Question 1

How much does it cost to start a small business?

Accepted Answer

It ranges from a few thousand dollars for a home-based service business to several hundred thousand for a buildout-heavy location. The structure is always the same: one-time costs, plus enough operating cushion to cover the burn until revenue covers expenses, plus a contingency of 10 to 20 percent.

Question 2

How many months of expenses should I have in reserve?

Accepted Answer

Budget from your cash curve, not a rule of thumb. The reserve you need is the deepest point of your cumulative cash line before breakeven, which depends on how fast revenue ramps. Slow-ramp businesses like restaurants and clinics often need 6 to 12 months of net burn; fast-ramp services may need 3.

Question 3

What startup costs do people forget?

Accepted Answer

The operating cushion itself, pre-opening payroll and training, deposits, insurance down payments, permit timelines that push the open date, and the owner's own living costs. If the plan only works when everything opens on schedule, the plan is underfunded.

Question 4

Is it cheaper to buy an existing business than start one?

Accepted Answer

Often, once you count the startup's ramp losses. An acquisition has revenue on day one, and SBA 7(a) financing can fund up to 90 percent of the purchase, so the cash needed can be comparable to a from-scratch launch with far less ramp risk. It depends on the market and the multiple.

Startup Cost Estimator

Where Are You Opening?

One-Time Costs

Monthly Burn Once Open

Ramp & Funding

Capital Requirement

Full Startup Budget Full Report

Starting up, or buying something already running?