The Cost of Starting Up

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Entrepreneurs expect start-up costs to be rather modest, reports John Schmeltzer today in a Chicago Tribune article. According to a recent study conducted by the Office of Advocacy of the Small Business Administration, soloists expect $6,000 to cover their start-up costs while firms involving several people see $20,000 as sufficient.

Though they expect start-up costs to be low, their expectations are high. Soloists expect to be recording $90,000 in revenue annually within five years time while firms with several people expect $125,000.

Sounds great, but as the writer points out, one thing is missing: working capital. Entrepreneurs surveyed didn't factor in what it would take to keep their companies operational after the start-up phase.