How much does it actually cost to start a business?
If you’re thinking of starting a new business or are already planning your next start-up, it’s important to be aware of all the start-up costs involved. We take a closer look at the real costs of starting a business:
1. Registration fees
The first step towards becoming a full‐fledged, operational business in Singapore is to get your business registered with the Accounting and Corporate Regulatory Authority (ACRA) At this point, you’ll have to pay a name approval fee of $15 and a registration fee of $300.
Subtotal: $315, one‐off
2. Banking‐related costs
Before setting up all your company’s payment systems, you’ll first need to open one or several business bank accounts. Depending on your company’s needs, you will either need to open a business digital account or a multi‐currency account, which allows you to carry out transactions in different currencies. Here are the two main account types DBS has to offer:
If you expect to be doing a significant amount of overseas business, it might be worth thinking about setting up a multi‐currency account. A DBS multi‐currency account requires you to maintain a $10,000 minimum balance, make an initial deposit of $3,000 and pay a recurring fee of $40 a month to keep your account open.
Subtotal: $1,216 ‐ $10,480 a year
3. Office set‐up costs
If a remote office set up isn’t an option, a low‐cost option could be renting a co‐working space. Expect to pay between $250 and $750 for a hot desk, and between $350 and $2,500 for a dedicated working space. In general, the further away you are from the Central Business District (CBD), the less you can expect to pay for a workspace. A key advantage of choosing a co‐working space is saving on what you otherwise might need to spend on office equipment and utility bills.
Subtotal: $3,000 ‐ $30,000 a year
4. Website and marketing costs
If you’re planning to build an e‐commerce website, you might need to consider hiring a web developer. Rates vary but typically range anywhere from $2,000 to $5,000, depending on how sophisticated your website is. It’s also worth looking into advertising your products or services on various social media platforms if your budget allows for it. Be sure to budget for website maintenance fees as well – these typically range between $350 and $800 a month, but are essential to ensure your website remains secure, updated, error‐free and easy to use.
Subtotal: $2,000 ‐ $5,000 one‐off; additional $4,200 ‐ $9,600 a year
5. Opportunity costs
If you’re just beginning your journey as an entrepreneur, you might still be working a day job or mulling whether you should give up your job for your new venture. Before you go all‐in, it’s worth thinking about the income you will be foregoing by becoming a full‐time entrepreneur. The initial costs of starting a new business might require you to hold on to your day job just until your start‐up gets up and running.