How to Calculate Business Startup Costs                                                     

Ready to start a business? As an entrepreneur, you’ll want to make sure your business will yield a profit, which is why it’s wise to first understand how much it costs to start the business and what it will take to keep it going. Business startup costs include all of the one-time expenses you’ll incur before you’re technically open for business. The great thing is that these start up business costs can be tax deductible. But how much do you need and what else should you consider? Learn what you need to know about calculating startup costs for your new business.  

How Much Does It Cost to Start a Business? 

The cost to start a business will vary based on a number of factors including the type of business you’re in, the area you’ll be operating this business, and what you need to get started. Most small-scale businesses may only need to invest about $3,000 to get started, while most home-based franchises cost $2,000 to $5,000. Other business models can require upwards of a million dollars, so understanding these costs is a vital part of your business plan.  

Typical Startup Business Costs & Tax Deductions  

A list of examples your business start-up costs might include:
 

• Market research to determine if you should buy or create this new business 
• Licenses, permits, legal fees 
• Building, facility or land  
• Inventory 
• Employees or labor  
• Rent and utilities 
• Furniture, supplies, equipment  
• Insurance 
• Marketing expenses like signs, flyers, website, agency or freelance costs 
• Technology needs including laptops, phones, tablets, credit card payment processing systems, software like customer relationship management systems, inventory programs and more  

It’s important to keep track of all of your startup expenses because you’ll need this information when filing your taxes. The IRS defines business start-up and organization costs as capital expenditures. They allow business owners to deduct up to $5,000 of business start-up and $5,000 of organization costs. According to the IRS, startup costs include expenses that went into investigating the creation or acquisition of a business and creating an active trade or business. Organizational costs include expenses related to creating a corporation or partnership.  

Depending on the type of expense, you may be able to deduct or amortize costs for the one-time business startup costs. Use the Small Business Administration’s startup costs worksheet to keep track of your specific start up expenses.  It is always smart to talk to your tax professional or CPA for more information and specific guidance relevant to your business.  

Starting a Business

There are several helpful resources that will help you get your new business off the ground.  

Funding Your Business Startup Costs  

If you’d like to seek business financing to cover your business startup costs, a great first step is to develop a strong business plan. Investors and lenders like Ameris Bank want to understand your estimated startup costs, whether your business idea is viable, how it will be operated, your marketing strategy, and projected business expenses and revenue. Business counselors can advise you on how to outline these essential components in your business plan so that you maximize your ability to secure start up business financing. The SBA helps you search for local small business resources by state. 

We love helping entrepreneurs get started at Ameris Bank, and have several business tools and resources to help you get started including:

• Financial calculators for businesses
• Financial articles for businesses

Our small business loans can help turn your business idea into a reality. As a preferred SBA lender, we can help you navigate government programs to get the financing you need to manage cash flow, purchase inventory or fixed assets, buy equipment or buildings and more. Apply for an SBA loan now or if you’d like to talk to a local business specialist, please contact a business lenders to set up an appointment.  


Reviewed April 2025
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. 

All loans are subject to credit approval.  

Ameris Bank is not affiliated nor endorses the companies referenced in this article.