Startup cost calculator for a small business
This startup cost calculator adds your one-time costs to open (equipment, licenses, deposits, a website) and your monthly expenses (rent, software, insurance, pay). Choose how many months of runway to keep in the bank, and it shows the cash you need to start, your first-year cost, and the monthly revenue and number of sales it takes to break even.
How to use the startup cost calculator
- List one-time costs to open: equipment, licenses and permits, legal and formation fees, deposits, starting inventory, website.
- List monthly expenses: rent, software, insurance, phone, marketing, your pay and staff.
- Choose months of runway: how long you could cover expenses with no sales.
- Enter your gross margin and average sale.
- Read the cash needed, first-year cost and break-even revenue.
Formulas
| Cash needed to start | one-time costs + monthly expenses × runway months |
|---|---|
| Break-even revenue | monthly expenses ÷ gross margin % |
| Sales a month to break even | break-even revenue ÷ average sale |
Questions
How do I calculate small business startup costs?
Small business startup costs are your one-time costs to open plus enough monthly expenses to run until sales cover them. Add equipment, licenses, deposits and setup, then add monthly rent, software, insurance and pay times the months of runway you want.
How many months of runway should a new business have?
Runway is how many months you could pay your monthly expenses with no revenue. Many advisors suggest 3 to 6 months for a service business and longer for businesses with slow sales cycles. More runway costs more cash up front but gives you time to find customers.
How do I find my break-even point?
Your break-even point is the monthly revenue where gross profit covers monthly expenses: expenses divided by gross margin. With $2,500 a month in expenses and a 50% margin, you need $5,000 in sales. Divide by your average sale to get sales a month.
Should I include my own salary in monthly expenses?
Yes, include your own pay in monthly expenses if you need it to live. Leaving it out makes break-even look easier than it is. If you can go unpaid at first, add it as a later step so you know the revenue it takes to pay yourself.
Run the new business from one place
- CRM, estimates, invoices and online payments
- Books shows real income and expenses against this plan
- 7-day free trial of the Plus plan, no card