workers will generally rise with increased production and drop with reduced production. When wages are paid based on conditions of productivity allowing for overtime, the cost has both fixed and variable components and is considered to be a semi-variable cost.

Real-World Example of Operating Costs

Below is the income statement for Apple Inc. (AAPL) for the year ending Sept. 25, 2021, according to its annual 10-K report:

  • Apple reported total revenue or net sales of $365.8 billion for the 12-month period.
  • The total cost of sales (or cost of goods sold) was $213 billion, while total operating expenses were $43.9 billion.
  • We calculate operating costs as $213 billion + $43.9 billion.
  • Operating costs (cost of sales + operating expenses) were $256.9 billion for the period.

Apple's total operating costs must be examined over several quarters to get a sense of whether the company is managing its operating costs effectively. Also, investors can monitor operating expenses and cost of goods sold (or cost of sales) separately to determine whether costs are either increasing or decreasing over time.

SG&A vs. Operating Costs

Selling, general, and administrative expense (SG&A) is reported on the income statement as the sum of all direct and indirect selling expenses and all general and administrative expenses (G&A) of a company. It includes all the costs not directly tied to making a product or performing a service—that is, SG&A includes the costs to sell and deliver products or services, in addition to the costs to manage the company.

SG&A includes nearly everything that isn't in the cost of goods sold (COGS). Operating costs include COGS plus all operating expenses, including SG&A. 

Limitations of Operating Costs

As with any financial metric, operating costs must be compared over multiple reporting periods to get a sense of any trend. Companies sometimes can cut costs for a particular quarter, which inflates their earnings temporarily. Investors must monitor costs to see if they're increasing or decreasing over time while also comparing those results to the performance of revenue and profit.

What Is the Total Cost Formula?

The total cost formula combines a firm's fixed and variable costs to produce a quantity of goods or services. To calculate the total cost, add the average fixed cost per unit to the average variable cost per unit. Multiply this by the total number of units to derive the total cost.

The total cost formula is important because it helps management calculate the profitability of their business. It helps managers pinpoint which fixed or variable costs could be reduced to increase profit margins . It also helps managers determine the price point for their products and compare the profitability of one product line versus another.

How Do Operating Costs Affect Profit?

Operating costs that are high or increasing can reduce a company's net profit . A company's management will look for ways to stabilize or decrease operating costs while still balancing the need to manufacture goods that meet consumer demands. If operating costs become too high, management may need to increase the price of their products in order to maintain profitability. They then risk losing customers to competitors who are able to produce similar goods at a lower price point.

What Is the Difference Between Operating Costs and Startup Costs?

Operating costs are the expenses a business incurs in its normal day-to-day operations. Startup costs, on the other hand, are expenses a startup must pay as part of the process of starting its new business. Even before a business opens its doors for the first time or begins production of a new product, it will have to spend money just to get started.

For example, the business may need to spend money on research and development, equipment purchases, a lease on office space, and employee wages. A startup often pays for these costs through business loans or money from private investors. This contrasts with operating costs, which are paid for through revenue generated from sales.

Apple. " Form 10-K, Apple Inc. ," Page 29.

