How Much Money Do You Need to Start a Business? (2024)

FAQs

How Much Money Do You Need to Start a Business? ›

A good rule of thumb when starting a business is to have enough cash on hand to cover expenses for at least three months. Keeping your costs in check early will keep your company in balance, allowing you to make a profit – and possibly expand somewhere down the line.

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.

While many people might think that starting a business will require a significant investment upwards of $1,000 or more, some key businesses can take off with a minimal investment of $500 and some as low as $100. Read our list below to see which businesses you could start with less than $500.

Self-funding can come in the form of turning to family and friends for capital, using your savings accounts, or even tapping into your 401(k). With self-funding, you retain complete control over the business, but you also take on all the risk yourself.

Although it's more challenging, there are ways to start a business with no money. However, this doesn't mean you're okay to start a one with $0 in your savings account. At the bare minimum, you should have an emergency fund with three to six months' worth of living expenses before starting a business.

A startup cost is any expense incurred when starting a new business. Startup costs will include equipment, incorporation fees, insurance, taxes, and payroll. Although startup costs will vary by your business type and industry — an expense for one company may not apply to another.

Starting a business with less than $200 may seem impossible, but it is possible. With a little creativity and resourcefulness, you can get your small business up and running on a shoestring budget.

Is $100 dollars enough to start a business? ›

So, it's not crazy or impossible to turn $100 into a sustainable life-changing income for you and your family. Indeed, there are so many more tools and services out there now than there were even a decade ago that it's much easier to go from an idea to a fully fledged business on your own, and with minimal expense.

There are also some businesses you can start offline that don't require startup cash. For example, you might start a dog-walking or pet-sitting business, become a tutor for local students, or teach art or music. These businesses allow you to leverage your skills to make money without spending any money.

Generally, start-up costs for a new business can range from several hundred dollars to $100,000 or more. The amount you'll need to spend depends on the size and complexity of your business and whether you're starting from scratch or buying an existing business.

Startup capital is what entrepreneurs use to pay for any or all of the required expenses involved in creating a new business. This includes paying for the initial hires, obtaining office space, permits, licenses, inventory, research and market testing, product manufacturing, marketing, or any other operational expense.

The average startup costs for manufacturing businesses in the US varies between $550,000-$13,50,000. These costs are largely dependent on the type, scale, concept, and nature of your manufacturing business. According to the IRS, a manufacturing business enjoys a net profit margin of 8%.

A budget of $5,000 may seem modest, but it can be sufficient to launch many successful solo businesses. By carefully allocating funds and focusing on low-cost strategies, such as online marketing and remote work, you can maximize the value of your investment and achieve profitability sooner.

There are many types of companies that you can start with $10K—too many to list, in fact, though we'll look at some examples in the next section. Most of these types of businesses are on the smaller side, of course, but $10K is a great starting point for a small local business.

According to the SBA or Small Business Administration, most microbusinesses (with one to three employees) cost approximately $3,000 to start. Additionally, they estimate home-based businesses to cost between $2,000 and $5,000 to start.