Startup cost: realistic budgets and what to expect

Running out of cash kills more startups than bad ideas. Knowing the real startup cost up front helps you plan, raise the right money, and avoid surprises. Below I break down the main expense buckets, give ballpark budgets by business type, and share practical ways to cut costs and secure funding.

Where the money goes

Think in these clear categories: company setup (registration, licenses), product or service development (MVP, prototypes), equipment and tools, rent and utilities, salaries or contractor fees, marketing and sales, legal and accounting, and working capital (inventory, supplies, operating cash). Estimate each line separately — that’s how you build a realistic budget.

Typical one-time costs: registration and basic legal work (₹5,000–₹50,000), website and hosting (₹10,000–₹100,000), basic equipment like laptops (₹30,000–₹200,000 total), initial inventory or prototype (highly variable). Monthly recurring costs: rent (₹5,000–₹200,000), payroll (₹20,000 per junior hire), software subscriptions (₹1,000–₹20,000).

Ballpark budgets by business type

If you want quick reference, here are rough ranges for India. Service freelancer or microbusiness: ₹50,000–₹300,000 to start. Small online store (drop-ship or small inventory): ₹200,000–₹1,000,000. Tech startup building an MVP: ₹1,000,000–₹5,000,000. Manufacturing or hardware: ₹5,000,000 and up depending on machinery. These are ranges, not rules — costs depend on scope and location.

Two practical rules: (1) Build a minimum viable version that proves customers pay before you spend big on features or inventory. (2) Plan runway for 6–12 months of operating expenses after launch — that’s the buffer to find product-market fit.

Want to cut costs? Work remotely to avoid early rent. Use freelancers and contract developers instead of full-time hires. Choose cloud services and open-source tools. Pre-sell or run small pilot batches to fund production. Negotiate payment terms with suppliers to reduce upfront cash needs.

Funding options: bootstrap if you can keep burn low. Friends and family rounds work for very early needs. Look into angel investors for product-led startups, bank loans or government schemes (like MSME or Startup India programs) for capital-light businesses, and crowdfunding for consumer products. Match the amount you raise to a clear next milestone so you don’t dilute too early.

Before you raise or spend, make a simple one-page budget with line items, monthly burn, and runway. Update it weekly for the first six months. When you pitch, investors ask two things: how long will the money last, and what measurable step will it buy you? Answer both with numbers.

Start small, measure fast, and spend on things that directly find customers. A realistic startup cost plan gives you control — and more chances to survive the first critical year.