When opening a new business, you already know you will encounter expenses. You have probably made a list of items you need to get started or even done an analysis of your revenue compared to your expenses. This is a great start, but there are some common expenses that are very often overlooked in a small business. Below, we have listed a few hidden costs that many small businesses fail to consider:
Licenses, Permits & Legal Costs – It would be in your best interest to research any licenses or permits your business will require. Obviously, this cost will fluctuate depending on the business type and location, but it can be a higher expense than you may think. A liquor license can get into the thousands of dollars depending on the state.
- Legal fees can be just as expensive. Having a few contracts written and employee paperwork properly done will definitely have you in the thousands already. Put some research into hourly rates in your area and try negotiating any fees upfront.
Replacing Equipment – Inevitably it will happen. The motherboard will fry on your 2-year young laptop or the industrial mixer in your bakery will go kaput. Allow for these unavoidable expenses in your budget now, and you won’t be sorry later.
Web Designer Costs – If are planning to do business online, understand now how expensive paying your web designer can be. Every time you need content added or products updated, you can easily pay a $100 per hour rate. There are plenty of 3rd-party resources out there that will help you combat these expenses.
The Little Things – A lot of times it’s the details that make the difference. The necessary items such as desks, copiers, pens, paper, electrical cords, and computer accessories all add up over time. You have to allow for even the smallest things like hand soap or window cleaner. Make sure to include these necessities of business into your budget.
Time – Your time is probably the most valuable resource you have invested into your business. It’s typical to spend a lot of extra time invested in your business. After all, it is your baby. But utilize your time in the best way possible. You don’t need to be answering sales calls or running errands if there is someone at your business whose time would be better served on these tasks. You will be more efficient and better serve your business.
- Keeping Up with Social Networking – This relates to your time, but realize that keeping up with your social networking is not free. It takes time & planning to update content, implement strategy, interact and respond to your following.
- Answering Emails – This may not seem that difficult in the beginning, but trust me; it gets to be overwhelming once your business takes off. The best strategy is to take time only once or twice per day to answer email. Be as brief as you can while still answering any questions in the best way. I keep a transcript of some of my most common responses so that I’m consistent and minimize typing time.
These costs are not meant to have you budgeting for everything that could ever happen. But hopefully they have exposed some uncommon costs of a small business budget.
Do you own a small business? If you know of any other hidden costs, we’d love to hear. Leave your tips below in the comment area.