There is a class of search query — "how much does it cost to start a business in [state]" — where the top Google results are uniformly two things: state government .gov pages with sparse fee tables, and business-formation services like LegalZoom selling their own service.
Both versions undercount. The .gov pages list the formation fee and stop. The formation services list the fees they charge plus the formation fee. Neither tells you what it actually costs to open the doors.
Formation fees are the smallest line item
LLC formation in most states is $50–$200. New York is $200, Delaware is $90, Wyoming is $100. These are real numbers. They are not interesting numbers.
The interesting numbers are everything else.
The recurring fees vary 100x
California charges every LLC a minimum $800 franchise tax annually, regardless of revenue. A California single-member LLC that earns $0 still owes $800 every year. Massachusetts charges $500 to form and $500 every year. Tennessee charges $300 minimum + $50 per member, every year.
On the other end, Wyoming and Texas have effectively no recurring fee for small LLCs (Texas franchise tax kicks in around $1.23M revenue). Kentucky's annual report is $15.
A single LLC over 5 years in California pays $4,070 in state fees. The same LLC in Wyoming pays $400. Same legal structure, 10x cost difference, identical product.
New Jersey liquor licenses regularly trade for $350,000 to $1,500,000+ on the secondary market. In dense towns, the license costs more than the entire bar buildout combined.
The industry-specific budget killers
Most business types are pretty similar across states. A few are not:
- New York LLCs must publish formation notice in two newspapers for six weeks. Cost: $600–$2,000+ depending on county. NYC is the expensive end.
- New Jersey, Massachusetts, and Pennsylvania are quota states for liquor licenses. Secondary-market license prices in dense municipalities run $100k–$1.5M+.
- Daycare centers everywhere face strict ratio + sq-ft + fenced-outdoor requirements that drive 6-figure buildout costs.
- California contractor licensing requires a CSLB exam, a $25k bond, and (for LLCs) an additional $7k bond.
What the calculators don't tell you
Three categories of cost that consistently get omitted:
- Working capital. Restaurants and bars don't hit positive cash flow for 6–12 months. Plan for 3 months of rent + payroll + utilities before opening.
- Buildout. The biggest variable in any retail business. $50–$500+ per square foot depending on what was there before.
- Insurance shop-around. Premiums vary 2x between brokers for the same coverage. Get three quotes.
Our startup cost calculator covers all 50 states + DC across 12 industries. It separates one-time costs from annual recurring costs, surfaces state-specific overrides for the budget killers (NJ liquor, NY publication, CA franchise tax, TN per-member fees), and includes a hidden-costs section for what people forget — three months of rent during buildout, fire suppression on Type I hoods, plumbing for shampoo bowls, the full Etsy fee structure.