A recent article in Inc. magazine by editor-at-large Maria Aspan asks a crucial question for small business owners: how much money do you need to launch a business?
The amount today is probably a lot less than the $31,500 average noted in a 2009 report published by the Ewing Marion Kauffman Foundation, says Aspan, the author of “Startup Money Made Easy: The Inc. Guide to Every Financial Question About Starting, Running and Growing Your Business.”
Aspan points to a 2018 survey of CEOs of Inc. 5000 companies of whom 42 percent said they were able to launch their business for under $5,000. Another 21 percent said they were able to do so for between $5,000 and $25,000.
Businesses that produce a product, as opposed to those that offer a service, tend to have higher startup costs, Aspan notes.
“If you’re making T-shirts or baking cupcakes or designing mobile apps, you’ll need the raw materials to create your product, the equipment for the production, the people to perform the manufacturing or baking or coding, and the space to do the work,” she writes.
Service businesses, on the other hand, generally cost less to start but can cost more to grow, Aspan writes.
Click here to read the article.
The U.S. Small Business Administration website has lots of helpful information for people looking to open a business, including a step-by-step guide for estimating startup costs.
Those costs can differ depending on whether you’re launching a brick-and-mortar business or an online business.
The guide includes an online worksheet that will help you calculate one-time costs for starting the business, and recurring monthly expenses.
The Delaware Division of Small Business wants to help you start or grow your business in Delaware.
Contact us to see how we can help you.