Starting a business in 2025 needn’t be overwhelming. I understand there’s a lot to consider, and as a new entrepreneur, one of your main concerns is money.
Can you afford it? Will the business sustain you? How will you juggle your side hustle alongside life commitments or another full-time job? Exactly how much does it cost to start a business in 2025?
There’s no doubt a lot to think about, but overthinking can lead to hesitation. Instead, read through this comprehensive guide, including a breakdown of startup costs and tips to manage expenses at every step.
So, instead of overthinking, use this guide to navigate the financial aspects of your new venture.
Fixed costs to start a business in 2025
The fixed costs of your startup will depend on the type of business. As a freelancer, you can start a business for $0, assuming you already own a PC and have access to Wi-Fi.
Businesses requiring more involvement from operations, products, or digital assets like websites may need to spend more.
Every business is unique, but you can use the guides below to determine how much it costs to start your dream business in 2025.
Domain, website, or online store
Most startups need a website to trade, receive inquiries online, or establish a presence in Google search and Google Maps for local search.
If you’re starting a service-based business, you might drum up business without a website by using social media platforms like LinkedIn.
This approach helped me keep my startup cost at $0 for two years.
To save on website costs, ecommerce stores can create shops on Etsy and pay minimal fees to upload products, with commissions on sales. Alternatively, you can start affiliate marketing on TikTok, which costs nothing to set up.
While free alternatives are beneficial, your business will likely grow to a point where a more robust online presence is necessary.
Ecommerce merchants should be prepared to invest in a point-of-sale (POS) system or technology to accept online payments.
For entrepreneurs who need a website, start by sourcing your domain and hosting. Non-premium domains generally cost between $1 to $20, depending on the deal and the number of years you decide to register the domain for.
To explore prices and buy a domain, search for your desired website URL.
Tips for managing domain costs: explore cheaper domain suffixes. Generally, but not always, .com or .co.uk are more expensive than .co, .io, .site, or .shop. Spend some time exploring suffixes and pricing.
Your website host is required to get your site on the internet and in front of customers. For this, you’ll need to get a web hosting plan.
Tips for managing hosting costs: pay annually or for multiple years in advance to save money.
Related: How to start an online business.
Website design and development
For those who need to create a website, you can use drag-and-drop editors. This is perfect if you want to cut costs. You can build brochure websites or use the online store builder if you’re starting with ecommerce.
If you’re not willing to create the website yourself, there are affordable website design services to ensure a website you and your customers will love. I’ve known entrepreneurs who started with websites that are quite affordable.
Tips for managing website design and build costs: if designing and developing a website is overwhelming but you want to save costs, commit a couple of hours to create a website with GoDaddy. It’s easy, and you might surprise yourself.
While you’re creating a website, consider creating a logo to display on your web pages and other brand collateral. Services like GoDaddy Airo™ Plus Logo are free and let you quickly create this key piece of branding.
Legal costs to register a business
Legal costs vary greatly depending on the type of business and the required legal coverage. If you’ve figured out how to create an LLC and you’re ready for the associated costs, you can expect to pay anywhere from $485 to more than $1,000.
More savvy startups may handle some legal requirements themselves, thus saving money.
Tips for managing legal costs: focus on the essentials. As a new business owner, it can be tempting to cover every angle, but this may not be required initially. Identify what’s necessary to start up and note what can be acquired later as the business grows.
Marketing
Marketing is one of the most flexible costs when starting a business. The options are endless. At the cheapest, GoDaddy can support your business from $85/month, but a more multi-channel approach will cost $500/month*.
The advantage of marketing is that you can do a lot on your own. If you manage social media platforms to drum up business, you can do well without spending a penny. However, it is time-consuming, so that time investment must be considered.
If you’re thinking about marketing your business with ads, consider the cost of ads versus the benefit.
Generally, it’s not useful to start with a budget that’s too small because you won’t get the data needed to decipher a good ads campaign from a bad one. Don’t start an ads campaign until you’re ready to commit.
Tips for managing marketing costs: choose your marketing channels carefully and research which ones are likely to have the biggest impact. It’s better to cover fewer channels well than many channels poorly. You can always scale once you’ve mastered one platform.
Variable costs to start a business in 2025
Some prices are highly variable depending on location and the needs of the business. These items are listed below.
Physical location
The advantage of starting a business in 2025 is that many businesses don’t need a physical location. However, if you’re opening a brick-and-mortar store or plan to work in an office, you’ll need to consider rent or mortgages.
Products or inventory
If you need to buy and hold stock, you’ll need to make an initial investment upfront. The cost will vary based on the units required.
