Methodology: Startup Cost Estimator

1. Scope

Totals one-time pre-launch costs and recurring first-year costs across categories (legal, tooling, infrastructure, marketing, contingency). It does not replace a cash-flow model — pair it with the Monthly Burn Rate Calculator for operating state.

2. Inputs and outputs

Inputs

oneTimeCosts array

Each item: label, amount, category.
recurringMonthlyCosts array

Each item: label, monthlyAmount, category.
contingencyPercent percent default: 15

Outputs

oneTimeTotal

Sum of one-time costs.
annualRecurringTotal

Sum of recurring × 12.
contingencyAmount

contingencyPercent × (oneTime + annualRecurring).
firstYearTotal

oneTime + annualRecurring + contingency.

Engine source: src/lib/startup-cost-estimator/engine.ts

3. Formula / scoring logic

one_time_total    = sum(one_time)
recurring_annual  = sum(recurring_monthly) * 12
contingency       = (one_time_total + recurring_annual) * contingency_rate
first_year_total  = one_time_total + recurring_annual + contingency

4. Assumptions

First-year horizon. Beyond year one, re-run with updated recurring costs.
Contingency is a blanket buffer, not a risk-weighted reserve. A detailed risk register is out of scope.
Payroll is bundled into recurring costs by the user — no built-in salary logic.

5. Data sources

US Small Business Administration — Costs to Start a Business as of 2024

6. Known limitations

Category definitions are editorial, not GAAP. Use the output as a budgeting aid, not an accounting document.
No tax credit or grant modelling (e.g., R&D tax credit, SBIR). Adjust inputs downward by any credits you expect to claim.

7. Reproducibility

Input
oneTime = $8,000, recurring = $1,200/mo ($14,400/yr), contingency = 15%.

Expected output
one_time_total = $8,000, recurring_annual = $14,400, contingency ≈ $3,360, first_year ≈ $25,760.

8. Change log

2026-04-24 methodology page first published.