Starting a business can cost far less than you might think. Our guide to essential start-up costs will help you get your business idea of the ground without breaking the bank.
It’s far more affordable to set up a business than most people realise, according to results of a 2024 survey conducted by American Express and The Entrepreneurs Network. The poll of over 1,500 adults and 250 UK business owners shows that, on average, Brits estimate that it costs £34,000 to start a business when the reality is around £5,000.
Of course, that’s a just an average. While some businesses need premises, staff and stock to get off the ground, there are many businesses that can be launched for a few hundred pounds, especially if you’re a sole trader working from home. You can get some great ideas for how to start a business on a shoestring budget on our podcast.
Read on to find out more about the average costs of essential business services and discover cheap and free services that can keep your start-up costs to the bare minimum.
How much does it cost to register a business in the UK?
Registering a business is quick and easy. You can register a limited company with Companies House, either online, by post or using an agent. The cost depends on how you register, what you are registering and how quickly you need the registration to take affect. Online registration takes 24 hours while paper registration takes up to ten days. You can register for corporation tax and PAYE at the same time. There’s no need to register your business with Companies House if you’re self-employed but you will have to register with HMRC; all you need is your National Insurance number.
Cost of registering a business: Variable; free for sole traders.
How much does it cost to buy a website domain name?
Once you've decided on a business name for your start-up, you'll need a domain name for a website. It’s easy to buy a domain name online using a service like GoDaddy, Names.co.uk or 123-Reg. You can search for the name you’d like and find out if it’s available. You will have to pay a yearly fee for a domain name. Most website builders, such as Wix and SquareSpace, offer domain name registration as part of a package.
Average domain name cost: £10-£20 a year
How much does it cost to build a simple website?
The cost of a website includes design, hosting costs and domain name fees. Most website builders charge a single monthly fee that covers all these elements. The leading website builders are: Wix (from £7.50 per month); Ionos (£10-£53 per month), GoDaddy (from £6.50 for a basic site); SquareSpace (from £17 per month); WordPress (£3 - £36 per month). Most providers also offer ecommerce functionality for a higher fee. Shopify and BigCommerce are leading ecommerce website builders.
Average cost of a simple website: £7 - £17 per month.
How much does it cost to get a business email address?
Having a professional business email address using a name@yourbusiness format inspires trust and helps to market your brand name. Domain name providers and website builders typically offer business email addresses that are free or low cost as part of a package. Another option is to sign up for Google Workspace and you can get a name@yourcompany email with the familiarity and security of Gmail for £5 a month along with other Google business services including Chat team messaging, Meet video conferencing and Slides.
Average business email cost: Free or up to £5 a month.
How much does a business bank account cost?
Many UK banks offer free business banking - online bank Starling consistently wins awards for its customer service; Tide offers free extras to start-ups including company incorporation; Anna Money has a free business bank account for small start-ups and takes a mobile-first approach. Many high street banks, including Barclays, HSBC and Lloyds, offer free business banking in the first year but charge thereafter (typically a monthly fee of £6.50-£8.50). NatWest offers free banking for two years for start-ups and switchers. High street banks often provide free accounting software which can represent a good deal.
Average banking costs: Free or around £7 a month.
How much does a card payment system cost?
Point-of-sale card readers allow you to take payments in person and over the phone. You’ll need to choose a payment system that meets your needs, whether you sell online through an ecommerce website, via social media or face-to-face. Costs can include a monthly fee as well as a percentage of each transaction. Two popular card readers for small businesses are SumUp and Square because they don’t have contracts or monthly fees. Square charges from 1.75% per transaction and SumUp charges 1.69%. Shopify is a great option for ecommerce businesses, costing from £25 per month. Lightspeed is a good solution for hospitality businesses and costs from £59 per month plus fees.
Average card reader costs: From free to around £50 per month; transaction fees are around 1.7%.
How much does an accounting app cost?
Accounting software is a essential for many businesses. Most finance apps charge a monthly fee. QuickBooks is a good all-rounder (£10 per month for sole traders, £24 for small businesses); Xero is a popular app for start-ups (from £15 per month); FreshBooks is good for freelancers (from £12 per month); Sage offers accounting software for businesses of all sizes (£14-£36 per month); Crunch provides both software and accounting support for small businesses (£25.50 per month for sole traders); Tide offers bookkeeping software linked to a bank account (£9.99 per month); FreeAgent costs £19 per month (sole trader) or £29 per month (limited company).
Average cost of accounting software: From £10-£30 per month.
How much does a social media management app cost?
The cost of social media apps varies widely. These apps come into their own when you want to plan, schedule and monitor all your social media activity from one place. Some apps have free versions including: TweetDeck, Buffer and Planable (free for up to 50 posts). Paid-for versions typically provide more functionality, such as Zoho Social (£8 per month for a single user with up to nine social media channels), Later (from £18 per month), Hootsuite (£89 per month for one user with up to ten social media accounts) and Iconosquare (€49 a month for two team members with up to three social profiles).
Social media management app costs: Free or around £10-20 per month.
How much is CRM software?
CRM software allows you to keep detailed customer records and make more sales. Most providers offer free trials so you can test-drive them. Some have free versions, including: HubSpot, Bigin from Zoho and Capsule. Paid-for apps include monday.com (from £10 per user per month) and FreshSales (from £12 per month). SalesForce is one of the leading CRM providers (from £20 per user per month). Pipedrive is good for sales (from £14.90 per month). Zendesk is good for customer service (from £15 per user per month).
Average CRM costs: Free or around £15 per month.
How much does a project management app cost?
Not every business needs project management software but these apps are useful when you need to plan projects involving several people. Two of the leading project management apps are monday.com (starting at £8 per month) and Wrike (£9.80 per month).
Average project management app costs : Under £10 per month.
How much does business insurance cost?
Business insurance comes in many forms and premiums vary widely depending on the nature of your business. You can insure your premises, equipment and vehicles and you can get health insurance for yourself and your employees. There are also insurance policies to protect the business in case it causes harm. These include product liability insurance, professional indemnity insurance, employee insurance and public liability insurance. Leading business insurance providers include: Simply Business, AXA, Hiscox, PolicyBee and Vitality.
Business insurance costs: From £100 per year.