Manage these costs by carefully considering what you’re likely to sell and what you can sell if you buy stock in bulk.
Tips for managing product and inventory costs: ask suppliers about their minimum order quantity (MOQ) and how costs vary with quantity. Also, consider drop shipping to avoid upfront costs.
Staff
Staff costs depend on seniority and location. You’ll need to consider the minimum wage of your state, but the federal minimum wage is $7.25.
Tips for managing staffing costs: online businesses can outsource work to talented freelancers or hire freelancers from different parts of the world. You can also take on more work yourself or use software and AI to support your business.
Taxes
Beyond initial registration, startups need to consider taxes. Tax rules vary, so check the regulations within the country where your business is registered.
Paying taxes usually means setting aside a percentage of your income to cover costs, monitoring and recording your expenses for tax write-offs, or hiring an accountant to manage taxes for you.
Tips for managing tax costs: the more self-sufficient you are, the less you need to pay an accountant.
Many small businesses can manage early tax returns themselves, but a growing business will likely need an accountant eventually. Manage costs by setting aside money regularly.
Tax deductions for small businesses
Maximizing tax deductions is essential for reducing your small business's tax liability. Here are several key deductions to consider:
Home office expenses
If you use part of your home exclusively for business, you can deduct a portion of your rent or mortgage, utilities, and maintenance costs.
Business meals
Meals with clients or business partners can be partially deductible, typically up to 50% of the meal cost, provided they are necessary for business discussions.
Vehicle expenses
You can deduct costs related to business use of your vehicle, either by tracking actual expenses or using the standard mileage rate set by the IRS.
Marketing costs
Expenses for advertising, promotional materials, and marketing campaigns are fully deductible as business expenses.
Employee salaries and benefits
Wages, salaries, and benefits provided to employees are deductible, helping reduce your overall taxable income.
Professional services fees
Fees paid to consultants, lawyers, and accountants for business-related services are deductible expenses.
Office supplies and equipment
Purchasing office supplies, computers, and other equipment necessary for your business operations can be deducted or depreciated over time.
Rent and utilities
Rent for office space and utilities such as electricity, water, and internet services are deductible business expenses.
Education and training
Costs associated with employee education and training programs that enhance business skills are deductible.
Retirement plan contributions
Contributions to employee retirement plans are deductible, providing both tax benefits and incentives for employee retention.
Business insurance premiums
Premiums for business insurance policies, including liability and property insurance, are deductible expenses.
Bad debt expenses
If your business has uncollectible receivables, you can deduct them as bad debt expenses.
Charitable contributions
Donations made to qualified charitable organizations are deductible, supporting both your community and your tax strategy.
Interest expenses
Interest paid on business loans and credit lines is deductible, reducing your taxable income.
Depreciation and amortization
You can deduct the depreciation of business assets and the amortization of intangible assets over their useful lives.
Research & development (R&D) and other tax credits
Investing in research and development can qualify your business for R&D tax credits, which directly reduce your tax liability. Additionally, other tax credits may be available based on your business activities and location.
Consulting with tax professionals
To maximize your deductions and ensure compliance with tax laws, it’s crucial to consult with tax professionals. They can help you identify eligible deductions, navigate complex tax regulations, and implement strategies tailored to your business's unique needs.
On-going expenses
As a small business, you’re likely to have ongoing expenses. Over time, you might invest in subscriptions or software, or have shipping costs for e-commerce.
Costs will vary based on your requirements.
Tips for managing ongoing expenses: ongoing expenses can creep up on business owners, so be mindful of monthly subscriptions and software you’ve purchased. If you’re not using it, you’re wasting money.
Unexpected costs
Any business is likely to encounter unexpected costs eventually. Prepare by holding a budget for emergency situations.
Unexpected costs could include personal illness, the need to hire a consultant to solve a problem quickly, or issues with your physical store.
How to fund your startup or small business
Funding your business is one of the first—and most important—financial choices most business owners make. How you choose to fund your business could affect how you structure and run your business.
Personal investment
Funding your business on your own can be a safe option. It removes the stress of meeting investor expectations and can feel rewarding to build your new business with your own means.
Personal investment may require saving for a few years before you start, but the freedom from other stakeholders can be highly desirable in the early stages.
Borrowing money through contacts
You can borrow money from personal contacts, such as friends and family. If you choose this route, it’s important to treat it as a formal investment: draw up contracts, separate personal and business conversations, and clearly define the terms.
Loans
Securing loans from banks is an option for funding. Banks typically provide calculators on their websites so you can estimate what you might be able to borrow.
