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:

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:

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:

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.

Monthly expenses
Monthly expenses Projected monthly expenses % of total
Other monthly costs:
Subtotal {{calculate_total_monthly_expenses()}} {{calculate_percentage_of_monthly_expenses()}}
One-off costs
One-off costs Projected one-off costs % of total
Other one off costs:
Total estimated start-up capital {{calculate_total_costs()}} 100%

Also consider...