Starting a business is a huge step towards living the American dream. You can make your hours, be your boss, and potentially make more money than you’ve seen so far in your life. The green can be a little blinding, so a lot of people overlook some hidden costs that will pop up and surprise them.
It’s better to get prepared for these than scrambling to pay them with what profit your new company has.
There are so many kinds of insurance that your company will need, that it might make your head spin. Professional liability, property, workers comp, product liability, vehicle, and business interruption insurance all add up to a large amount every month you have to pay them. Although it may seem reasonable to skip a few of these when you start: don’t do it. If you skip out on any of these, you could be setting yourself up for a larger payment later.
Unless you started your company via a crowdfunding site, you’re going to have loans to pay back. When getting these loans, keep in mind the amount of interest that will get tacked on with time.
Not every company offers these, but many do. When conceptualizing your business, it’s hard to think of things like these- but they’re essential when hiring.
Fees and Permits
These charges should be obvious, but many forget about them. You have fees and permits to pay for just by running your business. It’s not great, but it makes sure your company doesn’t get shut down and lose vital operating hours.
Keeping your equipment up and running, despite how new it may be, can be pricey. Make sure to get your equipment checked early and often so that you don’t have to suffer a large loss that leaves you running to small weekly loans to stay afloat. You’ll need to take care of your machinery first and foremost.
General Building Needs
Running a company isn’t just about the product and the employee’s pay. It’s about making sure your employees are comfortable in their workspace so that they’ll keep working for you. These needs are coffee, toilet paper, soap, and other things that make a business livable for employees. Smart companies spend more here so that their employees will work harder and appreciate them more.
Even though you’ll get paid eventually, a delay can cost you money. It can mean you miss a payment as well, leaving you to pay late fees. It can also mean that you miss out on the interest that money would gain if it were sitting in your bank account. Nobody wants to think they’ll receive a late payment, but you can’t avoid them.
Shrinkage is another unpleasant charge to consider. This loss whittles down to shoplifting, employee theft, loss because of spoiled food, and a lot of other losses. Shrinkage can make you feel like your business is hemorrhaging money, and no company is immune to it.
Disclaimer: This content does not necessarily represent the views of IWB.