  • Accounting History and Terminology 1 of 35
  • Absorption Costing Explained, With Pros and Cons and Example 2 of 35
  • What Is an Amortization Schedule? How to Calculate with Formula 3 of 35
  • Average Collection Period Formula, How It Works, Example 4 of 35
  • Bill of Lading: Meaning, Types, Example, and Purpose 5 of 35
  • What Is a Cash Book? How Cash Books Work, With Examples 6 of 35
  • Cost of Debt: What It Means and Formulas 7 of 35
  • Cost of Equity Definition, Formula, and Example 8 of 35
  • Cost-Volume-Profit (CVP) Analysis: What It Is and the Formula for Calculating It 9 of 35
  • Current Account: Definition and What Influences It 10 of 35
  • Days Payable Outstanding (DPO) Defined and How It's Calculated 11 of 35
  • Depreciation: Definition and Types, With Calculation Examples 12 of 35
  • Double-Declining Balance (DDB) Depreciation Method Definition With Formula 13 of 35
  • EBITDA: Definition, Calculation Formulas, History, and Criticisms 14 of 35
  • Economic Order Quantity: What Does It Mean and Who Is It Important For? 15 of 35
  • 4 Factors of Production Explained With Examples 16 of 35
  • Fiscal Year: What It Is and Advantages Over Calendar Year 17 of 35
  • How a General Ledger Works With Double-Entry Accounting Along With Examples 18 of 35
  • Just-in-Time (JIT): Definition, Example, and Pros & Cons 19 of 35
  • Net Operating Loss (NOL): Definition and Carryforward Rules 20 of 35
  • NRV: What Net Realizable Value Is and a Formula To Calculate It 21 of 35
  • No-Shop Clause: Meaning, Examples and Exceptions 22 of 35
  • Operating Costs Definition: Formula, Types, and Real-World Examples 23 of 35
  • Operating Profit: How to Calculate, What It Tells You, and Example 24 of 35
  • Production Costs: What They Are and How to Calculate Them 25 of 35
  • What Is a Pro Forma Invoice? Required Information and Example 26 of 35
  • Retained Earnings in Accounting and What They Can Tell You 27 of 35
  • Revenue Recognition: What It Means in Accounting and the 5 Steps 28 of 35
  • What Is a Sunk Cost—and the Sunk Cost Fallacy? 29 of 35
  • Triple Bottom Line 30 of 35
  • Variable Cost: What It Is and How to Calculate It 31 of 35
  • Work-in-Progress (WIP) Definition With Examples 32 of 35
  • Write-Offs: Understanding Different Types To Save on Taxes 33 of 35
  • Year-Over-Year (YOY): What It Means, How It's Used in Finance 34 of 35
  • Zero-Based Budgeting: What It Is and How to Use It 35 of 35

normal cost business plan

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Costs to start and run your business

Learn about common start-up costs and how to determine these costs for your business.

Understand start-up costs

Knowing your start-up costs and creating a realistic budget in the early stages of starting a business is key to starting in the right way. One of the most common reasons a new business will fail is not having enough money to cover expenses, especially in the first 6–12 months. You are more likely to succeed if you plan for expenses early on.

Pay close attention to your initial costs such as fixtures, equipment, office supplies, leasing/tenancy bonds, insurance and accounting or legal fees. Consider including a safety buffer of 10% when calculating your costs.

Seek professional advice

Talk to your accountant, bookkeeper or tax agent for advice on costs specific to your business type and industry.

Common start-up costs

Some of the costs associated with starting a business include:

  • market research
  • preliminary financial advice or general business advice
  • compliance expenses such as the cost of any licences or registrations required
  • tenancy or leasing bond, transfer duty and lease agreement advice
  • telephone and internet
  • power connection and bond
  • marketing and website development
  • equipment, fixtures and fittings
  • staffing and wages
  • initial materials and stock purchases .

Your exact start-up costs will depend on your type of business and industry. For example, a bakery will need to own or lease a shop, while an online business will have website set-up costs.

How to calculate your start-up costs

Check financial statements.

Look up financial statements of publicly listed businesses in your industry, especially competitors and market leaders.

Compare businesses that are a similar size to yours. Remember that larger businesses will often have the advantage of stronger buying power. That means they will be able to negotiate lower prices for goods because they can buy more of them.

Read how to compare your business by  benchmarking .

Talk to industry associations and networks

Before you start:

  • talk to other businesses
  • join industry associations
  • visit websites designed for new business owners and entrepreneurs
  • seek advice from mentors or financial advisers .

Calculate ongoing and one-off costs

Consider any ongoing costs that recur annually, weekly, monthly, quarterly or every couple of years. For example, your rent and power are ongoing costs.

You also need to budget for one-off costs (e.g. your tenancy bond).

Get support and advice

Get support for your new business by:

  • applying for government grants , tax incentives for early stage investors and for research and development
  • visiting Australian Business Licence and Information Service (ABLIS) for licences, regulations, approvals and compliance advice
  • using the Business Launchpad for licences, permits and regulatory information in your local government area
  • attending business events and seminars in your local area
  • watching our free business webinars
  • speaking to an accountant or financial adviser .

Learn more about working with business advisers .

