When it comes to running a company, you must track all of your expenses if you hope to overcome obstacles and keep growing. Many entrepreneurs forget about certain costs among the complexities and overwhelming to-do lists of business ownership. Over time, these unmet obligations can add up and put your business in a poor financial situation.
Don't let that happen to you! It's critical to stay up to date on what your business needs to pay to maintain smooth operations and position itself to thrive. Below, the Duneland Chamber of Commerce lists a few commonly overlooked expenses to keep in mind as a new entrepreneur.
If you haven't chosen a business structure yet, consider incorporating it. There are many perks to incorporating your company, such as flexibility in getting paid, liability protection from business debts, and a lower tax rate. While you can file for incorporation yourself, hiring a formation service can be well worth the investment. They can also handle any issues with registering your business’s name. That can save you legal headaches down the road.
Even if you have a basic understanding of business taxes, they tend to sneak up on you as you juggle all the other responsibilities of starting and running a company. Ensure you know when to file your income taxes and other taxes to keep your business in good standing. And consider hiring an accountant or tax professional to help you stay ahead of the game.
Without liability insurance in place, your small business is susceptible to having to pay out severe damages as a result of lawsuits. A single case can come with devastating consequences. For example, you can be sued for selling a product that harms a customer or even for a customer misusing the product. If you don't know much about business insurance, contact your current auto insurer to inquire about any policies they offer.
If you rent an office or retail space, you will need to pay for water, gas, electricity, and other utilities each month. While you want to prepare for these expenses in your budget, you also want to explore any savings opportunities offered by your providers.
For instance, your energy company may advise you on how to minimize your heating, cooling, and lighting costs. And you may be eligible for rebates from your water company on low-flow toilets and other energy-efficient products.
There are many other expenses to prepare for when starting or running a business. Think of everything you can so that you don't meet any crippling surprises. Here are some costs not to overlook:
Office equipment (e.g., computers, phones, accessories, etc.)
Although there are some expenses you cannot avoid, there are often free tools that you can use in place of expensive subscriptions. For example, you can find free templates for various marketing needs, including business cards and social media posts. You can also use free online conversion tools in order to convert doc to PDF formatted files. Why is this important? PDFs are a much more stable file type and can be viewed on almost any device. Plus, they can be password protected. For example, you might have prepared an invoice for a client. Converting it to PDF will keep the formatting and ensure the file is viewable even on smartphones and other devices. If you’d like to password protect it, simply find Protect under the Tools menu, and then select Encrypt with Password for a stable and secure file to send.
Finally, even if you do everything right, your company may hit lousy luck at some point down the road. You can have money set aside to help your business recover and quickly assume operations by preparing for hard times. If you take on financing to get yourself out of a tough spot, you will need to devise a plan to pay off your debts and avoid penalties. One of the best ways to prevent—or at least mitigate the impact of—hard financial times is to work with an experienced bookkeeper.
Understanding the Costs of Entrepreneurship
Running a business is not free, and there are many costs involved that you cannot allow to go under the radar. Consider incorporating your company to save money in certain areas and stay on top of paying your business taxes. Also, look into business insurance, budget the cost of utilities, and allocate cash toward any miscellaneous expenses you may accrue. But when you can find free or low-cost tools that can help you run your business more efficiently, explore them. You might find that they offer you the financial - and time-saving - break that you need.
Lastly, be prepared for unexpected problems and costs that could come your way. Taking these precautions can help secure your company's future and set the stage for healthy growth.