How Much Does it Cost to Open a Small Business in 2023?
How much does it really cost to open a small business?
From finding a location, to hiring employees, there are plenty of costs that you must absolutely budget for. Unfortunately, most business owners and managers face serious setbacks when it comes to small business finances.
In fact, recent data shows that the majority of small business owners don’t even have a budget to begin with! Some business owners even forget to invest in a point of sale (POS) system before opening their doors – d’oh!
In this article, we’ll cover all the expenses that businesses incur during the planning and launch process. After reading this article, you will feel more prepared to create a bulletproof budget for your small business.
How Much Does it Cost to Open a Small Business?
Did you know that nearly 75 percent of small business owners and managers face financial difficulties within the lifetime of their business?
Preparing for the worst and building a budget to suit is one of the most effective ways to avoid overspending or falling short of your financial goals.
The average cost of starting a small business can range from $40,000 to $100,000 within the first year.
Keep reading to learn more about some of the costs and fees associated with opening a successful small business in the United States.
An operating expense is any expense that a business incurs daily. There are many types of operating expenses, including rent, payroll, postage, and more.
Creating a solid operating budget will help you determine whether you need to increase or decrease spending in certain areas. For example, if customers are getting frustrated with the length of your checkout lines, it might be time to increase operating expenses with the purchase of an additional register. This will allow you to decrease checkout times while accommodating a larger volume of customers.
RELATED READING: 5 POS Register System Features to Use in 2023
There are other types of small business equipment that you’ll need to invest in as well, including an internal modem, router, desktop computers, and laptops. In some cases, the total cost of equipment may be the most significant expense that your small business needs to budget for.
We recommend looking for opportunities to finance small business equipment. There are many great programs out there, including 7(a) loans, microloans, and certified development company loans. Financing your small business equipment is a great idea, especially if you’re trying to purchase the very latest and greatest equipment available.
RELATED READING: Review of the 5 Best POS Hardware Vendors for 2023
Don’t forget to purchase insurance for your small business! Without it, your business could end up spending hundreds (or thousands) of dollars when disaster strikes. Don’t leave the success of your business to chance!
Here is a list of the most common types of business insurance:
- General Liability Insurance
- Business Income Insurance
- Professional Liability Insurance
- Workers’ Compensation Insurance
RELATED READING: The 6-Step Guide to Setting Up a Point of Sale System
Marketing and Advertising Costs
Marketing and advertising is another expense that you’ll need to consider during the early stages of business growth. A great marketing and advertising program encourages prospects to buy and creates repeat customers.
Here are some great marketing ideas that you can launch right now:
- Social media marketing campaigns
- Customer loyalty promotions
- User-generated content marketing
- Product launch campaigns
- Digital sales promotions
RELATED READING: 5 Top Digital Marketing Solutions for Small Businesses
POS Nation Powers Small Businesses Nationwide
A POS system is one of the most overlooked investments that a business owner or manager can make. Finding the right POS system for your growing small business can be the difference between your financial success or downfall. For this reason, we recommend investing in a solution purpose-built with your unique business and industry in mind.
However, the path to POS success is paved with serious pitfalls that your small business must avoid at all costs. Fortunately, we’ve created a simple guide to make an informed purchase decision for your business.
Download our free guide: The Retail POS System Buyers’ Guide.
In this guide, we give you all the key intelligence you need to find the very best POS system, including the features and system capabilities that you must prioritize in order to launch and manage a successful business!