Set realistic expectations

Consider how long it will take to open your business and start making a profit. Set realistic expectations and have a contingency plan if this changes. Make sure your business goals are achievable and your budget aligns with your goals.

For example, a new social media business may set:

  • a realistic goal to break-even for the first 2 years before achieving profitability in year 3
  • an unrealistic goal to have more customers than Facebook in 3 years.

Overestimate costs

It's better to overestimate then underestimate costs. Experts recommend adding 10% on top of your total costs as a safety buffer.

Start-up costs calculator

Use this tool to calculate your total projected monthly and one-off expenses. It will automatically calculate subtotals, totals, and the percentage of the total for each expense. For example, your rent may be 40% of your total start-up costs.

Some costs may not be relevant to your business or you may need to add other items into the calculator.

Also consider...

  • Find information, tips and resources on setting up and managing your business finances from our Mentoring for Growth mentors.
  • Last reviewed: 20 Dec 2021
  • Last updated: 11 Nov 2022

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Will Food Prices Stop Rising Quickly? Many Companies Say Yes.

Food companies are talking about smaller price increases this year, good news for grocery shoppers, restaurant diners and the White House.

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Two couples eat at two separate tables in a restaurant.

By Jeanna Smialek and Jason Karaian

Few prices are as visible to Americans as the ones they encounter at the grocery store or drive-through window, which is why two years of rapid food inflation have been a major drag for U.S. households and the Biden administration.

Shoppers have only slowly regained confidence in the state of the economy as they pay more to fill up their carts, and President Biden has made a habit of shaming food companies — even filming a Super Bowl Sunday video criticizing snack producers for their “rip off” prices.

But now, the trend in grocery and restaurant inflation appears to be on the cusp of changing.

After months of rapid increase, the cost of food at home climbed at a notably slower clip in January. And from packaged food providers to restaurant chains, companies across the food business are reporting that they are no longer raising prices as steeply. In some cases that’s because consumers are finally pushing back against price increases after years of spending through them. In others, it’s because the prices that companies pay for inputs like packaging and labor are no longer rising as sharply.

Even if food inflation cools, it does not mean that your grocery bill or restaurant check will get smaller: It just means it will stop climbing so quickly. Most companies are planning smaller price increases rather than outright price cuts. Still, when it comes to the question of whether rapid jumps in grocery and restaurant prices are behind us, what executives are telling investors offer some reason for hope.

Some, but not all, consumers are saying no.

Executives have found in recent months that they can raise prices only so high before consumers cut back.

The soda and snack maker PepsiCo had raised prices by double-digit percentages for seven straight quarters, and while that streak ended at the close of 2023, PepsiCo still raised prices by 9 percent in the final months of the year.

But all those price jumps on sodas and chips have started to bite. The company recently posted a surprise drop in sales .

Ramon Laguarta, PepsiCo’s chief executive, said on a recent earnings call that the company would be less likely to raise prices beyond “normal pricing levels” — around 2 to 3 percent per year. The firm is seeing milder cost increases on ingredients and is focusing more on keeping sales up, he explained.

James Quincey, the chief executive of Coca-Cola, explained on a recent earnings call that the company had seen a stark divide among U.S. customers: Some are under financial stress and are facing a “real spending power squeeze,” while others “still have plenty of money, plenty of purchasing power” to spend on lactose-free milk and protein shakes.

Walmart, the nation’s largest retailer, reported strong U.S. sales in the fourth quarter, in part as more higher-income households turned to the value chain for grocery shopping.

“We continue to see a customer that’s resilient, but looking for value,” Doug McMillon, chief executive of Walmart, said during an earnings call on Tuesday. He noted that prices for food and consumable products were still “slightly” higher than a year ago.

“Prices are lower than a year ago in places like eggs, apples and deli snacks, but higher in other places, like asparagus and blackberries,” he said.

Companies are seeing a return to normal.

Some companies seem to be following the rest of the economy back to more moderate price changes. Overall inflation, as measured by the Consumer Price Index, peaked at 9.1 percent in summer 2022 but slowed to just 3.1 percent at the start of this year, while food commodity costs like beef , grains and some kinds of dairy have been easing.

