Building a business in 2026 is a tale of two extremes: while digital tools have made it possible to launch a service-based business for less than the price of a used car, physical industries like restaurants and manufacturing remain capital-intensive.
The average cost to start a business in the U.S. currently sits around $40,000 in the first year, though this figure varies wildly depending on your category.1
1. Digital & Home-Based Businesses
Average Range: $2,000 – $10,000 (but can be lower)
These businesses have the lowest barrier to entry because they eliminate the single biggest startup expense: real estate.
- Consulting & Freelancing: Often the cheapest to start ($2,000–$5,000). Costs are primarily limited to a laptop, professional website, and initial marketing.
- E-commerce: Slightly higher ($5,000–$10,000) due to initial inventory or software subscriptions for platforms like Shopify and digital advertising.
- Key Advantage: Low overhead and the ability to scale without increasing fixed costs like rent.
- The Bootstrap Method: Start with a $100 or $500 budget to try out your idea, adjust market fit. Is it a hobby or passion project? or something else. Common bootstrap businesses include pet sitting, cleaning, car detailing, pressure washing, landscape, and photography can turn into something much bigger with a motivated business owner.
2. Professional & Technical Services
Average Range: $15,000 – $75,000
This category includes accounting firms, law offices, and marketing agencies. While they can start small, they often require professional certifications and physical office space for client meetings.2
- Major Expenses: Professional liability insurance ($1,000–$5,000/year), high-end software licenses, and office furniture.
- Talent Costs: If you aren’t a solopreneur, payroll becomes your largest expense, often accounting for 20%–50% of the total budget.3
3. Tech & SaaS Startups
Average Range: $30,000 – $250,000+
Unlike simple online stores, tech startups building a proprietary app or platform face significant development costs.4
- Software Development: A simple app can cost $10,000–$60,000, while complex platforms easily exceed $300,000 for a Version 1.0.5
- Infrastructure: Cloud hosting (AWS/Azure) can start low but scales rapidly, often costing growing startups $2,500–$7,000 per month.
4. Retail Storefronts
Average Range: $50,000 – $150,000
Brick-and-mortar retail requires a heavy upfront investment before a single customer walks through the door.6
- Real Estate: Security deposits and first month’s rent often range from $5,000 to $20,000.
- Inventory: A boutique typically needs $20,000–$50,000 in initial stock to ensure the shelves don’t look empty.
- Fixtures & Signage: Shelving, lighting, and exterior signs usually add $10,000–$30,000 to the bill.7
5. Food & Hospitality
Average Range: $100,000 – $500,000+
Restaurants are consistently ranked as the most expensive startups to launch due to strict health regulations and specialized equipment.8
- Commercial Kitchens: Ovens, refrigeration, and ventilation systems alone can cost $40,000–$80,000.9
- Licenses: Liquor licenses can range from a few hundred dollars to hundreds of thousands, depending on the state.
- Working Capital: Most experts recommend having at least 6 months of operating expenses in the bank, as food businesses rarely turn a profit in year one.
Summary of Startup Costs by Industry (2025)
| Industry Category | Estimated Low End | Estimated High End | Primary Cost Driver |
| Online/Home-Based | $2,000 | $10,000 | Marketing & Website |
| Professional Services | $15,000 | $75,000 | Payroll & Insurance |
| Construction | $12,000 | $67,000 | Equipment & Permits |
| Retail (Physical) | $50,000 | $150,000 | Inventory & Rent |
| Tech/SaaS | $30,000 | $250,000+ | Software Development |
| Restaurant/Café | $100,000 | $500,000+ | Kitchen Equipment |
Pro-Tip: Regardless of your category, always include a 20% contingency buffer. Unexpected legal fees, supply chain delays, or marketing pivots are the “hidden” costs that sink many new ventures.
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sources:
Bureau of Labor Statistics. “Employer Costs for Employee Compensation Summary.” U.S. Department of Labor, 17 Sept. 2024, www.bls.gov/news.release/ecec.nr0.htm.
“How Much Does It Cost to Start a Business?” SBA Office of Advocacy, U.S. Small Business Administration, 2024, advocacy.sba.gov.
“The Real Cost of Starting a Business in 2025.” Shopify, 12 Nov. 2024, www.shopify.com/blog/startup-costs.
“Restaurant Startup Costs: A Guide for 2025.” Toast POS, 2024, pos.toasttab.com/blog/on-the-line/restaurant-startup-costs.
“Startup Statistics 2025: Numbers by Country & Success Rates.” DemandSage, 4 Jan. 2025, www.demandsage.com/startup-statistics/.
“110 Must-Know Startup Statistics for 2025.” Embroker, 20 Nov. 2024, www.embroker.com/blog/startup-statistics/.
