Starting a Small Business in 2022? Here’s What It’ll Cost You.
Although startup costs vary depending on your industry, there are a few expenses common to all small businesses. To help you get started, we’ve compiled a list of some basic costs to consider if you’re starting a new business this year.
Ideally, you’ll have your own growth goals and available capital, so it’s up to you how much you want to invest upfront (in things like inventory, digital marketing, and labor). Think of this list as more of a starting point.
Besides time and hard work, here are the bare essentials you’ll need to get your business up and running. (Where possible, we’ve included the most cost-effective options available).
Cell phone plan
Business bank account
Inventory, equipment, and materials
Business Registration ($40 - $725, based on location)
According to the Small Business Administration, your location and business structure determine how you’ll register your business. In some cases, you won’t actually need to register at all. If you’re working as a sole proprietor, for instance, you can launch your business straight away.
Bear in mind that each business structure has its own advantages and disadvantages, so make sure you understand what you’re paying for. If you do decide to register, the cost to do so will depend on your location.
To help you get started, here are the business registration fees for each state:
Cell Phone Plan (Starting at $15/month)
Not all small businesses reach out to clients by phone at first. However, having a decent cell phone plan gives you the flexibility to do so if it fits your business model. Staffing, sales, hospitality - and many other sectors - rely on calls to move fast and get instant feedback. Plus, you never know when you’ll need to tap into your data, call local suppliers and contractors, or speak to government agencies.
Even if you already have a personal plan, it’s worth shopping around for something that serves your needs as a business owner—whether that means more data or minutes, lower monthly fees, or great customer support.
Generally, phone plans will cost you between $15 and $85, with varying levels of service depending on the provider and your budget.
Business Bank Account (Free)
Contrary to popular belief, it’s actually pretty easy to set up a business bank account. There are several free setup options out there for business bank accounts, but keep in mind that there may be other fees down the line. Monthly fees, deposits, and ATM fees are some common ones, so do your research before signing up.
Website (Starting at $10/month)
According to Statista, the number of people worldwide buying online reached a staggering 2.14 billion in 2021. Your website, social media, reviews and search engine ranking positions are all important signals to prospective customers about whether to buy from you or not.
However, the cost of setting up your digital presence doesn’t have to be high. Any website template provider will help cover the basics, with some popular options being Webflow, Squarespace, Wix, Wordpress. You’ll typically pay for your website plan/account, and potentially some kind of hosting fee, but some providers (like squarespace) just do a flat monthly fee.
Payment Solution ($35+)
Whatever your business provides, finding a simple way to accept payments and cut your processing fees will make your life a whole lot easier. And, with SumUp’s low processing fees on credit card transactions, plus our free invoicing solutions, you get to keep more of your revenue, while you focus on building your business.
Inventory, equipment, & materials (cost varies)
The basic tools and materials of your trade are crucial. Whether it's a donut machine or barbershop equipment, every business has its own unique equipment costs. And while there isn’t a one-size-fits-all investment for all businesses, there are a couple of questions you can ask yourself to help you budget effectively in the beginning:
Am I running an online, brick-and-mortar, or a services company? Online businesses—like eCommerce, or drop shipping—often require much less startup capital. Sometimes, selling products online requires physical materials with an online presence, e.g. running an Etsy store from your home. Services companies (such as plumbers or mobile dog-groomers) have other costs, like transportation and tools. Brick and mortar means that the primary location from which you sell products or services is a physical space, like retail or hospitality.
What are the fundamental tools and materials I need to get my business operational You’ll know your business better than anyone else. Write a checklist of the most important things you need to invest in to get started. This includes any licenses, permits, and certifications required to operate your business legally and effectively.
Starting a small business? It may not cost as much as you think.
Ultimately, starting a business comes with a few upfront costs. However, these may not be as high as you think. If you have some capital spare to help you grow your business quickly, that’s great, but if not, you can save money over time and grow your business step-by-step.
With 2022 set to be an interesting year for small businesses everywhere, finding ways to cut your startup costs is a must. Fortunately, it’s now easier than ever to start, fund, and grow your business.
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