Be aware that it isn’t easy to get accepted for a bank loan; 80-90% of startups fail, so banks are naturally careful about whom they lend money to.
If you have trouble getting a traditional business loan, SBA-backed loans are a viable option. The U.S. Small Business Administration (SBA) can guarantee your loan, reducing the risk for lenders and making them more willing to provide funding.
Use tools like SBA’s Lender Match to find lenders who offer SBA-guaranteed loans.
Venture capital
Venture capital involves investors providing funding in exchange for an ownership share and an active role in the company.
Venture capital typically focuses on high-growth companies and invests capital in return for equity rather than debt.
To get venture capital funding, follow these steps:
- Find an investor: Look for individual investors—sometimes called “angel investors”—or venture capital firms. Ensure the investor is reputable and has experience with startups.
- Share your business plan: The investor will review your business plan to ensure it meets their investment criteria, focusing on industry, geographic area, or business development stage.
- Due diligence review: Investors will examine your management team, market, products and services, corporate governance documents, and financial statements.
- Work out the terms: If they choose to invest, agree on a term sheet that outlines the investment’s terms and conditions.
- Investment: Once the term sheet is agreed upon, the investment is made, and the venture fund may take an active role in your company.
Crowdfunding
Crowdfunding raises funds for a business from a large number of people, called crowdfunders. Crowdfunders typically do not receive ownership in the business or expect a financial return. Instead, they might receive a product or special perks as a thank you for their contribution.
Crowdfunding is popular for creative projects or physical products and is low risk for business owners since you retain full control of your company. If your business plan fails, there’s usually no obligation to repay the crowdfunders.
However, it’s important to read the fine print of each crowdfunding platform to understand your financial and legal obligations.
Create a budget for your first year
Let’s look at various cost summaries for businesses with different needs.
Freelance business
Your freelance service-based business cost summary is one of the cheapest businesses to start, and it might look like this:
| Expense | Cost | Notes |
| Laptop | $0 | Freelancers can start with any laptop they have access to. |
| Internet | $0 | Working from home eliminates additional costs for Wi-Fi. |
| Social Media | $0 | Organic posts don’t cost anything and can generate leads and clients. |
| Total | $0 |
Service-based business
For those starting a service-based business and desiring a more professional appeal, you can kick off a new business venture with a functioning site. Here’s what the cost summary can look like:
| Expense | Cost | Notes |
| Domain | $1.67* | Use suffixes like .site to keep costs low. |
| Create a website | $0 | Get creative and build your own site with GoDaddy. |
| Website Design Services | $350 and up | Optionally choose website design services. |
| Web Hosting | From $215.64/3 years* | Host your website for 3 years to pay less per annum. |
Marketing costs for the first year
If you choose to work with a service provider like GoDaddy, your digital marketing services can be covered for as low as $85.00/month.
| SEO and Website Updates | From $85.00/month. |
| SEO, Website Updates, and Social Media | From $185.00/month (+$50 ad spend). |
| SEO, Website Updates, Social Media, Content, Emails, Reputation Management, Brand Guides, and a Professional Photo Shoot | From $500.00/month (+$50 ad spend). |
| Minimal Tota | $85.00/month* There will be processing fees involved if you accept credit card payments. |
Businesses you can start with a small budget
The digital world has opened opportunities for starting a business for free or with a small budget. Assuming you’ve got a PC, Wi-Fi, and a desire to work or use social media to generate leads, you can start any of the following small business ideas for free:
- Freelancing in digital services like writing, SEO, PPC, social media management, or email marketing.
- Freelancing on platforms like Upwork or Fiverr.
- Affiliate marketing through social media platforms like TikTok. You will need to gain 1,000 followers before you can start this one.
- Consulting in a skill you already have (or can learn for free online).
Local services you can start with little to no start-up costs:
- Dog walking.
- Babysitting.
- Homesitting.
- Handyman services.
- Tutoring.
Some businesses require a small budget to start, for example:
- Selling digital downloads on Etsy. You’ll pay a small fee to upload products, but then nothing until you make your first sale where you pay a percentage to Etsy.
- Dropshipping.
- Selling on eBay.
- Print services (assuming you’re handling the printing).
- Related: Check out our guide on online business ideas.
Closing thoughts on starting a business in 2025
There are many resources and technologies that can boost the success of your business. For example, learning how to write a business plan (with help from tools like ChatGPT) can easily jump-start your business path in the right direction. You can also check out our simple business plan template.
While there might be expenses associated with starting a business, don’t forget the financial rewards that come with a successful venture. Keep that momentum going and make 2025 the year you found a business to be proud of.
*Pricing data valid as of March 2023. All prices listed are subject to change.
