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Start-up costs when launching a new business

4-minute read

To give your business the best chance of success, it's important to start with a clear idea of the initial costs involved, both to establish the business and to start trading – and then to keep it running.


Key take-outs

  • Start-up costs will vary according to your individual business scenario
  • Research will help you get an idea of likely costs
  • Create a cash flow forecast/budget as part of your business planning
  • If estimated costs are high, consider finance if required.


What are you getting into?

Your business start-up costs will vary depending on whether you're starting a business from scratch, taking over an existing business, investing in a franchise, or have specific industry-related costs. So, what are some of the basic things you may need to consider?

1. Do your research

Three ways that may help you establish a ballpark figure of how much money you need to begin your business are:


  1. Put together a business plan and consider making an appointment with an accountant or financial adviser. They should be able to give you an overview of what your start-up costs may be for the first 12 months.
  2. Talk to small business owners who are running similar ventures about what costs you might expect. Industry associations can also be a good source of information, as are online forums where people may already be sharing relevant information.
  3. Consider attending a presentation or completing a workshop on developing a business finance plan. Search for events online as they can provide useful hints, tips and tools on how to get your business started.

2. Factor in costs

Every small business owner has different requirements when first setting up. This checklist will help you understand some of the costs you may need to factor in.



Potential costs

Registrations and professional
  • Business registration
  • Domain name registration
  • Accountant's fees
  • Legal fees
  • Professional associations registrations and fees
  • Licences and permits
  • Food handling/Responsible Service of Alcohol certificates.
Setting up shop
  • Office equipment and furniture - desks, chairs, cabinets etc.
  • Shop front equipment - cash registers, refrigerators
  • Stationery and office supplies
  • Utilities such as water, electricity and phone lines
  • Vehicles
  • Other plant and specialist equipment
  • Computers, printers, scanners, modems and IT servicing
  • Business software, information systems, accounting, security, design, documents
  • Internet and mobile plans.
  • Research expenses
  • Website
  • Advertising
  • Logo
  • Letterhead, brochures and business cards
  • Signage
  • Printed and online directories.
  • Rent/lease agreement
  • Stock
  • Equipment
  • Cleaning
  • Fit out/modifications
Staff and ongoing running costs
  • Salaries
  • Health and Safety - first aid kits, alarms, extinguishers
  • Uniforms, safety clothing
  • Recruitment and Training
  • Tools

3. Manage your expenses

It might be good idea to split your costs between ongoing and one-off costs. It can also help if you overestimate costs, so there are no major surprises later in the year.


One-off costs should include everything necessary to get the business ready for trading on day one.


For managing ongoing costs, you should consider developing a cash flow forecast/budget. This will give you a sense of when money is both flowing in and out of your business over the coming 12 months.

4. Identify break-even

Break-even is the point at which you cover all of your costs. What you need to understand is how your costs behave in relation to your sales. Some of your costs will increase as your sales increase. These are your variable costs. Other costs will remain constant over a range of sales. These are your fixed costs.


Once you know your break-even point, you can more accurately plan how many sales you need to achieve in order to start making a profit. This will be of great assistance when you are planning your business set up costs. Remember to be realistic in your cash flow planning and allow some space in your calculations for unforeseen expenses.

5. Consider finance

You may need to borrow money to launch your new business, to buy stock, purchase vehicles and equipment, or cover fit-out costs.


A business overdraft or unsecured business overdraft could help with financing initial set-up costs and trading through the period it takes to achieve break-even. You might also consider a business loan or unsecured business loan1.


Explore your options, the costs and conditions with your bank; and check in with your accountant if necessary. 


Read more

How to write a business plan

A business plan is the building block that can help you reach your business goals.

4 reasons to separate business banking from personal

One of the most useful things you can do when starting a business, is to keep your business finances separate from your personal.

How could I fund vehicle, machinery and equipment purchases?

Just about every business will need to spend on equipment, even if it’s just for a computer and mobile phone.

Things you should know

1. Westpac’s products are subject to terms, conditions, fees and charges; and certain criteria may apply. Before making a decision, read the disclosure documents for your selected product or service, including the Product Disclosure Statement and T&Cs for Westpac business bank accountsbusiness loans and overdrafts by clicking the above links; and consider if the product is right for you.


This information does not take into account your personal circumstances and is general. It is an overview only and should not be considered a comprehensive statement on any matter or relied upon. Consider obtaining personalised advice from a professional financial adviser and your accountant before making any financial decisions in relation to the matters discussed in this article, including when considering tax and finance options for your business. Westpac does not endorse any of the external providers referred to in this article.