What are startup costs defined as in a business context?

Startup costs in a business context are defined as expenses that are incurred during the process of creating a new business venture. These costs are typically associated with activities such as market research, legal fees, purchasing equipment, and setting up a physical location. Understanding startup costs is crucial for entrepreneurs, as these expenses can significantly impact the initial financial planning and sustainability of the new business. They are one-time expenses that occur before the business begins operations, distinguishing them from ongoing operational costs that are incurred once the business is established and active. This differentiation is important for financial forecasting and securing funding, as investors and lenders need to see a comprehensive understanding of both startup costs and ongoing expenses.