How much does it cost to start a business?

How much does it cost to start a business

When starting a business, a novice entrepreneur often does not think about the client or even about the profit. He just believes in his product. Meanwhile, one of the most important questions – where to find enough money or how much cost to start a business and make it profitable or which legal firm has expert lawyers to resolve legal issues- often remains behind the scenes.

The financial issue for small and medium-sized businesses was, is and will be a key one. According to statistics, about 50% of new businesses are closed within the first year. As a rule, the reasons are simple – the ill-conceived financial plan and the lack of confirmation of the possibility of its implementation. This means that it is worth giving him more time at the very beginning in order to understand how to implement a business plan, how much does it cost to start a business, where to get it, and how quickly it will pay off.

Maybe one page will not be enough for your business plan, but try to make it as concise and concise as possible. And be sure to include your business financial model.

Read also: Best Business Plan Examples


Initial costs can be divided into two blocks:

  • The costs of setting up a company (individual entrepreneur or LLC): state fees, foundation capital, etc.

To become an individual entrepreneur, you need to prepare and submit only three documents to the tax office: an application for registration, a copy of your passport and a receipt for payment of the state duty (800 rubles).

For an LLC, the package of documents is approximately doubled, and the state duty is 4000 rubles, plus at least 10,000 rubles. authorized capital (it can be deposited within 4 months after registration).

  • Business start-up costs: how much do you need to start producing the product or service that you will offer your customers. As a rule, this money is taken from the start-up capital.

How much you need for this depends greatly on the structure of the business. Many entrepreneurs, when calculating start-up costs, sometimes do not think about how much money they will need in order to reach operational zero – the moment when the costs of the business have already paid off, and it can begin to bring real profits. But this is critical information: you can find how much cost to start a business, but it will not be enough to support it until the operating profit begins.

You need to understand that there are no fixed costs. In other words, it depends on the scale at which you want to start with. However, in addition to your CA, you need to work with the best business lawyers from a leading dubai law firm. They will be able to help plan your finances in a strategic fashion. This will help you understand and prioritize the costs that you would be required to make at the start of your business journey. 


Usually, two categories of expenses are distinguished: operating expenses (fixed and variable) and investment in further development. The first category is regular expenses, the second is one-time expenses. The structure of your business may not involve investment at all, but this happens extremely rarely: you will have to purchase at least a computer and invest in accounting software.

  • Fixed operating expenses are the rent of an office, warehouse, production area; salary to employees; communal payments; transport services; security and collection; loan payments; licenses (for software, for trade in goods, for services, etc.)
  • Variable operating expenses – purchase of consumables, raw materials and goods; delivery and logistics in general; taxes and insurance; advertising and marketing; search and training of employees; awards; payment of vacation and sick leave; outsourcing services, including accounting; repair and maintenance of equipment; audit; cleaning; sponsorship and charity.
  • Investments – buying equipment, vehicles or real estate; Research and development; major overhaul; buying a franchise; business development – for example, opening new branches.

And one more thing: do not forget to pledge a certain amount for unforeseen expenses. Their size is individual for each business, and there is no general formula for calculating (for example, plus 30% of the start-up capital). You need to look at the specific circumstances and even the period in which you start a business: sometimes you need to invest more than planned in order to be on time and win much more.

By the way, for a budding entrepreneur, I highly recommend buying a franchise. You will have a ready-made operating scheme of the business, in which the smallest details are spelled out, up to the design of the premises and the preparation of financial statements, and you do not have to worry that you forgot to take into account something in the structure of expenses or the peculiarities of the production of goods.

All this requires money. As practice shows, few entrepreneurs have personal capital, which will be enough to bring the business to the level of payback and its further development. You need to find investors willing to invest in the business you are creating.


It is very difficult for a start-up to take a loan from a bank: the business does not yet exist, and the bank cannot be sure of its effectiveness, and therefore of the return of its investments. It is necessary to turn to other programs and opportunities, to look for investments.

The main forms of attracting investment:

  • Investment in the authorized capital of the enterprise. An investor buys a share in a business, becomes the owner of a block of shares and a co-owner of your business.
  • Debt financing .The investor becomes your creditor, and the funds allocated to your business become debt.
  • Bank lending with collateral. You give the bank a pledge (shares and assets of the company) and receive the amount necessary for the business, which you undertake to pay within a certain period.

Bond loans are loans that you receive by issuing bonds and giving a guarantee to their owners to receive their par value within a specified time frame.

