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 $6,000, while the median cost expected by team ventures is $20,000. More than 80 percent of the entrepreneurs studied expected to cover their startup costs without bank loans, although on average they had saved only $2,000 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 $90,000 in the fifth year of their venture, while team ventures expect an income of $125,000 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.
