How Much Does It Cost to Start a Business in 2026?
Americans started over 5.1 million new businesses in 2025. Whether you are opening a restaurant, running a food truck, or starting a cleaning service out of your garage, the first question is always the same: how much will this cost?
This guide breaks down real startup costs for 5 popular small business types based on data from state filing offices, industry reports, and insurance databases. We cover national averages, state-by-state comparisons, and practical tips for reducing your initial investment.
Startup Cost Summary by Business Type
| Business Type | Budget | Mid-Range | Premium |
|---|---|---|---|
| Cleaning Service | $2,000 | $10,000 | $50,000 |
| Landscaping Business | $5,000 | $50,000 | $150,000 |
| Hair Salon / Barbershop | $25,000 | $100,000 | $300,000 |
| Food Truck | $50,000 | $125,000 | $250,000 |
| Restaurant | $95,000 | $275,000 | $750,000 |
Figures represent national averages. Your actual costs depend on your state, city, and specific business plan.
The 10 Cost Categories Every Business Faces
Regardless of business type, your startup costs will fall into these categories. The relative weight of each category varies significantly by industry.
- Registration & Legal ($200 - $3,000)
LLC filing fee (varies by state), EIN (free), operating agreement, legal consultation. The LLC fee alone ranges from $35 in Montana to $500 in Massachusetts. See our LLC cost by state guide for the complete table. - Permits & Licenses ($50 - $50,000)
The widest cost range of any category. A cleaning service may need only a $50 business license, while a restaurant with a liquor license can spend $14,000+ on permits alone. City-level requirements add significant variation. - Equipment ($300 - $200,000)
From a $300 cleaning supply kit to a $200,000 commercial kitchen. Buying used equipment can save 40-60% on this category. - Vehicle ($0 - $175,000)
Not every business needs a dedicated vehicle. Cleaning and landscaping businesses may use a personal car initially. Food trucks, however, represent the single largest line item at $30,000-$175,000. - Buildout & Renovation ($0 - $350,000)
Brick-and-mortar businesses (restaurants, salons) face significant buildout costs. Home-based businesses (cleaning, landscaping) skip this entirely. - Initial Inventory ($100 - $35,000)
Your first stock of supplies, products, or raw materials. Restaurants need the most; cleaning services need the least. - Insurance ($500 - $15,000/year)
General liability is essential for every business. Workers comp is required in most states once you hire employees. Rates vary significantly by state and industry. See our insurance cost guide. - Marketing & Signage ($200 - $25,000)
Website, business cards, signage, grand opening marketing. Restaurant exterior signage alone can cost $2,000-$10,000. - Technology ($0 - $15,000)
POS systems, booking software, accounting tools. Many free or low-cost options exist for solo operators. Restaurant POS systems with hardware run $1,500-$5,000. - Working Capital ($500 - $150,000)
The cash reserve to cover 3 months of operating expenses before revenue stabilizes. This is the most commonly underestimated category and the number one reason new businesses fail in the first year.
How Location Affects Your Costs
The same business can cost 50-100% more in high-cost states like California, New York, and Hawaii compared to low-cost states like Mississippi, West Virginia, and Arkansas. Key factors that vary by state:
- LLC filing fees: $35 (Montana) to $500 (Massachusetts)
- Commercial rent: $11/sqft/yr (West Virginia) to $36/sqft/yr (California)
- Workers comp rates: $0.68/$100 payroll (Virginia) to $2.15/$100 (Alaska)
- Permit complexity: California and New York have the most expensive and complex permit requirements
Browse all 50 states + DC to see the full picture for your location.
Tips for Reducing Startup Costs
- Start lean. Choose a low-barrier business (cleaning, landscaping) if capital is limited. You can always expand later.
- Buy used equipment. Restaurant and salon equipment holds up well. Buying used saves 40-60% compared to new.
- Form your own LLC. DIY filing costs only the state fee ($35-$500). Formation services add $100-$400 but save time.
- Start from home. If your business type allows it, skip commercial rent entirely in the early stages.
- Get multiple insurance quotes. Rates vary 30-50% between insurers for the same coverage. Compare at least 3 quotes.
- Negotiate your lease. Landlords often offer free rent months, buildout allowances, or reduced rates for longer lease terms.
- Bootstrap your marketing. Google Business Profile is free and drives significant local traffic. Focus on word-of-mouth and referrals before paid ads.
Explore by Business Type
Our Methodology
Sourced from LLC University (llcuniversity.com) cross-referenced with llc.org and Chamber of Commerce. Represents the base Articles of Organization / Certificate of Formation filing fee with the state Secretary of State. Does not include name reservation, expedited processing, or annual report fees.
Compiled from SBA.gov guides, Toast POS state guides, trade associations, and state agency websites. Ranges reflect variation between cities within each state.
National averages from industry sources (Toast, Square, Shopify, trade publications). Ranges reflect low (basic/used), mid (standard new), and high (premium) setups.
General liability from MoneyGeek 2026 report, workers comp from Insureon/SimplyInsurance 2025 data. State multipliers derived from published rate indices.
Based on offices.net 2024 commercial property data, BLS regional data, and LoopNet market reports. Represents retail/commercial space $/sqft/year.
Data last updated: 2026-03-26. Sources include LLC University, SBA.gov, MoneyGeek, Insureon, offices.net, and industry trade publications.