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Melissa Wylie is a former small business writer. In her role, Melissa explored all aspects of business ownership.
How Much Does It Take To Start A Restaurant
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When opening a business, it will be beneficial to have an idea of ​​what start-up costs to expect, whether you are familiar with the industry or a newcomer.
Using data from the Census Bureau, the researchers estimated the average start-up costs for businesses in a variety of industries. Most business owners (21%) start their venture with less than $5,000. But startup costs can exceed $3 million, depending on the industry and other startup factors.
Our results include both average and median costs to start a business. Since the average accounts for businesses whose expenses are in the millions, it is often much higher. Average cost represents the midpoint – 50% of businesses cost less and 50% of businesses cost more – and is usually lower than the average.
Corporate and corporate management is the most expensive industry to start in. Examples of on-site companies are those that either own securities or interests in another company, or oversee and manage planning and decision-making within another business. According to our estimates, the average business in this industry needs about $440,740 in start-up funds, while the average needs $191,762.
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Utilities takes second place. Many firms do not report data—only 1,097 utility firms were included in Census Bureau data. Together, they used $284 million in funding, which is $265,676 per company. But the average services firm needed $88,333 to start.
Food and lodging firms had the third highest average start-up costs. This industry includes mom-and-pop restaurants, as well as casinos and hotels, which raise the average. In this industry, the average new firm costs a quarter of a million dollars to start. About two-thirds of businesses in this sector needed more than $50,000 in start-up funding, while the average company needed $93,621.
Construction is the least expensive industry to enter. The average new firm needed just $67,349 to start, while 50% of firms started with less than $12,390. It was also one of the largest industries surveyed with approximately 300,000 firms reporting.
Average costs are also low for administrative and support services and waste management and remediation services. Employment agencies, guardianship services, waste collection and travel agencies are all examples of companies that fall into this category. To start a business here, the average entrepreneur needs $69,509. Many start with less, as the average company in this industry has $12,549 in capital.
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If it still seems expensive to start your own business in one of these industries, there are still options if you can only afford a business loan of up to $10,000. 000 in initial funding. It may be even less to start an administrative and support, waste management or remediation business: about 31% of these companies started with less than $5,000.
However, $10,000 may not be enough to get you into the restaurant business. Less than 10% of lodging and food service businesses started with less than $10,000. Also, less than a quarter of health care and social assistance companies started with less than $10,000 in capital.
Among the 4,651 firms that reported costs, the average capital required to start a business in this industry is $440,740. The total spent on launching all communications companies exceeded $2.05 billion.
Industrial workers in this sector include accountants, bookkeepers, financial managers, office managers and general managers. They may handle financial planning or other administrative tasks for companies that prefer a third party versus in-house management.
How Much Does It Cost To Start A Restaurant [infographic] I Osp
Startup costs may include office space, purchased or leased, accounting or bookkeeping software, liability insurance, marketing, business licenses and various office equipment. You can start a management business for less than average. The average starting price is $191,762, although that is the highest average price in our study.
On average, it costs $265,676 to open a service business, which ranked the industry No. 1 in our survey. 2 wins. However, industry had the lowest response rate with 1,069 companies reporting costs. The total amount spent by all communications utility companies to launch was more than $284 million.
Electric utilities, natural gas, steam supply, water supply and sewer removal are categorized in the utilities industry. These businesses rely on skilled professionals and workers, as well as expensive machinery. Business owners may need to purchase land as well to access resources such as oil and natural gas. Even with the low number of respondents, the service industry had the third highest average startup cost in our study at $88,333.
The No. 3 occupation is just below the utilities with an average starting cost of $252,713. The number of respondents totaled 221,867 firms, and those businesses used a total of more than $56 billion in initial capital.
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As mentioned earlier, this sector includes hotels and restaurants and smaller businesses, such as fast-food restaurants. Luxury establishments dwarf the average cost, but the average cost to start a business in the housing and food services industry is still our second highest at $93,621.
The location itself is often the main cost driver in this industry. In addition to space, decor, and interior and exterior fixtures, restaurant owners also spend money on marketing, inventory, and staff. Additional costs for hoteliers can include recreational facilities and food and beverage options.
These industries have the lowest startup costs, as well as average costs near the bottom of our list.
The construction industry has the lowest start-up costs in our study at $67,349. And although 300, 176 firms reported spending, their combined initial spending just broke $20.2 billion. The average cost is $12,390, which is in our second-to-last place.
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Startup costs for construction businesses can include raw materials needed for projects, tools and equipment, labor, insurance, permits and licenses. Costs may be somewhat controlled, as the size of the project and the needs of the company will affect the overall costs.
Starting a business in this industry is a bit more expensive than starting a construction business. The average amount of money needed to start a company is $69,509. Total startup spending for 157,657 respondents is $10.9 billion. The average amount of capital required was among the lowest at $12,549.
This category includes janitorial, landscaping, security and landscaping services. These businesses have minimal startup requirements. The start-up costs for a cleaning service, for example, usually only cover expenses and labor costs.
The average salary for starting a professional, scientific and technical services firm is $72,046. The median is the lowest in our survey, at $9,952.
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This sector usually includes accountants, auditors, architects, lawyers and analysts. Office space may be the biggest upfront cost. For example, lawyers should expect to spend most of their startup money on office furniture and supplies, as well as professional licenses and insurance. Devices such as computers, printers, phones, document scanners and software can also be added.
To estimate average startup costs, the researchers used survey data from the US Census Bureau. The researchers found the total amount of capital used to start or acquire a business and divided that amount by the total number of firms that reported financial estimates. Those financial estimates were presented in rows. To make our estimates, we assumed that entrepreneurs use the average of the series to finance their business.
For example, 295,500 firms reported using between $5,000 and $9,999 to start their business. To estimate total capital employed, we assumed that the average firm in that range employed $7,500, which is halfway between $5,000 and $9,999. Companies that reported expenses of $3 million
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