A new report issued by the SBA sheds light on the cost of start-ups. It reinforces the point that many of us are making: most start-ups have nothing to do with venture capital type deals, so why do we spend so much time talking about them??!! Here are some highlights from this report:
“Entrepreneurs project modest startup costs for most new ventures, according to a study released today by the Office of Advocacy. Solo entrepreneurs expect median startup costs of ,000, while the median cost expected by team ventures is ,000. More than 80 percent of the entrepreneurs studied expected to cover their startup costs without bank loans, although on average they had saved only ,000 towards that goal.” (SBA Number: 03-49 ADVO).
And these are not just life style businesses. They are businesses that will result in substantial income:
“The study also showed that optimism about their business potential underlies the entrepreneurs’ activities. On average, solo entrepreneurs believe they will have business income of ,000 in the fifth year of their venture, while team ventures expect an income of 5,000 in the fifth year. The higher team venture projected income makes it more likely that such ventures will result in new job generation.” (SBA Number: 03-49 ADVO).
For the complete study go to the SBA web site.