Starting your own business may be exciting, but it sure isn’t cheap. If the thought of you starting a business for yourself has always intrigued you but you haven’t got around to doing it, it may well be time to do it now. Before you get started, you need to understand the costs that you will be absorbing so that you do not underestimate them.
There are the obvious business costs that most companies consider without issue. This is everything from manufacturing to outsourcing an accountant. You also have to think about rent if you are going to use a business premises, 338 fiduciary costs when hiring in employees and then the associated legal costs that your business may have to pay out on legal advice. However, there are plenty of hidden costs that most business owners do not consider. We’ve put together a small guide to help you understand the type of hidden costs involved in business that are easily overlooked when they shouldn’t be.
- Licenses. One of the biggest factors of every business is paperwork and it’s very rare that the paperwork you have to think about is a one-time expense. You may not need permits or licenses in your business, but if you do you have to factor in the renewal costs and dates for renewal in your yearly finances. While you’re at it, you could find networking membership groups that your business could be a part of and join them so that you can make good contacts in business. It’s a cost, but one that could reap reward.
- Office Space. We’ve covered rent above, but it’s not just the rent you have to think about. Your small business may have started in the spare bedroom, but it likely won’t stay there. Expansion into an office space means factoring in the ground rent as well as the monthly rent, utilities and other local costs. You must also rent office space on the basis of the growth you are aiming for in your business because there is simply no use in renting a small office if you hope to employ ten extra people.
- Equipment. With an office comes office equipment. Sure, you can have your people working on their own laptops, but you still have to pay out for IT equipment, software and ergonomic office furniture that is compliant with the needs of your people. You can save money by investing in second-hand larger equipment like printers and copiers, but you should still make sure you over budget for these costs.
- Recruitment. One of the biggest costs to a company is recruitment when you come to expand. This is a huge cost, because you have to factor in advertising, potential outsourcing to an agency and the cost of your time taken by interviewing and training as well as CV sifting. Always factor extra into your staffing budget so that you can ensure you haven’t left any stone uncovered in your search for the right employees.