Try looking for such a platform in your area. For example, Vostochny Bank recently launched a pilot business incubator in the Jewish Autonomous Region. The Board of Trustees of the business incubator provides start-up entrepreneurs with legal , consulting and financial support . And in addition, we will help in the registration of individual entrepreneurs and LLCs and cooperate throughout the entire cycle of the client’s business development: we will save from working with unreliable counterparties, provide accounting services on special terms from our partners, legal support, reporting services to the Federal Tax Service, analytics on accounts that support the business, save unnecessary labor and optimize costs.


Funds for business development can be found not only from private investors, but also in the form of financial support from the state and state-owned companies .

All entrepreneurship assistance programs are divided into:

  • federal all-Russian;
  • departmental (from the Ministry of Education, Ministry of Agriculture, Vnesheconombank, Ministry of Labor);
  • regional (taking into account the direction of development of the constituent entity of the Russian Federation). Each region has its own programs of financial support for SMEs (on the official website or investment portal of your region, you can find out which programs are relevant for you).

Main types of financial support:

Concessional lending program for small and medium-sized businesses

The program fixes the interest rate on loans from 3 million rubles. at the level of up to 10.6% per annum for small businesses, up to 9.6% per annum – for medium-sized ones.

National guarantee system

JSC “SME Bank” becomes the guarantor of your fulfillment of your loan obligations and shares with the banks the risks associated with the deterioration of your financial condition and inability to repay the loan. Guarantee products are available to small and medium-sized businesses wishing to obtain loans from MSP Bank’s partner banks.

Investment Lift Program

  • Designed for non-resource small and medium-sized enterprises with export potential.
  • SME Corporation offers guarantee support from 50% to 75% of the loan amount for up to 15 years (guarantee cost – 0.75% per annum ) and credit and guarantee support under the SME Lending Incentive Program – from 9.6% to 10.6% , at the same time, the size of your own funds should be at least 20% of the project cost, and the loan size should be from 5 million to 1 billion rubles.
  • Loans for investment in industrial production – from 5 to 750 million rubles. for up to 7 years from the Industrial Development Fund... Rate – 1% or 5% per annum (depending on the financing program). You need to have at least 15% of the project cost.
  • Support Russian Direct Investment Fund: financial (participation in equity capital, including by providing mezzanine financing) and non-financial (you can get advice on creating a strategy, expand the base of clients and counterparties, get support when entering the international market).
  • The Russian export center is ready to provide legal, consulting and credit insurance support to small and medium-sized businesses planning to export goods and services abroad. You can also apply to the REC for export financing.

Preferential leasing program

The program of concessional leasing of equipment allows you to take the means of production you need at a rate of 6% per annum for domestic equipment and 8% per annum for foreign equipment .


Different regions may have different requirements for obtaining subsidies – be sure to go to the official website or investment portal of your region and specify which subsidies you can receive.

  • Subsidy for starting your own business: buying raw materials, materials, intangible assets.
  • Subsidy for new individual entrepreneurs if the entrepreneur is not employed, has a disability or is the only parent of the child.
  • Subsidy to reimburse part of the cost of lease payments.
  • Loan interest subsidy.
  • Subsidy for the purchase of equipment.
  • Subsidy for the modernization of production.
  • R&D subsidy.
  • Subsidy for exhibitors, etc.

Not everyone can get help from the state: you will be denied if you provide credit or insurance services, open a pawn shop or gambling establishment, extract minerals or sell excisable goods. In addition, non-residents of the Russian Federation will also be denied assistance.

Please note: after the grant of the subsidy, you must report to the state about the targeted spending of funds and return the balance (if any). If funds are misused, you will have to return the full amount of the subsidy, so worry about getting documentary evidence of your expenses.


Special funds can compensate start-up entrepreneurs up to 500,000 rubles. the cost of setting up a business. This concerns areas that are significant for the state: agriculture, innovation, education, areas of social importance and a few more. Grants are awarded on a competitive basis, and the conditions for receiving them depend on the specific region.


Often, especially at the start of a business, there are situations when it is necessary to make an urgent payment (taxes, purchase of raw materials, payment of salaries to employees), and there is not enough money in the account: the counterparty has not yet transferred funds to you. There is a cash gap that needs to be compensated. And here you can resort to the overdraft service that many banks provide: you have a certain limit that you can use for mandatory payments, and then repay when funds are credited to the account. Be sure to check with the bank if it is possible to open an overdraft for you. Some banks do this not only for regular, but also for new clients, at the time of opening a current account.

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