“Our pricing broadly is coming down in line with kind of inflation getting back to, what I’ll call more normal levels,” Ian Borden, chief financial officer at McDonald’s, said on a call with investors. (McDonald’s executives also noted that they were seeing some lower-income customers spend less per visit.)

Shake Shack, the burger and ice cream chain, is planning on raising prices by 2.5 percent this year — a return to the sort of increases that were normal before the pandemic, Katie Fogertey, the company’s chief financial officer, said on a recent earnings call .

But she noted that some stores would need to raise prices by more than that to offset increasing costs. In particular, that is true in markets where workers are hard to find and bigger price increases are needed to “offset wage inflationary pressures,” she said.

Such comments underline an important point. Many companies have taken advantage of inflation to pad profits, but for the past several years, some portion of grocery and restaurant price increases has been aimed at covering higher costs. Wages have been rising rapidly in the hospitality and retail sectors, and key ingredients had been expensive amid supply chain problems, Russia’s invasion of Ukraine and bouts of avian flu.

Companies typically at least try to raise prices when the cost of doing business climbs to avoid losing profits. But as wage and input cost pressures begin to fade, companies can stop aggressively lifting prices without risking a hit to their bottom line.

Some firms are turning to technology.

Of course, there is a way to cover higher costs without raising prices: Companies can improve their productivity, so that each worker can stock more shelves, flip more burgers or wait more tables. That is, partly, what Wendy’s is doing.

The fast food chain is rolling out digital menus, hoping they enable “immediate benefits to order accuracy, improve crew experience” and allow for sales growth, Kirk Tanner, the company’s chief executive, said on a recent earnings call .

Wendy’s also plans to try out “dynamic pricing,” he said, using technology to change prices to meet consumer demand. Another company executive suggested that the company expected “low single digit prices” this year.

This all adds up to cooler food inflation.

Taken together, the signs suggest that grocery and restaurant inflation is likely to prove more moderate in 2024 than it was in the previous three years .

Many food-related input costs are either coming down or jumping less aggressively. Wage gains remain elevated in food service, but they are cooling back toward normal. And consumers are beginning to push back on the kind of big price increases that firms were using to pad their profit margins.

Michael Swanson, chief agricultural economist at Wells Fargo, expects grocery inflation to cool to 0.5 percent this year — “much slower than it’s been” — although restaurant inflation could remain stronger as people continue to open their wallets to eat out.

Even there, he said, “it’s going to trend down.”

Jordyn Holman contributed reporting.

Jeanna Smialek covers the Federal Reserve and the economy for The Times from Washington. More about Jeanna Smialek

Jason Karaian is the business news director, based in London. He was previously the editor of DealBook. More about Jason Karaian

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CMS Issues Additional Guidance on Program to Allow People with Medicare to Pay Out-of-Pocket Prescription Drug Costs in Monthly Payments

The Inflation Reduction Act’s Medicare Prescription Payment Plan will allow people to pay Medicare Part D out-of-pocket costs over the course of the year starting in 2025

Today, the Centers for Medicare & Medicaid Services (CMS) released the second part of draft guidance for the Medicare Prescription Payment Plan that outlines requirements for Medicare Part D plan sponsors, including outreach and education requirements, pharmacy processes, and operational considerations, for the program’s first year, 2025. The draft guidance is part of the implementation of President Biden’s prescription drug law, the Inflation Reduction Act, which will help reduce the burden of high upfront out-of-pocket prescription drug costs for seniors and people with disabilities with Medicare prescription drug coverage by allowing them to spread out costs over the year rather than requiring they pay in one lump sum.

“Too many seniors and people with disabilities can’t afford to fill their prescriptions at the pharmacy – and that is unacceptable. Thanks to President Biden’s Inflation Reduction Act, certain Medicare patients will be able to spread their costs across smaller, monthly payments,” said Health and Human Services Secretary Xavier Becerra. “In addition to adding flexibility through a payment plan, the law cuts drug costs through provisions such as caps on out-of-pocket costs and the cost of insulin, and a mandate on drug companies to pay a rebate to Medicare if they raise prices faster than inflation. We are committed to ensuring that all people – including people with Medicare – receive the care they deserve at a cost they can afford.”

