Skip to main content Skip to main navigation
Skip to access and inclusion page Skip to search input

Set up costs when starting a business

4-minute read

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

Key take-outs
  • Costs will vary according to your individual scenario
  • Research will help you get an idea of likely costs
  • Create a cash flow forecast/budget as part of your business planning
  • Consider finance if necessary


What are you getting into?

Your business start-up costs will vary depending on whether you’re starting from scratch, taking over an existing business, buying a franchise, or have specific industry related costs. So, what are some of the basic things you may need to consider, no matter which of these is the case?

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 set up costs may be for the first 12 months.
  2. Talk to people 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 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 business will have different set up requirements. 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
  • Solicitor's fees
  • Profession registrations and fees
  • Licences and permits
  • Food handling certificates/Serving of alcohol
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
  • Software, accounting, security, design, documents
  • Internet and mobile packages
  • Website
  • Advertising
  • Logo
  • Letterhead, brochures and business cards
  • Signage
  • Printed and online directories
  • Rent/lease agreement
  • Stock
  • Equipment
  • Cleaning
  • Fit out/modifications
  • Business insurance such as public liability, income protection, vehicles, stock, workers' compensation etc.
  • Bank accounts1
  • Working capital
  • Banking packages, such as overdraft facilities
  • Business loans and overdrafts
  • Salaries
  • Health and Safety - first aid kits, alarms, extinguishers
  • Uniforms, safety clothing
  • 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. 


Next steps: Watch the Getting Started in Business webinars

  • Cash managementCash management
  • Statutory obligationsStatutory obligations
  • Business structuresBusiness structures
  • Risk managementRisk management
  • Turning your vision into a planTurning your vision into a plan

This webinar is produced by the Davidson Institute, Westpac's home of free financial education resources, building confidence today for a better financial future.


Read more

How to write a business plan

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

How to create a cash budget

Your business will always need cash to grow. Here’s a guide to producing a cash budget that could help you keep track of your cash flow and plan for the unexpected.

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.


The information in this article (including any finance information provided) is general in nature and does not take your objectives, financial situation or needs into account. Consider its appropriateness to these factors; and we recommend you seek independent professional advice about your specific circumstances before making any decisions.