Short answer: A small, low-cost business needs about $7,175 in cash to start with the starting numbers here: $3,450 of launch costs, $1,325 of first-year fixed costs and a $2,400 reserve, before state fees. Choose your state to add them; in California it comes to $8,055, in Texas $7,475. Need an LLC at all? Do You Need an LLC? LLC vs. Sole Proprietor.
Check our math
Here is the result above, step by step, using the numbers already filled in.
- One-time launch costslicenses $150 + website $300 + equipment $1,500 + supplies $500 + marketing $500 + setup $500 + formation $0 = $3,450
- First-year fixed costsannual report $0 + agent $125 + insurance $600 + software $600 = $1,325
- Cash reserve$800 × 3 months = $2,400
- Cash you need to start$3,450 + $1,325 + $2,400 = $7,175
With no state chosen, state fees are $0. The table below shows the total for each state we've added.
How this calculator works
Startup cash has three parts. Launch costs are paid once: forming the business, licenses and permits, a website, equipment, starting inventory, launch marketing and setup help from a lawyer or accountant. First-year fixed costs come due whether or not you've made a sale: the state annual report, a registered agent, insurance and software. The reserve covers your monthly operating costs while revenue builds.
When you choose your state, the LLC filing fee and the first year's annual report and LLC tax fill in from our state table (checked October 2026). California's $800 yearly LLC tax and New York's publication requirement are the big ones to watch. City and county licenses vary too much to fill in, so check your local office.
The reserve is the input that matters most. Most new businesses take longer than planned to reach steady revenue, so three months of costs is a floor, not a target.
Cash needed to start, by state
| State | LLC filing fee | First-year report and LLC tax | Total with starting numbers |
|---|---|---|---|
| California | $70 | $810 | $8,055 |
| Texas | $300 | $0 | $7,475 |
| Florida | $125 | $139 | $7,439 |
| New York | $200 | $5 | $7,380 |
| Pennsylvania | $125 | $7 | $7,307 |
| Illinois | $150 | $75 | $7,400 |
| Ohio | $99 | $0 | $7,274 |
| Georgia | $110 | $60 | $7,345 |
| North Carolina | $125 | $200 | $7,500 |
| Michigan | $50 | $25 | $7,250 |
State fees from state filing sites, checked October 2026. All other inputs at the calculator's starting numbers.
Worked examples
Home-based service business
Uses a laptop you already own: $300 of equipment, $100 of supplies, a $200 website, $300 of launch marketing and $400 a month of costs, 3 months in reserve.
| Result | |
|---|---|
| Cash to start | $4,075 |
| Launch costs | $1,550 |
| Reserve | $1,200 |
Equipment-heavy business
$4,500 of equipment, $2,000 of starting inventory, $1,200 of insurance and $1,500 a month of costs, with 4 months in reserve.
| Result | |
|---|---|
| Cash to start | $15,875 |
| Launch costs | $7,950 |
| Reserve | $6,000 |
Using your result
Go line by line and replace each starting number with a real quote or price: the equipment you'll buy, your insurer's quote, the software you'll actually use. The total is only as good as the inputs.
Compare the total with the cash you have and decide how to cover any gap before you spend: savings, a smaller launch, or financing. If you'll borrow, see the payment in the business loan calculator and add it to your monthly costs.
Then check how long it takes to start earning it back. The break-even calculator shows the sales you need each month, and the cash runway calculator shows how long your reserve lasts if sales start slower.
At tax time, you can generally deduct up to $5,000 of startup costs and $5,000 of organization costs in your first year, reduced once either total passes $50,000; the rest is deducted over 15 years. Equipment has its own rules (IRS Publication 583).
What it doesn't cover
- Local licenses, permits and zoning fees vary by city; check with your city or county.
- We've added state fees for the 10 largest states so far; for others, enter fees from your state's filing website.
- It doesn't include what you'll pay yourself before profits start; add that to monthly costs if you'll need it.
- Financing costs aren't included.
Read more
Frequently asked questions
How much does it cost to start a small business?
It ranges widely. With the calculator's starting numbers, a small low-cost business needs about $7,175 plus state fees. Equipment, inventory and the size of your cash reserve make the biggest difference.
How much cash reserve should a new business have?
At least three months of operating costs, and more if sales will take time to build. The calculator lets you choose from 0 to 12 months.
How much does it cost to form an LLC in California?
The filing fee is $70, and California's $800 minimum LLC tax is due every year, including the first. See the table above for other states.
Are startup costs tax deductible?
Generally yes. You can deduct up to $5,000 of startup costs and $5,000 of organization costs in your first year, reduced once either passes $50,000, and deduct the rest over 15 years.
Should I include my own pay in startup costs?
If you'll need to pay yourself before the business makes a profit, yes. Add it to monthly operating costs so the reserve covers it.
What startup costs do people forget?
Insurance, software subscriptions, licenses and the months of costs before revenue arrives. The reserve is often the biggest line, and the one most likely to be left out.
Do I need an LLC to start a business?
No. Many businesses start as sole proprietors. The LLC cost calculator shows what an LLC adds in your state.
Sources
Reviewed against IRS sources: October 2026 · Updated October 2026 · By the NetTakeHome team. Estimates for planning, not tax, legal or financial advice.