1. Business Registration and Legal Costs
Registering a business in the UK is affordable, but essential. Costs vary by structure:
- Sole trader: Free to register with HMRC
- Limited company: £12 online via Companies House
- Legal advice: £200–£500 for contracts, T&Cs, and trademarks
Also consider licenses, insurance, and intellectual property if applicable.
2. Business Premises or Rent
Your startup location heavily influences your costs:
- Home-based: Minimal extra cost
- Co-working space: £100–£400/month
- Retail unit or office: £500–£2,500+/month depending on location
Additional costs include deposits, business rates, and utilities.
3. Equipment, Tools, and Technology
Every business needs some form of equipment—hardware, software, or machinery:
- Laptops and tech: £500–£1,500
- POS systems: £300–£800
- Sector-specific tools: varies widely (e.g., £3,000+ for kitchen equipment)
Also budget for software subscriptions like QuickBooks, Canva, or Microsoft 365.
4. Branding, Website, and Marketing
Initial marketing costs depend on how much DIY vs. outsourcing you do:
- Logo and branding: £100–£1,000
- Website design and hosting: £200–£2,000+
- Marketing budget: £100–£1,500/month (ads, social media, SEO)
Early visibility is vital, especially for ecommerce and service-based startups.
5. Stock and Inventory (If Applicable)
If you’re selling products, stock is a major upfront cost:
- Small batch startup: £500–£5,000
- Larger ecommerce inventory: £5,000–£20,000
- Wholesale/distribution: can exceed £50,000
Also factor in warehousing or storage costs if needed.
6. Staff and Hiring Expenses
If you plan to hire early, consider:
- Wages: Minimum wage or higher
- National Insurance and pensions
- Recruitment and onboarding: £100–£1,000
- Training and uniforms
You may also need payroll software or outsourced accounting.
7. Working Capital and Emergency Funds
Budget for at least 3–6 months of operating expenses to cover:
- Rent
- Utilities
- Inventory
- Marketing
- Salaries
Typical startup working capital: £3,000–£30,000, depending on your business model and risk appetite.
Frequently Asked Questions
How much is it to start a business on average in the UK?
On average, most UK startups spend £5,000–£20,000 to get started. This can be lower for service-based or online businesses.
What’s the cheapest way to start a business?
Starting as a sole trader with an online model (like freelancing or dropshipping) can cost as little as £100–£1,000.
Can I start a business with no money?
Yes, but you’ll need to offer a skill-based service (like consulting or digital work), and rely heavily on free tools and organic marketing.
Are startup costs tax deductible?
Yes. Many startup costs like equipment, software, and marketing are allowable business expenses.
How do I fund my startup costs?
You can use personal savings, start up loans, grants, or crowdfunding to finance initial expenses.
Is a business plan necessary before spending money?
Absolutely. A clear plan helps avoid overspending, secures funding, and guides early decisions.
Conclusion
So, how much is it to start a business in the UK? The answer depends on your model, industry, and growth plans—but planning for at least a few thousand pounds is smart. With good budgeting, a realistic strategy, and the right funding, you can launch confidently and control your financial risk.