It’s the dream of many a negotiator – to set up their own estate agency. But new research shows it is likely to set you back more than £60,000 to get up and running.

From leasing a shopfront to licensing, legal fees, database software and marketing campaigns, real estate businesses face significant start-up costs.

To find out the true cost of a start-up, small-business credit card company Capital on Tap conducted a survey to reveal how much it costs for different industries – and estate agencies proved the most expensive.

Key findings of the study include:

• Real estate companies cost the most to set up of any industry, at £60,375 on average, compared with £23,730 for the financial services sector.
• 60% of property business owners invested personal funds to start up their business, while 40% secured a bank loan or line of credit.
• Repayments of loans and financial arrangements are the biggest unforeseen expense for those in the industry, costing £15,417 on average.
• 35.7% of agency owners said they re-structured or downsized their business to ensure the company’s survival.

Hidden costs

The Capital on Tap survey found it cost, on average, £21,193 to start your own business in the UK, with young entrepreneurs aged between 18 and 24 spending the most, at just over £46,000.

Business owners aged between 35 and 44 say they spent nearly three times less than this, with an average cost of £15,671 to start their company. Female entrepreneurs spend an average of £6,800 more than their male counterparts at £23,751 compared with £16,950.

The biggest surprise for small business owners was payroll costs, with those surveyed saying these had unexpectedly set them back by an average of £3,679.

Inventory was the second most expensive hidden expense, averaging £2,762, while  repayment of loans or financial arrangements came third, setting businesses back roughly £2,606 in the setting-up stage.

Investing your own cash

The most common way to raise funds is for small business owners to invest the money themselves, with 61% of respondents in the UK using personal investment to raise capital.

“Self-financing can give you a lot more control over your business than other options such as investors or bank loans,” said Hugh Acland, Commercial Director at  Capital on Tap. “It also means you’ll retain full control, so you will reap the full rewards when you start to turn a profit.

“However, using your own money does have its risks of course, and you need to make sure that you still have enough money to support yourself.

“Using your own funds might mean you also find you’re a little limited in terms of what you can afford, which might affect your business growth. It could be that you use some of your own savings, but then look to get some sort of loan or grant to really get your business off the ground.”