Everyone knows that starting a business from scratch is expensive. There are a lot of high costs to worry about, and sometimes these aren’t very easy to identify.
Even if you plan carefully, you need to make sure that you have enough finances to cover absolutely everything. It’s always better to be one step ahead. Otherwise, you could end up in some sticky situations.
Below we are going to take a look at the top eight hidden costs of running a business so that you can be prepared for everything.
Want to learn more? Then let’s get started!
Permits and licenses
You should already know how important it is to be legally compliant when running a business. Depending on what type you will be operating, there is a good chance you will need some kind of permit or license.
These can quickly add up to be quite a significant expense, especially when some of them require renewing. A few of the most common different types include:
- Liquor license
- Health permits
- General business license
- Commercial sign permits
- Zoning permit
Another cost that many small businesses seem to forget is the utilities that you will be using at your store or warehouse. Electricity, gas, and water will be some of your largest yearly expenses.
When you’re calculating the cost of rent, it’s essential to factor these in. You don’t want to end up being cut off because you can’t make your payments.
Vehicles are another unexpected expense that you may miss in your original budgeting plan. You may require a fleet for your employees, or deliveries and maintenance can quickly add up.
If you’re managing a large company fleet, it’s also essential to have a good fuel management system in place. Check out Beesley Fuels to see their available products and services.
Employee wages are something you have probably already prepared for when thinking about your start-up, but what you also need to remember is the cost of any benefits you will be offering.
According to benefits, they cost the average employer $21,726 per employee. While this does depend on what you offer, it’s still something you’ll need to research and prepare for.
Some of the most desired benefits include things like:
- Flexible schedules
- Wellness programs
- Subsidized travel
- Training and development
Shrinkage refers to the unexpected loss of inventory and money. This could be due to shoplifting, employee theft, paperwork errors, and vendor fraud.
Unfortunately, this is something that happens to almost every business at one time or another, so depending on what type of service/products you are offering, you’ll need to plan ahead. Retails stores are at exceptionally high risk and will need to brace themselves throughout the year.
In order for your business to handle its day-to-day tasks, there are various software subscriptions and apps that you will need to utilize. This not only assists with management but marketing and other vital aspects.
It might seem like an insignificant cost at first, but depending on how many you require and how frequently they need to renew, it can certainly sneak up on you. It’s a good idea to keep a list handy, so you always know what to expect.
Insurance is one of the most vital things that every business requires. However, what you probably don’t realize is that the further you grow, the more of it you will require.
While a few policies will generally cover a start-up, expanding will mean you’ll need to pay for more coverage. Some of the different factors that will affect how much it will cost include:
- Size and number of employees
- Previous issues
Finally, the last hidden expense that you need to watch out for is taxes. While you should be aware that you need to pay them, you might not understand how much it can actually cost.
Alongside the tax you will need to pay, you’ll also need to factor in the wage of an accountant and any other services that may be assisting you. The last thing you want is to end up in trouble because you made a mistake.
And that’s it! By following the above, you can ensure that you are prepared for all of your costs, including those that might not be very easy to see.
Remember, by being one step ahead; you’re setting yourself up for the best chance of success.