As a new entrepreneur, it’s easy to become overcome with excitement for the future. While being optimistic about your business idea is a good thing, letting it cloud you from the realities of the undertaking isn’t. Accidentally overlooking business expenses that typically come with launching a venture can be catastrophic, potentially causing your business to fail.
By learning about various costs, you can make sure they are on your radar. Here, Portfolio Management Group shares some business expenses new entrepreneurs commonly overlook.
Depending one which entity you choose for your business, you get a range of benefits, including:
- Lower tax rates
- Flexibility in how you get paid
- No personal responsibility for business debts
While the registration process is straightforward, many entrepreneurs overlook the cost. Generally, the costs will depend on which state you reside in; however, that might not be the only expense. If you use a business law attorney to handle your filing, you can expect to pay considerably more, especially for business law specialists.
If you want to avoid hefty attorney fees, you do have options. If you’re willing to do the research, handling it yourself could be on the table. However, going with a formation service is also a solid approach. You’ll get professional assistance along the way, ensuring everything is done correctly.
Permits and Licenses
Along with incorporation costs, many entrepreneurs will need to secure specific permits or licenses to operate. How much those will cost vary depending on the nature of your business and your location.
You also need to factor in the initial cost as well as plan for future renewals. That way, you’ll always be ready to cover this critical business expense.
While business insurance isn’t mandatory for all business types, having this kind of protection is essential. It’ll help manage expenses relating to unexpected events, including lawsuits or similar claims that might threaten your company’s survival.
Additionally, some entrepreneurs may be required to get it. For example, accountants have to have professional liability insurance, and they aren’t the only ones subject to this kind of requirement.
Small business insurance is usually pretty affordable. However, if you overlook the expense, you may fail to maintain your policy, something that can lead to headaches later.
Website Hosting and Domain Names
Some entrepreneurs assume that getting a company website up and running is mainly a one-time cost. However, that isn’t the case.
Since most companies aren’t operating their own web server, website hosting is an ongoing expense entrepreneurs need to shoulder. Otherwise, the site won’t have a place to “live,” making it inaccessible.
Similarly, a domain name isn’t a one-time cost. Technically, domain names aren’t purchased; they’re rented. If you fail to resecure your domain name when the initial contract expires, it becomes available to others. As a result, someone else can scoop up your domain name and use it for their own site, sell it to a competitor, or offer to sell it back to you for an inflated price.
Securing your website hosting and domain isn’t usually very expensive. Still, if you overlook this expense, it can be catastrophic.
Home Business Expenses
While it’s true that you can save on costs when you operate your business out of your home, it’s important to realize that you’ll still have to pay for office-related expenses. This can include superior internet service, an extra phone line, and furniture that maximizes your productivity. If you need an office chair, for example, there are many budget options available, but be sure to prioritize chairs with lumbar support and adjustability.
Optimism can carry entrepreneurs a long way toward finding success, but you need to be realistic about your business expenses. With the tips above, you can prepare for future expenses and meet your business goals.
Portfolio Management Group consultants can help your business overcome challenges with outside-the-box thinking. Call 727-370-3080 to schedule a no-cost consultation!