Why you should calculate start-up costs


Your start-up costs are expenses before your business generates an income. There are many costs that come with setting up a business and different businesses have different setup costs. Understanding start-up costs can help you to plan ahead, seek finance and increase your chances of business success.

Create a start-up costs sheet

You can use our template to help calculate your business start-up costs.

Follow these steps to calculate your start-up costs.

1. Research expenses


Before you start your business, you should conduct market research on your potential industry. This will help you to make sure that your product or service will be profitable. You'll need to gather information on your market, potential customers and cost of production.

Your research will help you identify and plan for some of the costs to start your business, such as staff or marketing costs.

Learn how to research your market.

2. Understand your start-up costs


Your start-up costs will depend on the type of business you're starting, your business structure and the industry you're entering. Our template lists some expenses common to all business types, such as:

Start-up costs are your one-off costs associated with setting up a business.

Determine your running costs

It's a good idea to make sure you'll be able to cover 6 months’ worth of running costs up front when you start a business.

Running costs are the day-to-day expenses associated with operating your business. It's the amount of money you will regularly spend on things such as wages, rent and buying stock.

3. Calculate your start-up costs


Once you have your list of expenses, enter the costs into the spreadsheet. It'll calculate your total costs for you.

If you’re using estimated costs, label them clearly and state whether your figures include or exclude goods and services tax (GST).

Read next

Start planning your business with our business planning template.

Learn how to seek finance.

Check out our Guide to starting a business to learn about other steps.