6 Unexpected Business Costs You Should Be Prepared For
If you are starting a new business in the US, you should must have budgeted how much setting up your new business will cost you. But there are some unexpected costs that most businesses forgot to include it. Read this article to know those business costs and which you must add in your budget.
Owning a small business will provide you with lots of great opportunities, but there are some unexpected costs that you should be prepared for. After all, there are currently over 30 million small businesses in the US… but only one-third of these will survive the next 10 years.
This is because many businesses don't create a realistic budget that factors in every cost, such as postponed payments or credit card costs.
Do you want to make sure that your business is still around in 10 years? If so, here are 6 unexpected business costs that you should be prepared for.
When most new business owners think about payments, they think about receiving them instantly — but sadly this isn't always the case. Sometimes expected payments can be delayed for days or even weeks, and this can be due to a number of reasons: maybe a customer's check bounced, or maybe a supplier withheld a bank transaction. Either way, this can cause debt and affect your credit rating, so it can be useful to create a financial safety net in preparation for postponed payments.
Credit Card Costs
Does your business have a credit card? If so, you should be prepared for unexpected costs. Credit cards can really help small businesses, especially if they have a tight budget, but it is important to be aware of interchange fees that can add up. These fees often cost around 3% per transaction, which doesn't seem like much, but it can quickly add up if you aren't keeping track.
So if you are using the business credit card to provide cash flow, make sure that you pay off the full balance every month. This will reduce the chance of the business falling into debt, and it will also help to improve your credit score.
Licenses And Permits
As a new business, you will have to pay for licenses and permits that allows you to operate as a business — but be aware that most of these payments aren't a one-time thing. You will have to renew the permits every so often, and you will often be charged for the renewal. These costs can vary greatly depending on where you live, so we suggest contacting your local council to find out more. They will be able to give you exact costs so that you can put money aside every year in preparation.
New business owners often expect every shipment to arrive on time, but in reality it is fairly common for shipments to be late or even incorrect. This is very annoying as it can cause inventory losses, so make sure that you have an inventory management system to ensure you can instantly be aware of any missing items. It can also be useful to get extra stock for very popular items. This will reduce some of the problems caused by delayed shipments.
Gas And Electric
Utility costs are an unavoidable part of having a store or office space, but they don't have to be ultra-expensive. It is possible to find a leased building that includes gas and electric in the overall cost, or if you want a more long-term option, you can use a comparison site such as Utility Bidder to get the best possible deal.
Choosing a long-term plan tends to come with lots of extra benefits, as gas and electric companies are happy to reward businesses for their loyalty. So use the comparison site to look for long-term deals (such as a two-year contract, rather than a six-month contract), and it is likely you will be able to cut costs even more.
Finally, you may want to think about hiring professionals to cover some business admin. It can be tempting to avoid this. After all, an accountant or a solicitor can be a big expense for a new business! However, it is well worth it if you can find the cash, as the expert will do the job to a high level — and this could mean extra savings for you. For instance, a qualified accountant will know relevant regulations that could give your business a tax break, which will help to save money over time.
This may not be an option when you first start your business, but if you have a little extra money in your budget we definitely suggest hiring professionals to assist you. This will help to save money, and it will also give you more time to focus on growing your business.