Entrepreneurship and Small Business (ESB) Certification Practice Exam

Which of these is NOT commonly included in a breakdown of startup costs?

1. Trade show attendance

2. Rent expenses

3. Legal expenses

4. Employee training programs

The correct answer is: Employee training programs

Startup costs typically include necessary expenses that a new business incurs before it starts generating revenue. This can encompass various types of expenditures that are essential for getting the business up and running. Rent expenses are crucial as they represent the cost of location, which is often a primary concern for new businesses. Legal expenses also fit into startup costs, as they cover essential legal activities such as business registration, obtaining permits, and possible consultations with lawyers. Trade show attendance can be relevant as well, especially for businesses that rely on showcasing their products or networking to establish market presence. Employee training programs, however, are generally viewed as an ongoing operational expense rather than a startup cost. While training employees is important for long-term success and efficiency, it usually occurs after the initial business setup and therefore is not typically included in the breakdown of startup costs. This distinction is why employee training programs were identified as not commonly included in startup costs.