Starting a business is an exciting endeavor, full of opportunities and potential for growth. To ensure success, it's essential for founders to carefully manage their resources. Estimating expenses for a startup is one of the preliminary steps in the process of launching a company. To ensure success for a startup, it's important to consider the following points:

Definition of a Start-up

A startup is a newly launched business, typically with a limited budget, whose objective is to develop a viable business model in order to scale up. A startup typically involves a team of entrepreneurs, having a shared vision and/or innovation, striving to succeed. Essentially, a startup is a business that is in the early stages of growth, and requires unique approaches when it comes to resources and funding.

Goals of a Start-up

The goals of a startup can vary widely depending on the nature of the business. Generally, a startup’s goals are to build a sustainable product or service, grow an audience or customer base, build a team of engaged employees, and maximize profitability. The success of a startup is largely dependent on its founders’ ability to accurately manage and estimate expenses.

What to Consider When Estimating Expenses

  • Startup costs such as incorporation, legal fees, accounting tools, and office rent.
  • Recurring expenses such as employee salaries, inventory, and office supplies.
  • Marketing & advertising expenses such as print ads, online campaigns, and SEO work.
  • Overhead expenses such as insurance, IT support, utilities, and maintenance.

Employee Expenses

Estimating employee costs is an essential factor to consider when creating a budget for your startup. Depending on your company’s size, you may need to hire employees for various roles. Employees require wages, benefits, and other related expenses which can quickly add up. To accurately estimate your employee expenses, it’s important to consider the following: wages and benefits.


The amount for wages computed for each employee will depend on how much their respective roles are worth to your company. To determine what to pay each employee, refer to an online salary calculator, or consult the HR industry standard to make sure the wages are fair. As different earning levels can make a big impact on your budget, it is critical to determine an amount that is realistic while being able to attract potential employees.


In addition to wages, employee benefits are another expense to consider. On top of personal health insurance, other possible benefits include 401k, paid leave, and education assistance among others. By providing benefits to employees, you can improve morale and increase productivity. To make sure you are actually getting value for your money, research the types of benefits that are most beneficial for your company.

Employee expenses can quickly add up if not carefully managed. However, by accurately estimating employee costs, you can create reasonable budgets and ensure that your business is properly staffed. Make sure to factor in wages, benefits and other related costs to get the most accurate budget.

Digital Tools

When getting started with a new business, it is important to consider various digital tools that are necessary to run your business efficiently. Digital tools vary by business and the type of industry, but the most common ones for most businesses involve social media management, website and hosting, and email management.

Social Media Management

Social media management involves using various social media channels to promote your business and connect with customers. Depending on your industry and specific needs, you may want to consider creating accounts on popular outlets like Facebook, Twitter, Instagram, YouTube, and LinkedIn. This requires investing money and effort into crafting campaigns, creating content, and engaging with your followers.

Website & Hosting

Your website is the digital front door to your business, so it is important to invest in creating a website that highlights the services and products you offer, educates potential customers, and converts website visitors into paying customers. Before you set up your website, you need to decide on a hosting provider, which will store all of your website files and enable high-speed access for visitors. You will have to pay a monthly or annual hosting fee, as well as pay for website features, such as plugins or custom designs.

Email Management

Email management is an important part of staying connected with customers, so investing in a quality email solution is necessary. Popular email management tools include MailChimp, Constant Contact, and Sendinblue. Depending on the size of your business and the number of emails you will be sending, you may need a paid subscription which can range from $10-$250/month.

Office Space

To properly launch your startup and ensure it has the physical resources to grow and succeed, attention must be paid to office space needs. Establishing an appropriate, suitable workspace is a major consideration when building your business.


Finding the perfect office space that fits your budget considerations is important and you should understand the costs. Whether you are renting a business park office or a downtown space in a big city, there are key items to understand regarding rent costs.

  • The length of your lease and how it is governed
  • Whether rent is fixed or escalates
  • What services are included (e.g. utilities)
  • Any additional costs or possible deductions


Utilities are an additional cost that you must include for your budget. It is important to negotiate what utilities are included in your lease as well as to understand the cost. You should budget for electricity, water and heat as a minimal requirement.


When it comes to furnishing your office space, you will likely need to provide a variety of furniture items. Depending on the design of your office and the way you plan to use it, you will want to secure desks, chairs, waiting area furniture and filing cabinets.

  • Make sure to consider the quantity and type of furniture needed for your office
  • Budget for any furniture delivery and installation services
  • Decide if you need additional pieces to ensure comfort and organization; for example, coffee tables, armchairs and bookshelves


Taxes are a critical part of budgeting and planning for your startup. As the business grows and expands, taxes can significantly impact your bottom line. It’s important to understand the types of taxes that are pertinent to your startup, when they are due and how to estimate their costs.

Business Taxes

As a startup business, you are likely

Licenses & Fees

Licenses and fees are additional ongoing costs you will likely incur when starting a business. Each type of business may require a different combination of licenses and fees, so be sure to consider the following fees and make sure you are compliant.

State & Local Fees

An array of state and local government fees apply to business owners. Some of these fees are:

  • Occupational/professional license
  • Workers compensation insurance
  • Unemployment insurance
  • Sales tax permits

Be sure to contact your local state or county authorities for a complete list of taxes and fees for your business.

Business Licenses

Business licenses are normally acquired from the city or county where your business is located. Depending on where you're located, it may require a separate licensing process for each physical location of your business. Again, be sure to contact your local authorities to determine what type of license you need.


Estimating expenses for a startup can be an intimidating task with lots to consider. Before you jump into creating and launching a business, it is important to properly estimate your expenses and make sure you have the right resources to succeed. To ensure a successful venture, you must:

  • Estimate expenses before starting up;
  • Take inventory of what your business needs;
  • Properly allocate resources.

By taking the above methods into consideration, you can make sure you have the resources to get your business up and running and ensure you succeed. Estimating for your startup may be difficult, but it can be a very beneficial process that will save you lots of time and money in the long run.

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