Friday, June 1, 2007

What Should I Expect to Spend my First Year in Business?

I am constantly asked the question, "What should I expect to spend the first year in business?".

The following is a compilation of normal expenses when starting your own home based small business. The figures are based off of businesses such as pet sitting and house cleaning which has relatively small start up costs since office space and retail products are not required.

  1. Write a business plan: Free template at SCORE:  a business plan will be a very important tool to ensure you know what to expect and stay on track.
  2. Obtain a Free Business Checking Account: Most banks will offer free accounts. Be sure you are aware of how many withdraws and deposits you are allowed when comparing banks.
  3. County/City Zoning for home offices – Varies (if needed): Most states will not require this since they are home based, but it is a good idea to double check to be sure.
  4. Business License (if required) – Starting at $100/yr depending on state: Some businesses do not require a license, others do. Click here and scroll to your state.  You should be able to apply online, but if you can not find the information online, find a phone number to call.
  5. State Fictitious Name (if applicable) - $50 (depends on state): If you do not need a license, you will need to register your business with the state AKA DBA (Doing Business As).  Can be found on same site as above link.
  6. General Liability Insurance – Starting at $200/yr : Pet sitting GL policies are around $200 and cleaning will be around $500. These policies will vary depending on the amount of coverage you choose to have.
  7. Dishonesty Bond - Starting at $125/year : Bonding is optional, but is a good idea if you have employees to protect your business assets.
  8. Basic office supplies - $200 : This covers paper, ink, business forms, business cards, pens and other incidentals.
  9. Computer and Printer - $1000 : You don't need anything fancy and should be able to find something relatively cheap on Ebay.  Dells go for a great price and have all you need.
  10. Business Phone (cell) - Starting at $480/year
  11. Advertising - can be up to $1000 depending on how heavy you want to advertise
  12. Association Fees (optional) - $500 : There are many assocations you can join, one being the Chamber of Commerce or the Better Business Bureau. I would recommend starting with the Chamber as that will give you the most bang for your buck and offers local advertising. Start with one or two a year and add on as your business grows.
  13. Uniform - $50 : You can get a couple of polo shirts or t-shirts with your business logo on them for a more professional look.
  14. Car (gas and service) - $2200 (weekly fill ups)
  15. Business Logo – Starting at $50 depending on level of difficulty: 
  16. Domain Name and Web Hosting – Starting at $7.95/yr for .com and .net. Go to Go Daddy.
  17. Website Creation – We can design a professional website for you for $300.  Click here
  18. Attorney costs – Starting at $400.00 (Pre Paid Legal)
  19. Accountant Fees– Starting at $250/year or you can do it yourself for $50.

Total: Around $7200/year. Keep in mind, you don’t have to do all of these options or spend as much as is listed. You can keep it within your set budget and add more each year as you get more business and decide it is time to grow even more. It is recommended you focus your money on advertising.
For more information specific to your industry, go to and scroll down to find your business. The website offers specific FAQ's to help you step by step start your own business. When you are ready to move past the research phase and actually start up your business, go to and order your professional business forms.