Every answer to this question is a list, and every list is useless, because the honest answer is not a number. It is a calculation — and it has two halves, one of which almost nobody does.

The first half is what it costs to open. The second is what it costs to stay open until the business pays for itself. The first half is cheap and easy to look up. The second half is what closes businesses.

Why “it depends” is the true answer

A mobile coffee cart and a physical retail shop are both “a small business”, and the gap between what they need to start is tens of thousands of dollars. So any article confidently telling you $10,000 or $50,000 is describing somebody else’s business.

What you can do is turn “it depends” into a specific number for your business, using four inputs: your one-off setup costs, your monthly fixed costs, your gross margin, and how long you think it will take to reach steady trading. Everything below is about finding those four.

One-off setup costs: the cheap part

Registering a business in New Zealand costs very little. These are the current official fees, GST included:

What	Cost
Operating as a sole trader	Free
Reserving a company name	$11.50
Incorporating a company	$136.55
Company annual return, each year after	$57.20
NZBN, IRD number, GST registration	Free
Food Control Plan, template — if you sell food	$194.06
Food Control Plan renewal, each year	$77.63

Companies Office and MPI fees as at September 2026. Companies Office fees are under review, so check before you budget.

Notice the total. You can be a legally trading New Zealand business for under $150, and a sole trader for nothing at all. Registration has never been what stops anyone.

The one-off costs that actually matter are the ones specific to you: equipment, opening stock, a vehicle, a bond and first month’s rent, fit-out, a website, your first insurance premium. Write them down honestly, then add 20%. Every founder underestimates this list, and the 20% is not padding — it is the quote that came in higher, the tool you did not know you needed, and the thing that broke in week three.

The gap: what it costs to survive until you break even

This is the half that gets skipped, and it is the one that matters.

Your business breaks even in a month when gross profit covers fixed costs. Before that month arrives, the shortfall comes out of your pocket. So the real question is: how many months, multiplied by how much a month?

Work out your breakeven revenue first. Take your monthly fixed costs and divide by your gross margin:

Breakeven monthly revenue = monthly fixed costs ÷ gross margin

A business with $6,000 a month of fixed costs and a 50% margin needs $12,000 of revenue every month before it makes a cent. If reaching that takes nine months, the gap is not a rounding error — it is $54,000 of fixed costs to fund before the business supports itself, and that is before the owner eats.

A worked example

Our sample plan is for Rolling Beans, a fictional mobile coffee cart in Whangarei. Its numbers make the method concrete.

Fixed costs are $601 a month — insurance, vehicle, communications, marketing, legal. Coffee sells at $5.20 a cup and costs $1.30 to make, so each cup contributes $3.90 of gross profit, a 75% margin.

$601 ÷ 0.75 = $801 of revenue a month, or 155 cups.

Rolling Beans sells 447 cups in its first month. It clears breakeven immediately, and the gap is zero.

That is worth being honest about: Rolling Beans is an unusually easy case. Fixed costs are tiny, there is no debt, there is no rent, and it sells from the first market day. Most businesses look nothing like this. A shop with rent, staff and a fit-out has a breakeven several times higher and takes months to reach it. Run the same calculation on your own numbers and you may not like the answer — which is exactly why it is worth doing before you commit rather than after.

The number most people forget: paying yourself

Here is the trap, and the sample plan walks straight into it deliberately.

Rolling Beans finishes its first year with $24,004 of net profit and $32,671 in the bank. That looks like a success. But Paula has taken nothing out of the business all year. Not a dollar.

If she is a sole trader, her drawings are not an expense — they never appear in the profit figure. They are simply cash leaving the account. So if she needs $500 a week to live, that is $26,000 over the year, against $24,004 of profit. The business that looked like it made $24,000 actually did not quite cover its owner, and the $32,671 closing balance becomes about $6,700.

And not even that is hers to spend. Of the cash in the account, $1,667 is GST she has collected on sales and not yet paid to Inland Revenue. It sits in the bank looking like money until the return falls due. Take it out and the genuinely free cash is nearer $5,000 — on a business that showed a $24,000 profit.

Nothing in the forecast is wrong. It is doing what a forecast does — showing what the business earns. What it cannot know is what you need to draw out. That figure has to come from you, and it belongs in your cash planning from day one.

Two others in the same category: ACC levies, which arrive after your first tax return rather than during the year that generated them (the Earners’ levy alone is $1.52 per $100 of liable income — on Rolling Beans’ profit, about $365, plus a Work levy that varies by what you do), and provisional tax, which catches out almost every profitable first-year business.

How to work out your own number

Six steps, in order:

1. List every one-off cost to open, then add 20%.
2. List your fixed monthly costs — the ones you pay whether you sell anything or not.
3. Work out your gross margin: what is left from each sale after the direct cost of making it.
4. Divide fixed costs by gross margin. That is the revenue you need every month to break even.
5. Estimate honestly how many months it takes to reach that revenue, then double-check by asking what has to be true each month for it to happen.
6. Multiply months by monthly fixed costs, add what you need to draw out over the same period, and add a buffer for the month that goes wrong.

That total — setup costs plus the gap plus your drawings plus a buffer — is how much money you need to start your business. It is a different number for everybody, which is why nobody could tell it to you.

A 12-month cashflow forecast does steps four through six for you, month by month, and shows you the lowest point your bank balance reaches. That low point is the number that actually matters, and it is almost never the one people guess.