“One option under the Inflation Reduction Act is the Medicare Prescription Payment Plan, a program specially designed to help people with high drug costs have more predictable costs throughout the year,” said CMS Administrator Chiquita Brooks-LaSure. “People with Medicare prescription drug coverage should look at the Medicare Prescription Payment Plan as well as our Extra Help program to see what programs are right for them. CMS is continuing to implement the many important provisions of the Inflation Reduction Act on time to help older Americans and people with disabilities afford the care they need.”

Today’s draft guidance provides information on outreach, education, and communications requirements to ensure that people with Medicare Part D, particularly those who are most likely to benefit from this program, are aware of the Medicare Prescription Payment Plan. The guidance complements CMS’ forthcoming national education and outreach efforts to engage interested parties, including pharmacies, providers, and beneficiary advocates, on program implementation and ensure that they have the support and materials needed to communicate effectively on the program.

“Older Americans and people with disabilities who have experienced sticker shock from high prescription drug prices will have the option in 2025 to spread out-of-pocket costs out over the year, rather than paying all at once,” said Meena Seshamani, MD, PhD, CMS Deputy Administrator and Director of the Center for Medicare. “This specifically helps alleviate cash flow issues for people who face high out-of-pocket costs early in the year that may prevent these individuals from taking a drug that could keep them healthy. The draft guidance we have released is a blueprint to help operationalize this program to ensure both health care organizations and people with Medicare are empowered and educated. That way, people in Medicare can make the best choices for their health and financial needs.”

The Medicare Prescription Payment Plan, which goes into effect in 2025, is part of the Inflation Reduction Act’s suite of provisions aimed at lowering prescription drug and health care costs. Other provisions of the law are already helping to lower costs for people with Medicare. On January 1, 2024, the law expanded eligibility for the Low-Income Subsidy program (LIS or “Extra Help”) under Medicare Part D. Nearly 300,000 people with low and modest incomes currently enrolled are now benefitting from the program’s expansion, and 3 million people are eligible for the program but not yet enrolled. In addition, as of January 1, 2024, for some people enrolled in Medicare Part D who have very high drug costs, for the first time, their out-of-pocket costs will be capped at about $3,300 to $3,800 for most people. The Medicare Prescription Payment Plan complements these provisions by allowing individuals to spread their spending over the year rather than paying the total out-of-pocket cost upfront.

CMS is seeking comments from the public on today’s draft part two guidance. The comment period is open for 30 days. Comments received by March 16, 2024 will be considered during development of the final guidance. Comments should be sent to [email protected] with the following subject line: “Medicare Prescription Payment Plan Guidance – Part Two.”

The draft part two guidance builds on the previously released draft part one guidance and fact sheet (released on August 21, 2023). Final part one guidance is forthcoming.

For the draft part two guidance, please visit:  https://www.cms.gov/files/document/medicare-prescription-payment-plan-draft-part-two-guidance.pdf

For the fact sheet on the draft part two guidance, please visit: https://www.cms.gov/files/document/fact-sheet-medicare-prescription-payment-plan-draft-two-guidance.pdf

For an implementation timeline for the Medicare Prescription Payment Plan, please visit:  https://www.cms.gov/files/document/medicare-prescription-payment-plan-timeline.pdf

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More From Forbes

How much should you spend on marketing.

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By Thomas Minieri, artist, author, entrepreneur | CEO of Minieri & Company | founder of the Lemonade Maker® brand.

When determining your marketing budget, there are several key factors to consider. Marketing encompasses everything from branding and website development to communications and sales. It is a big header, and each component needs to be well thought out to ensure your entire marketing system is firing on all cylinders.

Branding Overview

Building a brand is not just for large companies. It is the foundation of every business of any size and in any industry. Your brand is your first impression; it is comprised of the visuals that represent your products or services combined with the words used to communicate those products and services. Everything from logo design to sales copy is what makes your brand unique. A successful brand conveys credibility, while an underfunded brand creates doubt. One of my favorite sayings sums up the vibe of branding: How you do anything is how you do everything. Does your brand image tell prospects that you are professional, or does it send the message that you are low budget and disorganized? Branding is about perception.

