startup costs

Hidden Startup Costs Entrepreneurs Should Know About

While it’s ideal to start a business with extra financial cushion, this isn’t always realistic. There will always be certain expenses you’re prepared to anticipate, like filing taxes and incorporating or forming an LLC, but others might creep up and surprise you.

Wait, you have to pay a fee just for filing an application? Permits for operating the business cost how much?

Prior to starting your business, it’s important to be aware of the unexpected startup costs before they sneak up on you. Let’s take a look at some of the most common expenses.

Filing fees

Filing fees are everywhere. These go well beyond state fees associated with filing to incorporate a business. If you’re filling out an application to register a trademark, you’ll need to pay a filing fee. There are also fees associated with filing annual reports (which may differ depending on your entity formation) and small business loan applications.

The good news is that filing fees are generally not too expensive. However, the price tag does vary from state to state. For example, let’s say a small business owner uses their annual report filing to change their registered agent in the state of New Jersey. They would pay a fee of $25 for the changes plus the annual report fee. Check with the state you are doing business out of to find out how much they charge for their filing fees.

Similarly, if you’re filing to register a trademark, determine what the filing basis is for your application. The USPTO states that use in commerce and intent to use are the two most commonly used filing bases. Figure out the category your mark falls under to file the right application and pay the associated fee.



Business licenses and permits

The number and type of business licenses and permits your startup requires will depend on several factors. Some of these include location, entity type and industry.

Businesses in certain industries will need industry-specific licenses. A food truck, for example, requires a business license, health permit and mobile food facility permit, among other permits and certifications. Many of these licenses would not be applicable to a business in a different industry, like an e-commerce jewelry startup, for example.

Not sure which licenses and permits you need or how to obtain them? Reach out to your local Chamber of Commerce or the U.S. Small Business Administration (SBA) to see what’s required in your industry and specific location. Once you file for and are approved for these licenses, you’ll also need to renew them on a regular basis. If you don’t renew the permits, you won’t be able to operate the business.


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Entrepreneurs wear a lot of hats when they first start their businesses. Certain hats, like accounting and legal, may be passed off to professionals in order to avoid making mistakes. This is fine to do, so long as you have the funds to pay them for their help.

The reason why I included this as a hidden startup cost is that fees for attorneys and bookkeepers add up. Unlike application filing fees or business license renewals, these are not inexpensive costs.

It’s necessary to have enough capital available as a buffer for a worst case scenario in which you might need their services. While it might be financially unpleasant, it would be far worse for your startup to be served a lawsuit and not have a lawyer to assist in settling it.

While you can’t be prepared for every unexpected cost that will pop up, being aware of some of the hidden costs of starting a business will help you succeed as an entrepreneur.

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