Business Startup Cost Calculator — United Kingdom 2026-27
What starting the business actually needs in the bank: one-time setup, the runway to carry monthly costs until it turns a profit, a safety buffer, and a contingency on top — with the split across setup, stock, equipment, fit-out and launch marketing.
Total capital is one-time costs plus runway plus buffer, then a contingency percentage on that subtotal.
| One-time | £15,000.00 |
|---|---|
| Runway | £96,000.00 |
| Buffer | £24,000.00 |
| Contingency | £13,500.00 |
| General setup | £15,000.00 |
|---|
How the startup costs works
Total capital is one-time costs plus runway plus buffer, then a contingency percentage on that subtotal. Runway is monthly operating costs times the months you expect to take to reach profitability — the number most first-time owners get wrong, because it is the money that keeps the doors open while revenue is still building, not the money that opens them. The buffer is extra months of the same costs held back for the thing you have not thought of; three months is the usual minimum. The contingency covers cost overruns on the one-time items, where 10% is optimistic and 20% is realistic for anything involving a fit-out. On registration: incorporating at Companies House costs £50 online, VAT registration is compulsory once taxable turnover passes £90,000 in any rolling twelve months, employers' liability insurance is a legal requirement from the first employee, and a business rates bill on commercial premises is one of the fixed costs most plans forget until it arrives.
Formula: Capital = one-time + (monthly × months to profit) + (monthly × buffer months), then × (1 + contingency)
Where these figures come from
Business figures on this page are drawn from HM Revenue & Customs (corporation tax, VAT, PAYE), Companies House (company registrations), and GOV.UK (statutory employer and business obligations).
- Corporation Tax rates — GOV.UK — Corporation Tax rates and reliefs.
- VAT rates (standard 20%) — GOV.UK — VAT rates.
- PAYE & employer obligations — GOV.UK — PAYE and payroll for employers.
- Company registration & filing — Companies House — GOV.UK.
- Business rates — GOV.UK — Business rates.
Last checked: April 2026. Rates and thresholds are reviewed against the source of record each November, when annual adjustments for the following tax year are published.
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Online service business — £15k setup, £5k/month, 9 months to profit £75,000 total capital needed
An online service business (consulting, freelancing, digital agency) with £15,000 one-time setup and £5,000/month operating costs, targeting profitability in 9 months: Setup £15k + 9-month runway £45k + 3-month buffer £15k = £75,000. This is a mid-range estimate for a home-based professional service.
| One-time setup | £15,000 |
|---|---|
| Monthly operating costs | £5,000/month |
| 9-month runway | £45,000 |
| 3-month safety buffer | £15,000 |
| Total capital needed | £75,000 |
| Typical funding source | Personal savings + business loan |
- Self Assessment / UTR Free — register as self-employed at gov.uk
- Trading name No registration needed for a sole trader
- VAT registration needed Once turnover exceeds £90k/year
- Professional indemnity insurance £500–£2,000/year depending on field
- Home-office costs £10–£26/month flat rate or actual costs
Retail shop — £80k setup, £20k/month, 18 months to profit £550,000 total capital needed
A bricks-and-mortar retail store with £80,000 setup (fit-out, equipment) and £20,000/month operating costs (rent, wages, stock), targeting profitability at 18 months: Setup £80k + inventory £50k + runway £360k + buffer £60k = £550,000.
| One-time setup (fit-out etc.) | £80,000 |
|---|---|
| Initial inventory | £50,000 |
| Monthly costs | £20,000/month (rent + wages + COGS) |
| 18-month runway | £360,000 |
| 3-month buffer | £60,000 |
| Total capital | £550,000 |
- Retail lease (typical term) 3–10 years, often with a break clause
- Rent-free / fit-out contribution Sometimes negotiable — ask
- Planning permission Change of use may need council consent
- Employers' liability insurance Legally required once you hire staff (£5m cover)
- Retail failure rate ~40% of retail startups close in 3 years
Startup costs by business type — the United Kingdom £2k–£500k+ depending on type
Startup costs vary enormously by business type. The key variables are: whether you need physical premises, staff, and stock. Online and home-based businesses have the lowest barriers. Bricks-and-mortar businesses require the most capital.
| Online/digital business | £2,000–£15,000 |
|---|---|
| Home-based service (trade, consult) | £5,000–£30,000 |
| Office-based service | £20,000–£80,000 |
| Retail shop | £50,000–£250,000 |
| Cafe or restaurant | £100,000–£400,000 |
| Manufacturing / food production | £150,000–£1,000,000+ |
- Franchise £20,000–£500,000+ (franchise fee + setup)
- Online marketplace seller £500–£5,000 to start
- Mobile services (cleaners, trades) £5,000–£30,000 (vehicle, equipment)
- Nursery / childcare setting £500,000–£1,500,000+ (Ofsted-registered)
- Best resource gov.uk — Set up a business
How to fund your UK startup Savings, loans, grants, investors
Most UK small business startups are funded from personal savings (bootstrapping) — this is the most common and simplest approach. External funding (loans, investors, grants) becomes more relevant for larger startups or those with high growth ambitions.
| Personal savings (bootstrapping) | Most common — no debt, no dilution |
|---|---|
| Business bank loan | Secured: 7–11% · Unsecured: 12–25%+ |
| Family and friends | Common — but document everything |
| Government grants | gov.uk Find a grant + local growth hubs |
| Angel investors (SEIS/EIS) | Equity for capital — give up ownership |
| Accelerators (Techstars, Seedcamp) | Equity + mentoring + small capital |
- Start Up Loan (British Business Bank) £500–£25,000 at 7.5% fixed + mentoring
- R&D tax relief (merged scheme) 20% expenditure credit on eligible R&D
- Growth Guarantee Scheme Government-backed lending via accredited lenders
- Equity crowdfunding Via FCA-authorised platforms (Crowdcube, Seedrs)
- Revenue-based finance Repay as % of monthly revenue
Worked examples
| Inputs | Total Capital Needed | Note |
|---|---|---|
| 15,000 setup, 8,000 a month, twelve months to profit | £148,500 | 148,500 all in |
| Six months to profit instead of twelve | £95,700 | reaching profit sooner takes 52,800 less capital |
| A fitout and stock on top | £258,000 | the one-time half now dominates |
The sources behind this calculator
- Corporate Finance Institute — EBITDA — why EBITDA is a non-GAAP measure with no single definition
- US SEC — Non-GAAP Financial Measures, Compliance & Disclosure Interpretations — the disclosure rules that exist precisely because EBITDA is not standardised
- Financial Reporting Council — the UK accounting and audit regulator
Last checked: September 2026. These are standard management-accounting definitions; where a term has no single agreed definition, the page says so.