Which of the following best describes Start-Up Costs?

Start-up costs are defined as unique, one-time business expenses incurred when launching a new venture. These costs encompass various expenditures that a business must address before it becomes operational, such as purchasing equipment, licensing fees, initial inventory, and lease deposits. Unlike ongoing operational costs, seasonal advertising costs, or monthly maintenance expenses, which recur throughout the life of a business, start-up costs are typically incurred at the initial stage and are crucial for establishing the business.

By accurately identifying start-up costs as one-time expenses, it emphasizes the need for entrepreneurs to effectively plan and allocate resources before fully launching their operations. This understanding is essential for financial forecasting and ensuring that sufficient capital is available to cover these initial investments without impacting the ongoing financial stability of the business.