Starting a business is an exciting time, but it’s also an eye-opening experience when it comes to running costs. There are so many things to consider, from the actual premises right through to the printer paper. We’re not trying to put you off; instead, we want to highlight some of the costs you’ll incur every month so you can calculate finances accordingly.
Let’s explore some of the costs that every business owner needs to include in their budget.
Office Space
This is one of the first items on the list you’ll need to secure. It doesn’t matter whether you’re looking for a large warehouse or a small space to perform administration matters, you’ll need to find a suitable area to rent.
If you’re planning on seeing customers and conducting meetings at your workplace, take time to make sure you choose a place that’s easily accessible and has sufficient parking. Don’t pick an area off the beaten track because the rental costs are low.
Of course, if you choose to run a home office, you must ensure that you have enough space to dedicate to your business at home. You won’t have to pay rental costs but will need to invest in all the equipment you need.
Utility Accounts
These are non-negotiable costs that are payable each month. Your water and lights are mandatory features, and so are gas and telephone accounts. Keep a record of your spending as you can usually add these onto your tax returns when it’s time to submit.
You can’t cut these costs entirely but look into ways that you can save on these every month using energy-efficient lighting and online platforms to chat instead of using up big telephone bills.
Insurances
Every smart person knows that business insurance is compulsory. You must protect your assets in case you fall victim to a robbery or a natural disaster.
If you have staff who deliver goods to customers, you’ll need to make sure that they have the right car insurance in case they’re in an accident. Click here to see how you can secure affordable insurance rates for your business.
Marketing Costs
To grow your business and generate more revenue, you’ll likely need to allocate some money towards your advertising spend. These costs vary across companies in different industries.
It’s usually a good idea to start small if you’re on a tight budget. Don’t get into debt advertising your company, especially if you’re just starting.
A certain amount of your marketing expenditure can be included in your deductibles, so keep a record of everything for tax. It’s a good idea to check with your tax specialist to understand what you can claim.
You can make it easier by keeping separate files for your company’s expenses. Take the time to create neat, labeled folders so that when the tax filing season arrives, you’ll be ready to access everything you need.
Wages
You might start as a one-person operation, but as the business grows, you’ll likely need to bring in extra help. As more people join you’ll need to pay more in salaries. Your staff is an integral part of your business, so choose carefully when you decide to bring new team members into your operation.
Professional recruitment firms can be a great help when you’re looking for someone with a particular skill. They take the hassle out of filtering through hundreds of applicants.
A recruitment company will usually charge you a small fee when you find the right candidate, but it’s worthwhile to enlist the help of a staffing firm who can make sure you find the best fit for the position the first time around. This way, you’ll know that the wages you’re paying are well earned and going to the right people.
General Office Supplies
It’s easy to overspend when it comes to stationery and bits and pieces for your desk. Shop around to look for good deals and specials. Sometimes it makes sense to buy notebooks and pens in bulk, so don’t buy the first items you see.
Big office supply companies usually offer better pricing to business owners, so check with the sales team to see if you can register for a better pricing structure.
Professional Fees and Legal Costs
This is an area that’s often overlooked because the costs might not be payable each month. It’s a good idea to make a provision for these payments in your budget so that you have the funds available when the time comes.
Some legal firms will charge a company a fee to retain their services, while others might only bill you when they perform a function. External accounting firm bills will pop up around tax-filing time, so don’t forget about the team that makes sure your money matters are in order.
If you subscribe to any organization or publication, these costs will fall into this category. Always check that you need the subscriptions before you commit. It’s a common mistake when you’re starting up a new business to over-subscribe to various memberships that you don’t need.
The Bottom Line
These are just a few of the operational costs that you’ll need to factor in your business’s financial aspect. Keep a clear and accurate record of all incoming and outgoing amounts. If you’re a small company, an excel spreadsheet is adequate to track spending.
Keep in mind that depending on your business’ nature, there will be additional costs to these mentioned above. Owning a business takes a lot of time and planning, but when you get it right, the loss of sleep will be a distant memory.
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