How to Calculate Startup Costs
- Jeanette Delgado
- 3 days ago
- 2 min read
If you’re about to launch, your startup costs are the bills you’ll pay before (and right after) opening—often before revenue is steady. The SBA’s startup cost guide lays out a straightforward way to estimate those costs so you can plan funding, talk to lenders/investors, and set realistic profit expectations.
Quick Links
The real reason startups underestimate costs.
Most people don’t fail because they can’t “do the math.” They fail because they leave out entire categories (or underestimate timing), then run out of cash during the first stretch of operations. The SBA guide emphasizes preparation: knowing your expenses before you launch helps you plan profit, break-even, and funding more confidently.
Step 1: Build your expense list (the right way)
Start by matching your expense list to your business type (physical location, online, or service). Each has different cost drivers, and the SBA guide includes a complete checklist you can use so you don’t overlook common expenses.
To keep it simple at first, draft your list in a few buckets like:
Space and setup (if applicable)
Tools, equipment, and software
Licenses, permits, and insurance
Professional support (legal/accounting)
Marketing and website
Then use the SBA checklist to fill in what you missed.
Step 2: Price your costs using real-world inputs
Some costs are easy (published fees). Others are variable (compensation, marketing, certain operational costs). The SBA recommends researching online and confirming with vendors, mentors, and service providers so your numbers reflect reality, not hope.
Step 3: Separate one-time vs monthly
Once you have your list and rough prices, split everything into:
One-time startup costs (setup and launch)
Monthly operating costs (ongoing burn rate)
This single step is what turns a “list of expenses” into an actual financial plan. The SBA guide explains how to organize these categories and why this matters for cash planning.
Step 4: Do a quick break-even check
Before you finalize your funding target, do a sanity check: when do you expect revenue to cover ongoing costs? The SBA provides a break-even resource and calculator you can run quickly using your fixed costs, pricing, and variable costs (it’s worth doing even if you’re service-based).
Step 5: Turn it into a funding-ready summary
Once you’ve totaled your one-time and monthly costs, you can present the numbers in a clean, lender-friendly format. The SBA notes that lenders and investors compare expected costs to projected revenue to evaluate profit potential—so clarity and structure matter.
What to read/download next (the “real” resources)
If you want the full checklist, the downloadable worksheet, and the break-even tools, the SBA has them all in one place:
