Startup costs come in two piles, and mixing them up is how new businesses run out of money. The first is the one-off spend to get going — kit, a vehicle, registration, first stock. The second is the costs that arrive every month once you are trading, whether or not you sell anything. Then there is a third number most people never work out: the money you need to live on before customers actually pay you.
At a glance
| Feature | Detail |
|---|---|
| The two piles | One-off costs to get going, and the monthly costs once you are running |
| Most forgotten one-off | Professional fees, deposits and the first insurance payment |
| Most forgotten monthly | Card fees, subscriptions and tools that wear out |
| The vehicle | A whole category of costs, not one line |
| Your own wages | A real cost, even in the months you do not take any |
| The third number | Working capital — money to survive until customers pay |
One-off costs to get going
These happen once, mostly before you earn anything. Write down every item with a real price next to it, not a guess.
Registering the business. Sole trader with HMRC is free; a limited company costs £100 to register online at Companies House. Our guide to starting a business covers which suits you.
Equipment and tools. Buy the ones you use daily properly and hire or borrow the rest until the work justifies them.
A vehicle. Bought outright, or a deposit followed by monthly payments. If you finance it, the deposit is the one-off cost and the payment belongs in the monthly pile.
Your first stock, on the shelf or in the van before the first customer arrives.
A website and a domain. The domain is a few pounds a year; the website is anything from an evening on a template to a proper build. Add branding — a logo, colours and typefaces, plus signage, workwear and printed cards if your trade needs them.
Professional fees. An accountant to set you up, someone to write your terms of business, a trade body fee. Small individually, and usually missing from the list entirely.
Deposits on premises, a vehicle or a supplier account. Training and certification — any card or ticket you need before you can charge. And insurance: the first payment lands before you start work, not after, and our insurance guide covers what a small business needs.
The costs that arrive every month
This is the pile people underestimate, because each line looks small on its own.
Insurance, spread monthly or paid annually. Software subscriptions — accounting, job management, storage, email, design tools, the booking system. They creep, so review them every six months.
Card fees. Every card payment costs a percentage and sometimes a few pence. If most customers pay by card this is a real monthly line, not a rounding error.
Website hosting and domain renewal. Your phone. An accountant. Bank charges, if your account has them. Stock replenishment, if you sell things. Premises, if you have them: rent, utilities, business rates.
Marketing. A number you choose deliberately, every month. A plan with nothing on this line is quietly claiming customers will appear on their own.
Tools and kit that wear out. Blades, brushes, bits, filters, consumables, and the tool itself when it dies. Put an amount aside monthly rather than being surprised.
The vehicle, which is seven costs and not one. Fuel, insurance, servicing, tyres, road tax, breakdown cover, and the finance or lease payment if you did not buy it outright. A high-mileage trade wears a vehicle out fast, so servicing and tyres come round sooner than on a family car. Leaving half of these out is the commonest reason a cost list is wrong.
Paying yourself is a cost
If you plan to take nothing for the first six months, that is a decision, but it is not free. You still have to eat, and the money comes from savings, a partner's income or a loan.
So put your own wages on the list at the amount you need to live on. If the business cannot cover it yet, you know exactly how big the gap is and how long you have to cover it.
Working capital: the money before the money
Working capital is a plain idea with an unhelpful name. It is the money you need to survive the gap between spending and getting paid.
You buy materials on Monday. You do the job on Wednesday. You invoice on Thursday, and the customer pays 30 days later. For those 30 days you have paid out and taken nothing in, while the fuel, insurance and your mortgage carried on regardless.
Work yours out like this. How many weeks pass between spending money on a job and the payment landing? Multiply that by everything going out each week, including what you take for yourself. That is roughly what you need behind you before you start, on top of the one-off list.
What it looks like for a real business
Take Jamie, a one-man 24/7 plumbing business in Reading. He charges £70 an hour and bills around 25 chargeable hours a week — hours he gets paid for, not hours worked, because quoting, driving and admin take a chunk of every week. Roughly £7,000 a month of sales.
Jamie's one-off pile. A used van at £8,000. Tools and van racking, £3,000. Sign-writing and workwear, £700. A simple website and domain, £400. First stock of fittings in the van, £600. Accountant setup and written terms of business, £400. Plus Gas Safe registration and the first insurance payment. Call it £13,000 before a customer has phoned.
Jamie's monthly pile. Fuel £260. Van insurance £75. Servicing, tyres, road tax and breakdown cover, averaged out, £85. Public liability and tools insurance £30. Phone £25. Accounting software and a job app £45. Hosting and domain £15. Accountant £70. Replacement consumables and worn-out tools £60. Marketing £150. Card fees £40. Roughly £855 a month before he pays himself a penny.
Now the sense-check. £7,000 of sales, less £855 of running costs, leaves about £6,145 — and that is where his own wages, his tax and his National Insurance come from. He needs £3,000 a month to live on, so the business clears it with room. Sales at that level also put him past the £90,000 VAT registration threshold inside his first year, which our VAT guide explains.
And his working capital. Domestic customers pay on the day, but his commercial work is on 30-day terms while he buys materials on a 7-day merchant account, so on those jobs he is out of pocket for three weeks. With £855 of costs and £3,000 of his own money going out each month, he wants a few thousand pounds behind him before he starts.
Two lists and a gap is all it is, and the arithmetic is quick once you have them. Create a mini business plan in minutes with Plan.business. Put in your rate, your hours and your costs, and it works out the rest — what you will make, when you break even, and what you need to charge to hit your target.
The mistakes that make a cost list wrong
Counting the van and forgetting the fuel. The purchase is the loud number. The running costs decide the month.
Pricing the kit and not the time. If it takes two months to get going, two months of living costs belong in the plan.
Leaving out the small subscriptions. Six things at £15 a month is £1,080 a year.
Treating a loan as income. Borrowed money is repaid out of profit, and the repayment is a monthly cost from day one. Our funding guide covers the UK options.
Figures correct as of September 2026. Tax thresholds, fees and rates change; check the linked GOV.UK pages before acting. Prices and costs shown are indicative and vary by area and by what's included.
What is Plan?
Plan is a free business operating system for people starting or newly running a UK business. It walks you, one simple step at a time, from your elevator pitch through brand, product and pricing, to a complete business plan — then uses everything it now knows about the business to help with the basics: logo and brand, marketing, a website, a bank account, funding, insurance, company registration. You can use as much or as little as you want.
You never fill in a spreadsheet. You answer short questions about what you are buying and what you will spend each month, and Plan does the arithmetic and reads the total back to you in plain English.
Frequently asked questions
How much does it cost to start a small business in the UK? It depends on the trade. A service run from home can start for a few hundred pounds — insurance, a website and basic kit. A van-based trade is usually several thousand once the vehicle and tools are in. The honest answer comes from your own two lists, not an average.
What is the difference between startup costs and running costs? Startup costs happen once, around the moment you begin: kit, a vehicle, registration, first stock. Running costs arrive every month once you are trading: insurance, fuel, software, marketing, your own wages. Keep them in separate lists, because they answer different questions.
What is working capital in simple terms? The money you need to survive the gap between paying out and getting paid. You buy materials, do the job, invoice, then wait. Work it out by multiplying your weekly outgoings by the number of weeks you wait for payment.
Should I include my own wages in startup costs? Yes. Put in the amount you need to live on, even if you intend to take nothing at first. If the business cannot cover it early on, you want to know the size of that gap before you start.
What startup costs do people most often forget? Insurance, professional fees, card fees, subscriptions, tools that wear out, and the full running cost of a vehicle: fuel, insurance, servicing, tyres, road tax, breakdown cover and the finance payment. Paying themselves comes a close second.
Two ways to do this
Do it by hand. Two columns on paper: one-off on the left, monthly on the right, working capital underneath. An hour of honest answers gets you a list you can trust.
Or let Plan do the arithmetic. Start free in Plan. It runs in your browser — nothing to download. Answer short questions about what you need to buy and spend, and Plan builds the numbers into your plan and exports the whole thing as a spreadsheet for your accountant or a lender. Do just this bit and stop there if that is all you need.