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Startup and Entrepreneurship Center

How to Calculate Startup Costs

Startup cost planning shows how much money is needed to open and continue operating until revenue can support the business.

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01

List opening costs

Include registrations, deposits, equipment, inventory, professional services, setup, branding and launch expenses.

  • Obtain current quotes
  • Include tax and delivery
  • Add a contingency
02

Calculate monthly costs

Estimate rent, payroll, software, insurance, inventory, marketing, utilities, debt payments and owner compensation.

  • Separate fixed and variable costs
  • Include seasonal changes
  • Review payment timing
03

Plan the cash runway

Estimate how long it may take to collect revenue and how much reserve is needed during slower months or delays.

  • Create multiple sales scenarios
  • Protect essential expenses
  • Update actual costs after launch

Frequently Asked Questions

Questions About How to Calculate Startup Costs

What is working capital?

Money available for day to day operations and timing differences between expenses and customer payments.

Should owner pay be included?

Yes. The plan should recognize what the business must eventually support.

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