Starting a small business can be incredibly exciting, but it can also be a financial challenge. For small businesses, success in the first year depends on finding a steady stream of income—and that can be difficult. From everyday expenses to high startup costs that cover everything from marketing to renting office space and investing in vital technology: Expenses quickly add up. A recent Shopify survey found that small businesses spent between $18,000 (no employees) and $60,000 (1-4 employees) in their first year. Being financially savvy during the crucial first year gives small businesses the best chance of long-term success.

The Early Expenses of Starting a Business

Many businesses will inevitably face financial challenges and unexpected costs. However, the amount you initially owe will depend on the industry and market you’re operating in. Here are some common expenses that many new small businesses face:

  • Business Registration Fees: If you’re not planning to operate as a sole proprietor, you must register your business and pay fees to the state.
  • Business Licenses: Industries like healthcare or construction require the owner to obtain specific licenses to operate their business.
  • Business Insurance: Businesses may need to purchase general liability, property, or other industry-specific insurance before they can begin operations.
  • Brand Assets: To stand apart from competitors, you may need to invest in a domain, brand guidelines, or website or enlist the help of a marketer to assist in creating a marketing strategy to boost brand awareness.
  • Equipment: From manufacturing equipment to technology systems, no matter the industry, businesses will need to purchase essential equipment to streamline operations.
  • Employees: Hiring staff to help run and manage the day-to-day business activities
  • Marketing: In addition to branding, you may need to spend money initially setting up marketing procedures and developing an ongoing strategy to get your brand noticed.

Funding Solutions During The Growth Stage

It’s been a year or two, and your business is thriving. You now have a strong customer base, and sales continue to increase. The business lifecycle’s growth stage is about striking a delicate balance for owners to capitalize on newfound opportunities while effectively managing expenses to avoid hitting a plateau. Limited budgets and resources persist, so small business owners need to be mindful of how they allocate their funds while still investing in necessary resources to see success. Even though most businesses will see a revenue stream during this time, you may want to have extra capital to tap into lucrative opportunities to help you scale. The following is a list of common funding solutions to provide you with some additional cash flow:

  • Equipment Financing: The growth stage often means an increase in production. You may consider upgrading or adding new equipment or machinery to maximize operational efficiency. With equipment financing, you can get the latest tools and technology on the market, using the equipment as collateral for the loan — meaning less liability on your business.
  • Invoice Factoring: Don’t get stuck waiting for customers to resolve unpaid invoices. Instead, invoice factoring increases cash flow by allowing you to receive 80% of an account receivable upfront and the remaining factoring fee once the invoice is paid.
  • Business Credit Card: You’ll need to strike when the perfect opportunity comes knocking. A business credit card gives you immediate access to capital and the flexibility to spend however you see fit.


Find the right funding options for your business at any lifecycle stage.

Whether you are just opening your doors or already have a successful business, it’s important that owners know about the financial options available to them at every stage of the business lifecycle. Consider taking the time to discuss your business goals and expenses with a lending professional to find the best funding option that’s right for your business.