Starting a business comes with upfront costs—some expected, others surprising. This article covers the five most common startup expenses and how to budget for them.

‍

Starting a business is exciting, but it also means spending money before you make money. Planning ahead helps you avoid surprises and stay in control of your cash flow.

Here are five common expenses almost every new business should expect—and how to think about budgeting for them.

‍

1. Legal Setup and Business Registration‍

Typical costs:

• LLC formation: $130 in Wisconsin (state fee)
• Name registration: $15–$50
• EIN: Free from the IRS
  
  • Learn how to get one in our article: Why Business Bank Accounts and EINs Matter (And How to Get Them)

Optional: You can pay a service to handle filings for $100–$300, but many people do it themselves.

‍

‍

2. Licenses and Permits

Depending on your business type and location, you may need local, state or industry-specific licenses.

Examples:

• Seller’s permit for retail businesses
  
  • Learn more in our article: Registering for a Wisconsin Seller’s Permit
• Food handling license for a catering company
• Professional license for barbers, massage therapists, or accountants

Typical costs: $50–$500+

‍

‍

3. Insurance

General liability is an important insurance to have, other types like commercial, auto or professional liability may also be required.

‍

Typical costs:

• General liability: $300–$1,000 per year
• Home-based business coverage can sometimes be added to homeowners insurance policy. Beware of co-mingling your funds.
  
  • Learn more about bank accounts here: Why Business Bank Accounts and EINs Matter
    

Tip: Talk to a local agent who works with small businesses—they’ll help you get only what you need.

‍

‍

4. Software and Tools

Most Businesses need some type of software these days. Start lean, don't ignore the essentials, but you can typical start and stay organized with low cost options.

Examples:

• Accounting/bookkeeping (like QuickBooks or Wave)
• Scheduling (Calendly, Acuity)
• Email, calendar, and storage (Google Workspace or Microsoft 365)

Typical costs: $0–$50/month depending on your setup.

‍

‍

5. Marketing and Branding

Getting you first customer takes visibility and trust. Creating an online presence and branding are well wort the time investment.

‍

Examples:

• Website domain and hosting: $50–$200/year
• Logo design: $0 (DIY) to $500+ (professional)
  
  • Examples: AI generation can be a free option if you are not artistic
  • Sites such as 99designs.com or fiverr can help intriduce you to professional artists
• Business cards, signage, flyers: $50–$300
• Social media setup: Free but time-consuming

Start simple. A clean, clear website and logo go a long way.

‍

Bonus: A Few Other Common Expenses

Depending on your business, you might also spend money on:

• Inventory or materials
• Equipment or furniture
• Rent or coworking space
• Payment processing fees (for taking credit cards)
• Business phone number or email address

‍

How to Budget for Startup Costs

1. Make a list of everything you must have to get started.
2. Add a buffer—things often cost more than you expect.
3. Aim for lean, not cheap. Cut where you can, but don’t cut what matters. Many times higher quality goes further than the absolute cheapest option

Even if you’re bootstrapping, spending wisely in the beginning sets the tone for your business’s financial health.

‍

Final Thought

The goal isn’t to avoid spending—it’s to spend with purpose and make your money go further. When you understand your first business expenses, you can launch with more confidence and fewer surprises.

‍