Getting Started
How Much Does It Cost to Start a Service Business (Real Numbers)
The real cost of starting a service business depends on your trade, your state, and how much you are willing to do yourself versus pay for. The range is wide — from under $500 for a cleaning business to $10,000 or more for a licensed HVAC operation. What matters is understanding the non-negotiable costs, the costs you can delay, and the costs that are pure waste at this stage.
The non-negotiable costs
Every legitimate service business has some costs you cannot skip:
| Category | Cheapest path | Better path |
|---|---|---|
| Business formation (LLC) | $50-$150 (state filing direct) | $100-$300 (filing service + registered agent) |
| EIN | Free (irs.gov) | Free |
| General liability insurance | $400-$1,200/year | $800-$2,500/year (higher limits) |
| Business bank account | Free (local bank or online) | Free-$15/month |
| Google Business Profile | Free | Free |
At the cheapest path, a service business can form legally for under $700 total. Most of that is insurance. The rest is paperwork that costs time more than money.
Costs that vary by trade
Licensed trades have additional costs that unlicensed trades do not:
| Trade | Licensing cost | Notes |
|---|---|---|
| Cleaning | $0-$100 | Most states do not require a trade license |
| Handyman | $0-$200 | Some states have dollar limits per job |
| Painting | $0-$300 | EPA Lead-Safe certification may be required |
| Landscaping | $0-$500 | Pesticide applicator license if spraying |
| Electrical | $200-$1,000+ | Journeyman/master license + exam fees |
| Plumbing | $200-$1,000+ | Master plumber license required in most states |
| HVAC | $300-$1,500+ | EPA 608 certification + state trade license |
Licensing requirements and costs vary by state. Verify with your state licensing authority before relying on these ranges.
Costs you can delay (and costs you should not)
Delay these until you have revenue:
- -Website ($10-$50/month) — GBP works first
- -Paid CRM ($30-$100/month) — a spreadsheet works at low volume
- -Paid advertising — get reviews and GBP optimized first
- -Branded uniforms and wraps — nice but not revenue-generating early
Do not delay these:
- -Insurance — operating without it is a liability risk you cannot afford
- -Separate business bank account — mixing personal and business finances creates tax and legal problems
- -Bookkeeping — even free software like Wave prevents missed deductions and tax surprises
What I have learned about startup costs
The most expensive mistake I see is not overspending — it is spending on the wrong things in the wrong order. Owners who buy a $3,000 website before they have a single customer are optimizing for a problem they do not have yet. Owners who skip insurance to save $100/month are creating a risk that could end the business.
The right question is not "how much does it cost?" It is "what do I need to spend now, and what can I spend after I have revenue?" A readiness assessment answers that question by stage, so you are not guessing.
-- Richard