How Much Does It Cost to Start a Business in 2026?

The four cost categories every business has

Regardless of business type, your startup costs fall into four buckets. Different businesses weight them differently, but every business has all four.

1. Legal and administrative setup. LLC filing ($40-$500 depending on state), EIN (free), business bank account ($0-$25/month fees), registered agent if required ($50-$200/year), business licenses and permits ($50-$500+), accounting software ($0-$50/month). Total: $200-$1,500.
2. Product or service development. What it costs to build the thing you will sell. Ranges from near-zero (consulting) to millions (biotech). The biggest variance in startup cost is here.
3. Go-to-market (the first customers). Website ($0-$5,000), branding ($0-$10,000), initial marketing budget ($500-$10,000+), sales tools and CRM ($0-$100/month). Most founders under-budget this category.
4. Operating runway. The money you need to survive until the business generates enough revenue to pay you. For most new businesses, this is 6-18 months. This is the line item that kills more startups than any other.

Cost to start a service business (under $1,000)

Service businesses — consulting, freelancing, coaching, tutoring, bookkeeping, virtual assistance, web development — are the cheapest to start. You need a computer, software subscriptions, and an LLC. Clients pay for outcomes, not your overhead.

Real breakdown:

• • LLC registration: $100-$300 depending on state
• • Website (Squarespace, Wix, or basic Webflow): $15-$30/month
• • Professional email: $6/month (Google Workspace)
• • Accounting (Wave is free, or QuickBooks Simple Start): $0-$30/month
• • Proposal/contract tools (Bonsai, HelloSign): $0-$20/month
• • General liability insurance: $300-$800/year
• • First-year total: $800-$1,800

The constraint on service businesses is not money — it is time and client acquisition. You earn per hour worked. Until you hire or productize, your ceiling is hours-in-a-day times your hourly rate.

Cost to start an ecommerce business ($5,000-$25,000)

Ecommerce — selling physical products online — requires inventory, fulfillment infrastructure, and marketing spend to acquire customers. Shopify has made the platform trivially cheap, but the real costs sit outside the platform.

Real breakdown:

• • Shopify or WooCommerce: $29-$80/month
• • Initial inventory (minimum viable batch): $2,000-$15,000
• • Product photography: $500-$3,000
• • Logo + brand identity: $0-$2,000
• • Paid marketing budget (first 3 months): $1,500-$5,000
• • Packaging and shipping supplies: $500-$2,000
• • Shipping software (ShipStation, Shippo): $10-$150/month
• • Sales tax compliance tools: $0-$100/month
• • First-year total: $6,000-$25,000

The biggest ecommerce killer is inventory tied up in non-selling SKUs. Start with one SKU, prove it sells, then expand.

Cost to start a SaaS business ($10,000-$40,000)

SaaS costs vary wildly depending on whether you build it yourself, hire a dev, or use no-code tools. The infrastructure is cheap; the build is expensive.

Real breakdown (solo founder, no-code or self-built):

• • Hosting (Vercel, AWS, etc.): $0-$100/month early, scales with usage
• • Database (Supabase, Neon, PlanetScale): $0-$50/month
• • Auth (Clerk, Auth0): $0-$100/month
• • Payments (Stripe): 2.9% + 30¢ per transaction (no monthly fee)
• • Email (Resend, SendGrid): $0-$30/month
• • Analytics, error tracking, support tools: $50-$200/month
• • Domain and SSL: $15-$50/year
• • Marketing (content, SEO, paid): $2,000-$20,000 first year
• • First-year total: $10,000-$40,000

If you hire a developer to build the MVP, add $15,000-$75,000 for the initial build depending on scope. This is often why solo technical founders have such a cost advantage — they are effectively gifting the company tens of thousands of dollars of free labor in year one.

Cost to start a restaurant ($175,000-$750,000)

Restaurants are capital-intensive. Location, equipment, buildout, permits, and inventory all hit upfront. Industry data from the National Restaurant Association puts the median full-service restaurant startup cost around $275,000, with significant variation by location and concept.

Real breakdown (small fast-casual):

• • Build-out / construction: $100-$300 per square foot
• • Kitchen equipment: $50,000-$150,000
• • Furniture and fixtures: $20,000-$60,000
• • Security deposit + first month rent: 2-6 months at location rate
• • Liquor license (if applicable): $500-$300,000 depending on state
• • Health permits and food handler licenses: $500-$2,000
• • Initial inventory: $5,000-$20,000
• • POS system: $500-$3,000 + $50-$100/month
• • Insurance (general liability + workers comp): $3,000-$10,000/year
• • Payroll for first 3 months: $30,000-$100,000
• • Typical total: $175,000-$750,000

Food trucks are meaningfully cheaper ($50,000-$200,000 all-in) and a common way to validate a restaurant concept before committing to a lease. Ghost kitchens and delivery-only concepts can launch for under $30,000 but have their own distinct challenges.

The hidden costs nobody talks about

Most "cost to start a business" articles stop at the obvious line items. The expenses that actually surprise new founders are the ones nobody mentions.

How to reduce startup costs without hurting the business

Frugality in the right places extends your runway. Frugality in the wrong places slows or kills the business. Here is where to cut and where not to.

Cut aggressively:

• • Office space — work from home until you have 3+ employees
• • Expensive branding in year one — a passable logo costs $100 on Fiverr
• • Premium software tiers you do not need yet
• • Legal retainers — pay hourly until you have actual legal needs
• • Custom anything in year one (custom software, custom dashboards, custom CRM)

Do not cut:

• • Accounting software and tax preparation — DIY disasters cost 10x the savings
• • Business insurance — a single lawsuit ends your business
• • Security basics (SSL, backups, 2FA on everything)
• • Quality of the actual product or service — the one thing customers will not forgive

Funding your startup costs

Sources of money to start a business, in order of founder-friendliness:

1. 1. Personal savings. Keeps you fully in control. Uses post-tax money.
2. 2. Revenue from early customers. The best funding source. Proves demand while it funds the business.
3. 3. Friends and family. Cheap capital but strains relationships if the business fails.
4. 4. SBA loans. The best-kept secret in small business financing. 7(a) loans up to $5M, 504 loans for equipment/real estate, microloans up to $50k. Lower rates than commercial loans, but requires a strong business plan.
5. 5. Business line of credit. Useful for seasonal or working-capital needs.
6. 6. Personal credit cards. Only for short bridges, never as primary financing.
7. 7. Angel investors. Gives up equity but adds expertise. Best for businesses with clear scaling potential.
8. 8. Venture capital. Only for venture-scale businesses (10-100x return potential). Not appropriate for most small businesses.

Cost-to-start checklist

Before launching, have actual dollar figures for each of these line items. If you cannot fill in a number, you have not planned adequately.

1. 1. Legal setup and registration
2. 2. Product or service development / initial inventory
3. 3. Website, branding, marketing materials
4. 4. First 6 months of operating expenses
5. 5. Customer acquisition budget for first 6 months
6. 6. Insurance (general liability, E&O, product as applicable)
7. 7. Accounting, legal, and tax services
8. 8. Personal living expenses for 12+ months
9. 9. Tax reserve (25-35% of projected net income)
10. 10. Contingency (10-20% buffer on the total)

Add these up. Compare to the money you actually have available. If the gap is large, either raise more, start smaller, or start nights-and-weekends until the gap closes.