There are lots of costs associated in the running of a business. Most business owners budget for the essentials – this includes costs like office rent, equipment hire and recruitment of employees. However, there are other costs that are just important that can often go overlooked. Here are just five costs you must not forget about when starting a business.
Every business has to pay tax. Failing to declare taxes could get you in big trouble with authorities. Make sure that you’re calculating the tax you owe as you’re going along so that you can set this money aside. Some company owners forget about their tax until the last minute, at which point they have spent the money reserved for tax and have no choice but to take out a loan. Investing in an accountant and some accountancy software could be worthwhile for speeding up the bookkeeping process.
Insurance is another big cost that can go overlooked. For some companies, it’s a legal requirement to have some form of insurance (for instance, if you have employees, you’ll need to have employer’s liability insurance in place first). By ringing around insurance agents you should be able to find the best quote. Certain measures such as improving workplace health and safety and upping your deductible may help to lower your rates.
Legal fees are also worth considering. It could be a legal requirement that you apply to certain licenses – for instance a restaurant needs a food license and a drink license to operate. There may also be times when you want to hire a legal advisor such as when setting up a trademark or understanding workplace laws. Solicitor fees are something that you may be able to negotiate the cost of, however licenses are likely to have a fixed fee.
Thinking of hiring employees? It’s not just your employees’ wages that you have to budget for. Recruiting employees can come with other hidden costs too. These include benefits such as holiday, sick pay, overtime pay and a pension. Make sure that you’ve got enough money to cover these expenses when hiring staff.
Many businesses consume a lot of energy, which can result in high energy bills, especially if you have your own separate work premises and own lots of machines. There are lots of ways to reduce energy bill costs such as only buying energy-efficient machinery and using LED bulbs. Other simple measures such as turning off and unplugging machines when not in use can also help to reduce your energy rates. Some companies may go so far as to invest in solar panels to generate their own electricity.