Guest Post: 10 Costs New Business Owners Don’t Think About

It’s guest post week again and today we’ll hear from Stephanie Lynch of HowMuchIsIt about some of the most commonly overlooked business expenses for new startups or small businesses that can really throw a wrench in your financial plan if you don’t remember to include them in your budget. Here’s Stephanie:


If you have always thought about starting your own business and being your own boss, good for you!  It’s a great adventure that can reap a lot of rewards.

However, before you jump in, you will want to understand some of the costs you will experience, regardless of the industry you’re in.  To help you better budget for these unexpected situations, here are 10 costs many small business owners often don’t think about.

#1 Permits and/or licenses to operate legally

In order to do business with your community, you more than likely will need a permit and/or license to legally run your operations.  These requirements will vary by state the municipal area, so it’s best to talk with your local government or even do a search to see what kind of costs you’ll incur.

#2 You may need more office space

If you think you can run your business out of your home, that’s great; however, keep in mind some cities will forbid you from doing so.  Businesses that often don’t have customers should be more than fine, but if you have a salon or any other sort of business which will have customers coming through your door, you may want to look into the local zoning regulations to avoid costly fines.  If it is, indeed, forbidden, you will want to think about the office space costs in your area.

#3 Benefits to lure in great employees

When you hire an employee, you will have to more than likely pay more than their salary.  You will also have to pay their medical insurance, training and any other benefits you may want to include.  Remember, you don’t want to skimp on your benefits because this is what usually lures great employees to work with you.  If you fail to offer a living wage and/or great benefits, you may see a high turnover, which in turn, can lead to higher costs since you will have to constantly re-train the new people.

#4 Insurance to protect your assets

Your business, whether it’s in an office or in your home, will more than likely need to be insured.  At the very minimum, you will want some sort of employee liability and public liability coverage.  It’s also a good idea to include illnesses, injury and property insurance.  To learn more about what kind of insurance would be good for your business, it’s best to talk with a local insurance broker.

#5 Payment delays – you don’t always get paid

This is a hidden cost that irks many small business owners.  Whether it’s a check your client forgot to send or a three-day delay because of a credit card payment, you may not get the payments when they are expected.  Because of this, it can hurt your bottom line and may even cause some problems when you need to pay the insurance or rent bill – something that always needs to be paid on time.  

#6 Using a professional service to help free up time

Running a business, regardless of which industry you’re in, is going to take a lot of work.  What you may find out down the road is that you would rather outsource some of the things you do such as payroll or even cleaning the office.  Each service, of course, will add up, but if you look on the positive side of things, it will free up more time for you to focus on your business.

#7 Credit card fees

If you want business, you will have to accept credit cards in today’s technological era.  Sure you can accept cash and checks only, but you can bet on losing a lot of customers who want to pay with their credit card.  Depending on the credit card being used, plan on spending at least three percent in fees.

#8 Time is money

I know this isn’t an expense per se, but you still have to value your time.  In the beginning, you’re going to invest a lot of your time to make your business work.  The problem, however, is when you break down the time spent, you could be getting less than a $1 an hour.  While this can be discouraging at first, you have to picture it as an investment.  As you slowly invest your time, you should hopefully see great returns in the future, creating a wage that surpasses what you’ve always dreamt about.

#9 Conferences and trade shows

Conferences and trade shows are a great way to network with like-minded individuals, but 99 percent of these shows will cost you money.  Plus, you can’t forget about the airfare and hotels during your stay.  While this is technically an optional expense, it’s something most business owners don’t think about down the road when they want to either show off a product or meet with others.

#10 Equipment repair

Sure, you have the new copier, computers and fax machine, but what about 10 years down the road? Anyone who has dealt with technology will always tell you that you should plan on replacing these gadgets every five to 10 years.  While you may be budgeting for it now, you can’t forget about budgeting for new supplies and equipment in the future.

Stephanie Lynch is a freelance writer who also operates Howmuchisit – a cost-helping database.  She is dedicated to helping consumers find out what unknown things cost in life.

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