Branding Spend

Start off with a professionally designed logo, a defined color palette, a selection of unique photos or carefully selected stock images and well-written sales copy. With a focus in marketing on return on investment (ROI), it might be challenging or impossible to track the effectiveness of many branding efforts. I consider branding an investment that makes every other part of your marketing strategy more effective. A poor brand hurts everything while a great brand helps everything. A business owner may spend anywhere from $1,000 to $5,000 for initial startup branding and additional funds for ongoing updates and further development.

Advertising Overview

Any effort that directly promotes your business to prospects can be considered advertising. Options may include running paid ads on social media or search engines, posting on social media, email marketing campaigns, direct mail campaigns, billboards, radio spots, outside salespeople or networking events. Your advertising budget should also include the cost to create any content that will be utilized in the actual advertisements as well as the cost of managing advertising campaigns.

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Advertising Spend

My rule of thumb with respect to advertising spend is to have two budgets in mind: one to sustain current revenues and another for robust growth. If you want to maintain current revenue amounts, then 5% to 10% of sales allocated toward advertising may suffice. If you want rapid growth, then you may need to push that number higher, possibly to 20% or more depending on the industry and type of business you operate. A startup business should commit to a fixed number for their advertising spend as their revenue may be too low to utilize a percentage of sales as a gauge. For many small businesses, $1,000 per month is a reasonable minimum advertising spend.

Communications

I call communications "marketing insurance." If you are going to spend money on branding and advertising, then make sure leads are managed properly. The first step to achieving this is to streamline the methods by which prospects can connect with you. Having too many methods (such as telephone, email, chat, texting and messaging) can be overwhelming. I prefer the good old-fashioned telephone. While I also like chat for website communication, I strive to get the prospect on the phone as soon as possible. Personal correspondence with prospects is crucial in many industries.

Communication Spend

The costs for proper communication can vary between industries. Spend what needs to be spent to ensure you are not losing leads due to unresponsiveness. Failure to manage your communication systems properly can be fatal to a business as money is being wasted on advertisements that are not turning into sales. Another aspect of communications and "marketing insurance" is customer service. The last thing you want is for a new customer to ask for a refund due to poor service.

Sales is under the marketing umbrella as the prospect has not yet purchased. The prospect saw your credible brand promoted in an advertisement, then they visited your website to learn more and now they are ready to make a purchase!

Sales Spend

Like communications, your sales spend will vary between industries. The goal here is to develop professional sales presentations or sales methods that clearly explain in detail the benefits of your offerings in a manner that encourages the prospect to make a purchase. Graphic design slideshows can work well and may help your team stay focused when presenting. Keep them fun and interesting. Videos and other media are also smart investments to improve sales results. If you rely on a sales team, they should be properly dressed, polite, knowledgeable and able to clearly communicate your products or services. Make sure they have the tools they need to succeed.

Customer Acquisition Cost

I tend to summarize marketing spend into one primary data point: customer acquisition cost (CAC). This is the total cost to get one new customer and includes your branding efforts, advertising spend, designer and marketing team salaries, and sales process costs. To find this number, simply add up all the above expenses and divide by the number of customers you acquired in that same timeframe. It makes for good business practice to evaluate your CAC annually and work to get that number lower each year without diminishing your brand. Avoid cutting your marketing budget, rather work to refine your marketing effectiveness. Starving your business of crucial marketing components is never a smart decision.

A well-thought-out marketing plan can make or break a company. It can also separate a company that is stuck in a revenue plateau from one that is soaring to new heights. I took my first company, a service-based studio business, from a small underfunded startup to a bustling national franchise in just six years. My CAC was about $250 per customer in years one and two. As our brand and marketing systems were perfected, I was able to lower that number to $110 per customer. This improved profitability and made my brand attractive to prospective franchisees.

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COMMENTS

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  7. Business Startup Costs: It's in the Details

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  10. Simple Business Plan Template (2024)

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  13. Business Plan: What It Is + How to Write One

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  14. Write your business plan

    Executive summary. Briefly tell your reader what your company is and why it will be successful. Include your mission statement, your product or service, and basic information about your company's leadership team, employees, and location. You should also include financial information and high-level growth plans if you plan to ask for financing.

  15. How Much Does It Cost to Write a Business Plan?

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  16. How Much Does A Business Plan Writing Cost?

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  17. How Much Do Business Plan Writing Services Cost?

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