Accounting & Bookkeeping

Startup Budget

What is a startup budget?

One of the things new business owners aren’t completely sure of how to do is how to calculate the costs of starting a business - aka creating a startup budget. In this article, we’ll cover what you want to include and give you some examples of the types of expenses you should be including that you may not have thought of yet.

Before we get started, copy the Startup Budget Template from Google Sheets to your Google Drive and start jotting down some of the expenses you’ll need to track.

Startup Budget Template

Click the button to copy our template to your Google Drive.

How do I estimate my startup budget?

A startup budget template is one of the most important tools you can use to run your small business. Unfortunately, many small business owners skip this vital business management step. The good news is that it’s not difficult to do. First, you’ll want to list all your expected monthly expenses, which will depend on the type of business you’ll launch. A food business will probably require business location, equipment, staff (cooks and waiters), and ingredients, while a service business will need a great website to schedule clients and collect payments. We compiled a list of other typical expenses below.

Next, you’ll want to estimate what each item will cost. You can run a Google search to get a pretty good idea, just make sure to check the logic you’re using and update costs based on where your business will be. For example, wait staff in California has a much higher hourly wage than wait staff in Illinois. Last, just add all your expected costs and voila, startup budget calculated!

In summary you’ll want to

  1. List all your expected monthly expenses

  2. Estimate what each item will cost

  3. Add all your estimated expenses for your startup budget

What are some typical startup expenses?

Some things you should consider are:

  1. Legal work

    • Seller’s permit

    • Logo Trademark/Copyright

  2. Labor

    • Website designer

    • Sales associates

    • Promotion team

    • Onsite staff

  3. Fixed Costs (typically paid monthly)

    • Business site rental

    • Business phone

    • Business insurance

    • Business utilities, about $2 per square foot of space

    • Payroll, 25%-50% of total budget

    • Office supplies, etc consider the quantity you need and the costs

  4. Startup assets

    • Materials to create your product

    • Cost to manufacture

    • Costs to distribute, how will you get your products to your customers?

    • Site furniture

    • Promotional materials

    • Business laptop

Why is estimating my startup costs important?

Knowing how much you business will cost can help you plan how much funding you’ll need in order to start your new business. It can also help you visualize what you’ll need including stuff you haven’t planned for, like an emergency cash fund in case you need to fill last minute orders.


Pro Tip

A business bank account can be used as a tool for keeping track of where and how you’re spending money. Banks typically provide a monthly statement that can be downloaded or copied. This can help you categorize your expenses such as fixed and variable. Fixed expenses are paid on a scheduled basics, like monthly bills. Variable expenses represent those daily spending decisions like taking an investor out to eat and buying coffee for your team.

Fixed expenses examples: Retail location rent payments, business insurance, web hosting fees, administrative costs

Variable expenses examples: Dining out and entertainment

Use any monthly expense tracking method you choose to identify areas where you can cut your spending, and stick to it!