How Much Does It Cost To Run A Business?

Whether you’re planning to launch a business or are already up and running, dealing with expenses can be a source of stress, surprise, and consternation. 

Most business owners dread discussing money because they consider it to be “hanging our dirty laundry,” but I believe it is such an important element of doing business that we can’t avoid it.

In this article, I’ll discuss initial costs to consider, how much it costs to run my business and how those costs are allocated.

What initial costs do you need to consider?

If you’re just getting started with your business venture, there are certain costs to consider. I’ve given a few essentials to think about, but there will be many more depending on the size of your business, where you are in your journey, and your rate of growth:


Depending on the nature of your business – do you need equipment? This could be relevant to your product or service, or just equipment you need to run a business. For example, a laptop.


Do you require a website? A design programme? What about Word and Excel? Subscriptions to programmes are likely to be required and might be pretty costly at times, so keep them in mind.

Staff and outsourcing

No matter the size of your business, at some point, you’re going to need some staff or to outsource. 

Whether this is things like delivery and help with production, or freelancers and agencies. If you try to do every single task alone as your business grows, you will burn out and find yourself in a mess.

Salaries & wages

If you are currently a one-man band, keep your wage or salary in mind. If you hire a few employees, you’ll have a few salaries to pay, which might be one of the most expensive business expenses.


Are you successfully promoting your business? Marketing is a great approach to building your brand and can propel your company forward. It can be as cheap or as expensive as you want it to be, but it is an essential aspect of every business.

Understanding the pressures of rising demand

I’ll be the first to say that money is stressful, and cash flow can put a lot of strain on business owners.

It can be particularly stressful if you’re growing quickly. My company, Stada Media, has been rapidly expanding over the past few years, resulting in a slew of new expenses.

As a company grows, it requires more employees and salaries, larger premises, more resources, and other expenses. 

Growth can also lead to greater demand for services, which, although undoubtedly beneficial, has an influence on cash flow. For example, more clients may fail to pay on time, reducing the amount of cash available in the business.

The percentage breakdown of expenses

I’ve broken down my company’s costs into percentages to see better where the most money is spent, etc:

  • 2% – Utilities: Gas, electric & water
  • 4% – Other operations: Cleaners, miscellaneous 
  • 4% – Subscriptions: Office 365, Adobe, Monday, Xero
  • 5% – Rent: Cost of office premises
  • 85% – Payroll: Salaries

As you can see, payroll is one of the most expensive aspects of running a business. Our payroll vs revenue is at 70%.

We want to reduce this to 60-65%. It is crucial to emphasise that this is not an unusual figure for our industry. We intend to reduce this by growing sales rather than cutting salaries.

Lessons learned:

  • Money is a huge pressure and it’s easy to get overwhelmed. Be logical, break it down into percentages and get help if you need it.
  • Think about how you can outsource things if you’re not ready for permanent staff.
  • There will be costs associated with growing your business – assess them, work out your budgets and try to grow at a rate you can afford.

Closing thoughts

Thank you for reading this chapter of the Diary of an Entrepreneur. I must stress, I’m not trying to teach you anything. I’m just sharing my journey, and if it motivates you, then great – job done.

If you want to hear more about my entrepreneurial journey, check out the Diary of an Entrepreneur podcast on all available platforms – I talk all things business in terms of my OWN journey and experience. It’s not one to miss!

If you’d like to chat more business, feel free to get in touch with me here or you can email me directly at