How much money do you need to start a business?

Research your potential market

We can’t emphasize enough how important market research is to startup businesses. You can go in with guns blazing and zero research, but many new business owners will admit that their failure was mostly due to a lack of understanding of their market.

To avoid those mistakes and launch your small business successfully, you’ll have to dig deeper into your target market and its habits. And here’s how.

• Define your business type. Is it a limited liability company, sole proprietorship, public limited company, or any other type?
• Define your buyer personas. Identify your target audience, aka the people who will use your products or services. List important factors like age, geographic location, and income.
• Get official insights. Keep yourself informed by reading market reports, statistics, and articles online regarding your business type and market.
• Evaluate your competitors. Analyze the current market players in your field and what they offer. From prices to unique selling points, availability, and even negative feedback.
• Test your ideas. To get valuable feedback, small business owners often test their products or services in a small, trusted circle of people. Do surveys and focus groups to test the customer experience and refine your offers before going public.

Consider writing a business plan

If you want to feel more secure about the future of your business, consider writing a thorough business plan. From your target market, premises, and employees to startup expenses, small business loans, marketing costs, and everything in between.

A business plan will help you thoroughly understand your business and all its aspects, needs, costs, and potential.

Make it happen today!

Start selling

One-time vs ongoing costs

One-time costs are most relevant at the beginning of your business journey. These are the common startup costs that you’ll only need to pay once. These expenses include one-time purchases like equipment and furniture, business licenses, domain names, and accounting software.

However, ongoing expenses will burden you regularly – but rightfully so, as they cover things your business needs continuously. Such as utilities, rent, salaries, and maintenance fees.

Fixed vs variable costs

Fixed costs are those business expenses that stay consistent from month to month. No matter how much or how little your business sells or produces, these costs remain the same. Fixed expenses include rent, salaries, and insurance.

Variable expenses, as the name suggests, vary depending on how much or little you sell or produce. Variable costs include shipping costs, raw materials, and labor. 

Now that you know the general areas of the most common expenses for new businesses, let’s look at them in more detail. Here are the six main operating costs to consider for aspiring entrepreneurs.  

Real estate

If you plan to run your new business from a specific location that isn’t your home, you’ll need to calculate some startup costs for premises. Whether it’s an office space, factory, storage house, or store – leasing or buying will rank up expenses for small business owners.

Equipment, supplies, and inventory

Equipment expenses are among the highest costs when starting a business. But – those are mostly one-time costs. At least for a while. 

If, later on, you need to replace or purchase new equipment, those count as unexpected costs, which you should keep in mind.

Supply expenses vary based on your business and the number of products or services you provide or manufacture. Materials, too much inventory, machinery, and office supplies can pile up, so make sure to include everything when planning your budget.

Workforce-related expenses

As a new business owner, don’t forget about payroll and other costs related to your workforce. Those expenses might not affect startup costs too much for small businesses, especially if you work alone or with family.

However, once your successful business takes off, you might need to scale it accordingly, investing more in employees, training, insurance, and other benefits. Keep those expenses in mind when planning your business startup costs.

Operational fees

Depending on the nature of your business, you might need to acquire certain permits, licenses, and liability insurance to ensure your company meets the legal requirements of your country or state.

Make sure to research what is needed for your type of business and field and include these expenses in your overall budget.

Online presence

Many businesses choose to run their own websites instead of using existing online platforms. While this option gives you full control over your website’s functionality, content, and design – it increases your fixed costs and might sound too complicated for aspiring entrepreneurs.

A basic website can cost anything from $1000 to $5000.

However, as your business grows, investing in a professional website or even an app will be a worthy one-time expense that will take your small business to the next level.

Marketing

All business owners must indulge in marketing once their company is established. It’s the only way to reach a wide audience on multiple platforms and channels and promote your products or services uniquely.

Small business owners dedicate approximately 1% of their yearly revenue to advertising. Start small and raise your promotional efforts once you have a steady cash flow. Consider traditional outlets like flyers, newspapers, and radio – and don’t forget about the modern power of social media.

Make it happen today!

Start selling

Example calculation for starting a Print on Demand business

Let’s say you’ve created a Printify account – for free – and picked your first t-shirt. For this example, we’ll use our best-selling Gildan 5000 cotton tee.

The blank t-shirt costs $8.36.

Now it’s time to set your profit margin. An average profit margin is around 30%-40%. For this example, let’s set ours at 40%. 

• That rounds up our retail price to an affordable $11.70.

But! Don’t forget about shipping! 

• The average standard shipping price for local orders is $4.75.

In total, you can list this t-shirt online for $16.45 (shipping is included in the price – which is an excellent seller tactic).

Now, let’s do some math!

A lucky customer saw your t-shirt online, fell in love, and purchased it – paying you $16.45.

From that moment on, Printify takes over the order fulfillment process, charging you:

• $8.36 for production
• $4.75 for shipping 

Total fulfillment costs: $13.11

You’ve earned $3.34

And that’s your first profit! Some small listing and selling fees may apply depending on your chosen sales channel. Those can round up to approximately $1-$2.

While this might not seem much, remember, you spent nothing in the first place. And the more you sell, the bigger your company’s revenue will be.

Vast product scope

The Printify Catalog has more than 900 products – with more to come every month. You can customize and sell anything. Apparel, accessories, baby products, pet supplies, home decor, art, games, and more.

Global fulfillment

Printify fulfills orders all around the world. We have printing facilities in the US, Canada, China, Europe, and Australia. No matter where you or your customers are – we’ll print, package, and ship your products directly to the buyers.

Free design tool

The easy-to-use Mockup Generator will easily guide even inexperienced sellers through the design process. Upload images, customize text, switch fonts and colors, create patterns – the design tool has all the necessary features.

Dedicated support

No matter the issue, our Support team will help, advise, and guide you via email 24/7 and live chat on workdays. Our agents are the best in the field – professional, kind, and happy to solve your problems.