Published on August 28th, 2018 | by Jose Vasquez0
How Much Money Does It Take to Launch a Startup Tech Company?
Launching a startup typically takes a lot of money, but it doesn’t have to.
One of the most common concerns I hear from aspiring entrepreneurs is how much money it takes to launch a startup. Many of these someday-business-owners already work a full-time job, with a mortgage and family duties, so they can’t afford to finance the business on their own, and they’re intimidated to seek massive amounts of funding from angel investors or venture capitalists.
So exactly how much money does it take to launch a business?
Factors to Consider
The average business costs about $30,000 to start, but that depends on a ton of different factors:
- What you’re selling. If you’re selling products you can purchase wholesale from another provider, you won’t have to spend much (if anything) to start things up. But if your main product is a highly sophisticated app, it’s going to take a lot of time and money to get things rolling, before you can start making money.
- Who’s working for you. If you’re going it alone, you can get by without paying any salaries. Obviously, the more employees you have working under you, the higher your startup costs will be—and you can’t compensate everyone with equity.
- Office space and overhead. If you plan on having an office, that’s going to eat up at least a few thousand dollars to start. You may also need to purchase equipment, from manufacturing machines to computers and tablets.
- Permits, licenses, and paperwork. Sometimes, logistical costs can be excessive. Depending on your type of business, you may pay hundreds to thousands of dollars to get started—or next to nothing.
- Legal consultation. I recommend every new entrepreneur to talk with a lawyer before starting a business. This consultation may only cost a few hundred dollars, but if you need more help, it could cost thousands.
Ultimately, it’s possible to start a business with little to no money, if you have the right model and know which expenses to defer. From there, it’s a matter of building a line of revenue as quickly as possible so you can bootstrap your future growth.
If you’re looking for more tips on how to start a business frugally, contact me for a free consultation today!