Beginner level · Module 1: Business Startup Fundamentals · Lesson 3 of 3
Estimating Start-Up Costs
Work out how much money is needed to open.
In this lesson you will
- List all start-up costs
- Add contingency and plan funding
Key concepts
equipmentfirst stocklicences and feescontingency
The lesson
Start-up costs include equipment, first stock, packaging, licences and fees, deposits, and launch marketing.
Get real prices from suppliers and the local authority rather than guessing; add a contingency of about 10% for surprises.
Compare the total with what you have and plan the gap: savings, family, a savings group or a small loan.
Step by step
- List every start-up item.
- Get real prices.
- Add contingency.
- Plan how to fund it.
Start-up costs for a liquid soap business
Listing every start-up cost and adding contingency.
| Item | Working | Amount |
|---|---|---|
| Equipment (buckets, mixing tools, measuring jugs, gloves) | supplier quotes | 150,000 |
| First ingredients | enough for the first month | 300,000 |
| Bottles and labels | first 400 units | 120,000 |
| Trading licence and fees | check official fees | 50,000 |
| Launch marketing | flyers and WhatsApp posts | 30,000 |
| Subtotal | sum of the above | 650,000 |
| Contingency | 10% × 650,000 | 65,000 |
| Total to start | 650,000 + 65,000 | 715,000 |
Explanation
Contingency covers the costs nobody expects — a broken bucket, a price rise, a second licence visit.
If you have 400,000 SSP saved, the plan must show where the other 315,000 SSP comes from, or which items can wait.
Check your understanding
150,000 + 300,000 + 120,000 + 50,000 + 30,000 = 650,000; × 1.10 = 715,000.
Practice activity
Prepare the start-up cost estimate for your idea.
Expected result: A complete estimate with contingency and funding plan.
Check your understanding
-
Why add contingency?
Show answer
Unexpected costs always arise.
-
Where should prices come from?
Show answer
Real quotes from suppliers and authorities.
Taught live by an instructor — online or in person. Free course lessons are for self-study and do not lead to a certificate — see registration options.