5 startup costs you may not have considered

Planning for the startup costs for a new business is a daunting task. Here are five startup costs you may not have considered and how to plan for them.

One of the biggest mistakes a new business owner can make is also one of the easiest traps to fall into: misjudging how much it will cost to run your business.

Not only can your passion for your project cloud your vision, but it's near-impossible for even the most clear-eyed entrepreneurs to anticipate every single expense in advance.

That said, a little smart planning can go a long way toward helping your business reach its full potential. Consider this your guide to getting the hang of startup costs.

Breaking down the 3 types of business expenses

Trying to plan for every separate expense will only leave you tearing your hair out. Instead of burying yourself with a huge list of individual costs, plan for the types of costs you're likely to face.

1. One-time vs. ongoing costs

Before making a business purchase, determine whether it's a one-time or an ongoing expense. One-time charges only need to be covered today, but you'll need to pay ongoing costs even when business is slow.

2. Fixed vs. variable costs

Fixed costs don't fluctuate, making them easy to work into your operating budget. For example, your business's rent doesn't change from month to month. A variable cost, on the other hand, changes — like how the cost of materials used to make a product may vary depending on how many units you sell.

3. Essential vs. optional costs

Finally, ask yourself whether this startup cost is critical or optional. If your website is a source of revenue, then paying to host it is critical: refuse to spend that money and you would lose business. If you decide not to pay to attend a personal development conference, on the other hand, it won't affect your business operations.

Common startup costs you may not have considered

Once you've got a handle on the types of business expenses you may encounter, it's helpful to look at a few of the most common specific costs, especially ones you may have overlooked.

Employee benefits or taxes

Generally speaking, a thriving business needs employees. With those employees come expenses — and not just wages. The actual cost of a new employee should account for health benefit plans and entitlements like vacation time, Employment Insurance (EI) premiums, and Canada Pension Plan (CPP) contributions.


Whether you work from home, operate commercial vehicles, or run a manufacturing line, you'll need insurance. Business insurance tends to be more expensive than the personal insurance you're used to, and the coverage you'll need will vary widely depending on your operations. The best way to estimate your insurance cost is to get multiple quotes from insurance brokers.

Tech costs

In the digital era, it's not outlandish to consider starting a business with no money (or almost no money) and running it from your laptop without most of the overhead of a traditional business. Just don't forget that you'll still need to pay some data storage and website hosting costs. These types of expenses usually scale with your business, so while the initial cost may be low, be prepared for this variable expense to rise as your business needs become more complex.

Trademarks and domains

Defining your brand helps customers differentiate your company's goods or services from your competitors'. If you want to protect your brand, registering it as a trademark is an excellent place to start. This process involves paying registration and filing fees, which should run you a few hundred dollars, though some types of trademarks require other fees.

Similarly, your domain is your home on the internet and the ambassador that represents your brand. Registering a domain costs around $15 per year and prevents competitors from imitating your business online.

Marketing costs

Speaking of branding — marketing your company is a crucial business startup cost. However, it's also immensely variable, and results aren't guaranteed. Marketing costs can take many forms, from paying a graphic designer for professional business cards to spending thousands of dollars to showcase your products at a trade show in the hopes of collecting new business leads. As you consider how much money you'd like to funnel into your marketing efforts, make sure to quantify the benefits. Track your results over time to determine whether your spending was a smart choice. 

Starting a business is an expensive endeavour, and you're guaranteed to be handed some surprises no matter how well-prepared you feel. Stay on top of your expenses by tracking them meticulously and having some honest conversations with yourself about the kinds of investments you want to make in your business.