Starting a new business can be a very exciting experience. It’s a busy time too since you have so many bases to cover like hiring staff, securing financing, marketing your products, and setting up a website or storefront. It is super easy to miss or misjudge some of the startup costs. But if you miss any of these costs, like many have done before, you can put yourself in a bind before you are able to get your business up and running. Make sure you budget for these six startup business expenses.
Business Insurance
Sometimes, when launching a new business, things just go wrong. Small business owners should have business insurance in place. If you have a physical establishment, you’ll need liability insurance as well. Since every business is different, insurance needs can vary. Be sure to choose the best insurance for your situation. You may also opt for business income insurance to help protect your income if you cannot operate due to losses like fire or theft.
Licenses and Fees
Fees are often overlooked by startups. Be sure to budget for fees associated with starting your business. You may need to pay for a search and registration for your business name. Check in your location to see if federal, state, or municipal permits or licenses are required so you won’t be hit with an expensive surprise.
Utility Bills
Some of the base costs for opening and operating a small business include a lease payment, office rent, or mortgage payment. But don’t forget to budget for other operating expenses like utility bills. You may talk to other local business owners to get a good idea of what they pay for their monthly utilities. Monthly utility bills may include:
- Electrical Services
- Heat or Air Conditioning
- Telephone
- Internet
- Water
- Disposal Fees
Professional Fees
Oftentimes, accounting fees or legal fees are involved in starting a business. Don’t try to skip the cost of professional expertise. It’ll be worth it in the long run when it comes to establishing a solid business structure, drafting legal agreements, and settling financial issues early on. You’ll be able to offset these costs by minimizing future legal or tax difficulties. Talk to a few professionals to see how much you can expect to pay.
Business Taxes
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There isn’t a way to avoid paying taxes, even when starting up a new business. Make sure to reach out to state, federal, and municipal officials to learn what taxes you’ll be responsible for and when they are due. If you have a staff, then expect to pay state income and employment taxes. You’ll also be responsible for federal business taxes based on how your corporation or business is structured.
Bookkeeping, Accounting, and Payroll Fees
No matter how you choose to handle your finances, make certain to account for this monthly cost. You may use an automated system, a virtual assistant, or a bookkeeper to manage your finances. You may choose to subscribe to an online bookkeeper that can efficiently manage your payroll, taxes, and cash flow. Compare a few service providers to determine which is the best fit for the best price based on your business’ needs.
Take a Realistic Approach to Your Business Expenses
Starting up a new business means taking lots of risks. Taking a realistic look at the associated business expenses and making budgetary allowances from the get-go can help reduce your risk of failure and maximize your potential for running a successful, profitable business.
