The components, not the average
“Average startup cost” figures are meaningless — a freelance designer and a brewery share a category called “business” and almost nothing else. What you can do is price your components:
- Formation: State LLC formation filing fees for standard flat-fee filings run from $35 (Montana) to $500 (Massachusetts), before any expedited or electronic-filing charges (October 2026 figures; sources below), plus licenses, permits, and possibly publication costs.
- One-time setup: equipment, buildout, initial inventory, branding, website.
- Monthly burn: rent, payroll, software, insurance, loan payments — everything that repeats.
- Runway: monthly burn × the months until revenue covers costs. This is the number that kills businesses, not the formation fee.
Estimated ranges by business type
Our estimates, not surveyed data. We prepared these ranges from the component categories above. They show orders of magnitude so you can sanity-check your own quotes — replace every cell with your real numbers before making decisions.
| Business type | Estimated launch range | What drives it |
|---|---|---|
| Solo service / freelance | $500–$5,000 | Mostly a laptop, formation, and insurance |
| Online store (no inventory) | $1,000–$10,000 | Platform, branding, initial marketing |
| Food / beverage | $25,000–$250,000+ | Buildout, equipment, permits, health compliance |
| Brick-and-mortar retail | $50,000–$300,000+ | Lease deposits, fit-out, opening inventory |
| Software product | $10,000–$150,000+ | Development time is the hidden cost — price founder hours too |
The cost founders underestimate
It's never the filing fee. It's time-to-revenue: the months of rent, salaries, and loan payments between “open” and “profitable.” A $20,000 buildout with a 6-month ramp at $8,000/month burn is really a $68,000 launch. Budget the ramp, not just the ribbon-cutting.
Build the full picture with our startup budget template and first-90-days plan.
Assumptions and limits
- The ranges above are estimates prepared for this guide from the cost categories it lists, not surveyed data.
- Education only — not financial advice.
Sources
Figures as of October 2026, verified October 28, 2026; reviewed whenever the official sources below change and at least quarterly.
- State LLC formation filing fees for standard flat-fee filings run from $35 (Montana) to $500 (Massachusetts), before any expedited or electronic-filing charges — filing electronically in Massachusetts, for example, brings the total to $520. Per-member states can run higher: Tennessee charges $50 per member (minimum $300, maximum $3,000). Fees verified October 28, 2026, against Secretary of State fee schedules (MT, MA, TN linked in Sources). Basis: Montana Secretary of State, Business Services Filing Fees (articles of organization, $35); Massachusetts Corporations Division filing fees and 950 CMR 112.29 (certificate of organization, $500, plus the $20 expedited fee on fax/electronic filings); Tennessee Secretary of State, Form SS-4270 (per-member fee).
Common questions
What's the cheapest business to start?
Service businesses you run yourself — freelancing, consulting, cleaning, tutoring — typically need only formation costs, basic equipment, and insurance. The capital requirement is low because there is no premises, no inventory, and no staff to fund before the first sale; the real requirement is your time, which is why pricing your hours honestly matters from day one.
How much cash reserve should I have before launching?
Enough to cover monthly burn through your realistic time-to-revenue, plus a buffer. A $20,000 buildout with a six-month ramp at $8,000 a month is really a $68,000 launch, because the ramp costs more than the opening. If you cannot fund the ramp, shrink the launch — start smaller, pre-sell, or keep the day job longer — rather than launching underfunded.
Can I start a business with no money?
Some service businesses start near zero cash, but “no money” usually means “paid for with unpaid time.” Your hours are a real cost even when no invoice arrives for them, so price your time honestly — otherwise the business looks profitable only because its biggest supplier, you, is working for free and hiding the true cost of every sale.
Prepared with AI assistance; editorial approach and corrections are described in our method & editorial policy. Examples are illustrative, not case-study results. Last reviewed: . Educational content only — not financial, legal, or tax advice. Budgets shown are illustrative examples, not benchmarks; your costs will differ.