Startup Costs Checklist: What to Budget Before Launch

Most new business owners don’t run out of money because of one big expense. They run out because of 20 small ones they didn’t plan for: a utility deposit, a state annual fee, a software tool that renews every month, the insurance a landlord requires before handing over keys.

A startup costs checklist turns those surprises into line items. The US Small Business Administration recommends calculating startup costs early because it helps you estimate profits, run a break-even analysis, apply for loans and attract investors. This guide walks through every category, flags the costs people forget, and shows how to build a realistic budget.

This is general information, not legal, tax or financial advice. Fees change, so confirm current amounts with your state and vendors.

One-time costs vs ongoing costs

Split your budget into 2 parts:

• One-time startup costs: Things you pay once to open, such as formation filings, equipment, a website build, initial inventory, signage and deposits.
• Ongoing operating costs: Things you pay every month or year, such as rent, payroll, software subscriptions, insurance premiums, utilities and marketing.

The SBA suggests planning at least 1 year of monthly expenses, and ideally more, so you can see how long your cash lasts before revenue catches up. Many failed launches budgeted carefully for opening day and forgot months 2 through 12.

Key takeaway: Your launch budget isn’t just what it costs to open the doors. It’s what it costs to open them and keep them open until revenue covers your bills, so build a cash reserve into the plan from the start.

The startup costs checklist

Use this as a working list. Not every item applies to every business; cross off what doesn’t fit and add what’s unique to your industry.

1. Legal, filings and registration

• [ ] Business entity formation filing (LLC, corporation) with your state
• [ ] Registered agent service, if you don’t act as your own
• [ ] DBA / assumed name filing, if you use a trade name
• [ ] Federal EIN (free from the IRS)
• [ ] State tax registrations (sales tax permit, employer withholding, unemployment insurance)
• [ ] Business licenses and permits from your city, county or state
• [ ] Industry licenses (food service, health, contractor, cosmetology and so on)
• [ ] Trademark application, if protecting your brand
• [ ] Recurring state fees, such as annual report fees or franchise taxes

Formation and annual fees vary widely by state. For example, Delaware’s LLC formation form lists a $110 filing fee and the state charges LLCs a $300 annual tax, while California charges LLCs an $800 annual tax that applies from the first year. A USPTO trademark application has a base fee of $350 per class of goods or services. See how to form an LLC online, how to get an EIN and how to trademark a business name for step-by-step help.

One cost you can likely skip: FinCEN’s March 2025 rule exempted companies created in the US from beneficial ownership information (BOI) reporting under the Corporate Transparency Act.

2. Insurance

• [ ] General liability insurance
• [ ] Professional liability (errors and omissions), for service and advice businesses
• [ ] Commercial property insurance, if you own equipment or inventory
• [ ] Workers’ compensation, required in most states once you have employees
• [ ] Commercial auto, if you use vehicles for business
• [ ] Cyber insurance, if you store customer data or take payments online (see cyber insurance requirements)

Get quotes early. Landlords, clients and some licensing boards require proof of insurance before you can start.

3. Location and facilities

• [ ] Security deposit and first month’s rent
• [ ] Build-out or renovation
• [ ] Utility deposits and setup fees (electric, gas, water, internet)
• [ ] Signage, which may need its own permit
• [ ] Furniture and fixtures
• [ ] Coworking membership or virtual office, if you don’t need a full space

4. Equipment and supplies

• [ ] Computers, phones and printers
• [ ] Industry equipment (kitchen, salon, shop tools, vehicles)
• [ ] Point-of-sale hardware, if you sell in person (see how to choose a POS system)
• [ ] Office and operating supplies
• [ ] Safety equipment required by code

5. Inventory and materials

• [ ] Initial inventory or raw materials
• [ ] Packaging and shipping supplies
• [ ] Minimum order quantities from suppliers, which can be higher than you expect

6. Software and technology

• [ ] Domain name and website (see how much a website costs)
• [ ] Professional business email
• [ ] Accounting software
• [ ] Payment processing (budget for per-transaction fees, not just setup)
• [ ] CRM, scheduling or booking tools
• [ ] Payroll software, if hiring
• [ ] Cybersecurity basics: password manager, backups, device protection

Software is the most commonly underestimated category, because each tool looks cheap alone and the monthly total adds up. List every subscription with its monthly and annual cost.

7. Marketing and launch

• [ ] Logo and brand design
• [ ] Launch advertising
• [ ] Printed materials (cards, menus, flyers)
• [ ] Photography and video
• [ ] Google Business Profile setup (free) and local listings
• [ ] Grand opening or launch event

8. Professional help

• [ ] Attorney for formation, contracts or leases
• [ ] Accountant or bookkeeper setup
• [ ] Consultants or contractors for specialized setup

9. People

• [ ] Recruiting and hiring costs
• [ ] Wages before opening (training time)
• [ ] Payroll taxes and benefits
• [ ] Your own living expenses if you’re not taking a salary yet

The costs founders forget most

How to estimate costs you don’t know yet

Some costs have published prices; others need research. The SBA recommends using fixed published prices where they exist, such as permit and license fees, and estimating the rest through research and conversations with mentors, vendors and service providers.

1. Use official fee schedules for filings, licenses and permits.
2. Get 3 quotes for insurance, build-out and major equipment.
3. Talk to owners in your industry who aren’t direct competitors, for example in another city.
4. Ask a mentor. Free mentoring is available through SBA resource partners such as SCORE and Small Business Development Centers.
5. Add a contingency buffer on top of your total to cover surprises.

Taxes: deducting startup costs

Startup costs may reduce your taxes. Under IRS rules, you can generally deduct up to $5,000 of startup costs in the year your business begins. That $5,000 is reduced by the amount your total startup costs exceed $50,000, and any remaining costs are amortized over 180 months starting the month the business begins. Organizational costs for forming a corporation or partnership have a similar, separate rule.

Equipment and other assets usually follow depreciation rules instead. Keep every receipt from day 1 and talk to an accountant about how to treat each expense.

Where to start: build your budget in 5 steps

1. Copy the checklist into a spreadsheet with columns for item, one-time cost, monthly cost, source of the estimate and status.
2. Fill in fixed costs first from official fee schedules and vendor quotes.
3. Estimate monthly operating costs for at least 12 months.
4. Add a contingency buffer and a cash reserve covering several months of operating costs.
5. Compare the total to your funding. If there’s a gap, cut scope, phase purchases or look at financing such as SBA loans. Then open a business bank account so every expense is tracked cleanly from the start.

If you’re opening an online shop, our guide to how much it costs to start an online store has category details specific to ecommerce.

Conclusion

A startup costs checklist is the cheapest insurance you can buy against running out of money in your first year. Work through each category, price fixed items from official sources, get quotes for the rest, and budget for the forgotten costs: annual state fees, deposits, insurance, processing fees and subscriptions. Then add a reserve to keep the doors open while revenue grows.

Sources

• US Small Business Administration: Calculate your startup costs — cost categories, one-time vs monthly costs and estimating guidance
• IRS: Instructions for Form 4562 — $5,000 startup cost deduction, $50,000 phase-out and 180-month amortization
• Delaware Division of Corporations: Tax FAQ — $300 annual LLC tax
• California Franchise Tax Board: Limited liability company — $800 annual LLC tax
• USPTO: How much does it cost? — trademark base application fee per class
• FinCEN: Removal of BOI reporting for US companies — domestic companies exempt from BOI reporting