Starting a business comes with its own challenges, and one said challenge is dealing with the business expenses that you need to budget for when you go for financial assistance. If you took the risk to start your own business, you already know that it takes money to make money, and when you’re starting out, there are a lot of overlooked costs that you will forget to put into your budget.
There are some expenses that are obvious and that are appropriate to business. For example, you can find hospital scrubs at a discount and buy them in for a healthcare business, but you may have forgotten to add these to your expenses list. If you are running an IT business, you need to ensure that you’ve paid enough for support and cloud storage. These expenses are often forgotten as they are supportive and not ‘main’ expenses. There are some other costs that are overlooked and here are some of them:
Research Expenses. When you start your business, you need to conduct research in the industry and of your customers so that you know that your business idea is a valid one. Research expenses help to pay for the time that you are dealing with consumer reports and knowing who your customers are going to be. If you don’t budget correctly for it, you end up with a business that is lacking in its knowledge and won’t survive.
Business Insurance. It’s something that should be at the very top of your list of expenses, as the number of types of business insurance is fairly big:
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General liability insurance
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Medical insurance
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Worker’s compensation insurance
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Commercial vehicle insurance
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Professional liability insurance
General liability insurance protects you from disasters and worker’s compensation covers you for the full-time staff that you have on full time. Insurance can get expensive, but it’s a necessity and you can shop around for the best deals. You can talk to your legal team about the insurances that your particular business will need, and they can advise you.
Borrowing Costs. Even those businesses that go for bootstrapping still require some kind of capital to get them started. There are two ways that you can get more capital for your business: equity financing and debt financing. You can raise capital in exchange for stock in the company and it may be a good idea to attract investors this way, but you have to be willing to let go of some of the control of your business to do it.
Staff Expenses. If you have hired or are planning to hire staff, you need benefits. Wages, bonuses, healthcare, dental, training – all of these have associated costs that add up. If you don’t budget for these expenses, you’re going to find yourself well out of your depth and out of luck when you can’t hire anyone. When you don’t have benefits on your books, you cannot attract the right talent.
Don’t forget these key costs with your business, and you will be able to run a company like the boss you are.
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