Ten Cities With the Lowest Startup Costs

As every small business owner knows, it is EXPENSIVE to start a new business, but the costs can vary widely by city. So if you are considering a new business or expanding into a new region, you may want to consider cities which have lower startup costs and if you should need additional working capital for business marketing & promotion, expansion, or even equipment upgrades, you can always contact us!

This article highlights the cities with the lowest startup costs analyzed according to the below parameters:

• Filings fees – This is the average cost of licensing fees for LLCs and corporations. The data was compiled from bizfilings.com.
• Office space – This is the average cost of leasing a 1,000-square foot office. The data was compiled from REIS Inc.
• Utilities – This is the expected cost of electricity and gas for a 1,000-square-foot office according to local rates. The data was compiled from the Energy Information Administration.
• Legal and accounting fees – On a national level, startups spend $1,000 in accounting fees and $3,500 in legal fees in their first year. We assessed the number of hours of work these sums would equal for the average accountant and lawyer on a national level. We then arrived at our local costs by multiplying those hours worked by median local hourly pay for accountants and lawyers (based on 2016 Bureau of Labor Statistics data).
• Payroll – This is the cost of hiring five full-time employees at the median annual salary. The data was compiled from the Bureau of Labor Statistics.

The following are the top ten cities with the lowest start-up expenses (Note: the following are the expected costs for a start-up in its first year of business).

In Chattanooga, Tennessee, filing fees are expected to be approximately at $450, office space at $15,200, utilities at $2,075, legal & accounting fees at $4,167, payroll $209,664. These costs amount to a total of $231,556.

In Knoxville, Tennessee, filing fees are expected to be approximately at $450, office space at $16,210, utilities at $2,075, legal & accounting fees at $4,211, payroll $212,680. These costs amount to a total of $235,626.

In Greensboro, North Carolina, filing fees are expected to be approximately at $252, office space at $16,890, utilities at $1,627, legal & accounting services at $3,867, payroll $213,408. These costs amount to a total of $236,044.

In Wichita, Kansas, filing fees are expected to be approximately at $140, office space at $14,720, utilities at $1,926, legal & accounting fees at $3,533, payroll $216,424. These costs amount to a total of $236,743.

In Little Rock, Arkansas, filing fees are expected to be approximately at $270, office space at $16,140, utilities at $1,791, legal & accounting fees at $3,385, payroll $215,280. These costs amount to a total of $236,867.

In Columbia, South Carolina, filing fees are expected to be approximately at $123, office space at $16,300, utilities at $1,885, legal & accounting fees at $3,237, payroll $216,112. These costs amount to a total of $237,657.

In Memphis, Tennessee, filing fees are expected to be approximately at $450, office space at $18,860, utilities at $2,075, legal & accounting fees at $3,878, payroll $214,656. These costs amount to a total of $239,920.

In Lexington, Kentucky, filing fees are expected to be approximately at $90, office space at $17,120, utilities at $1,968, legal & accounting fees at $3,194, payroll $218,088. These costs amount to a total of $240,461.

In New Orleans, Louisiana, filing fees are expected to be approximately at $143, office space at $18,860, utilities at $1,867, legal & accounting fees at $3,951, payroll $217,048. These costs amount to a total of $241,869.

In  Louisville, Kentucky, filing fees are expected to be approximately at $90, office space at $16,670, utilities at $1,968, legal & accounting fees at $3,362, payroll $221,312. These costs amount to a total of $243,403.