Owning your own business can often seem like the dream occupation, being your own boss, doing as much or little work as you desire, being in charge of your own company and personnel. While most of us are very aware that setting up our own business can be expensive, we should also remind ourselves of some of the expenses that most people tend to overlook when starting their business.
Employee Benefits - Sure, we all know that we need to pay the staff that will work under us, however, many of us forget that each and every one of those employees have a right to sick pay, maternity pay, health insurance as well as vacation pay. Be sure to balance employee expectations with your own budget for a comfortable work atmosphere. Detailed information can be seen at the Department of Labor’s website.
Maintenance Costs - Company maintenance can be expensive as well, things such as tools and supplies. If you own a fleet of delivery vehicles, maintenance costs will hugely affect your bottom line. You will need fuel and insurance, not to mention regular servicing for the vehicles. It would be wise to look at the costs of an in-house mechanic team. Equip them with the right tools. If they are regularly inspecting the interior of engines, it might be wise to invest in some maintenance tools like an engine hoist, a lift, and maybe even a video borescope to avoid the cost of taking apart your vehicles engines.
Utility Bills – Water, electricity and heating are all essential to a work place, and unfortunately, that means you will have to pay the bills monthly, and they won’t be cheap, even for a small business! Keep signs up about preserving water, and keep the thermostat at 72°F to maintain a comfortable and economic workplace.
Rent Payments - Renting your office building, or work space can affect your expenses hugely. Small businesses will pay hundreds or thousands of dollars for a small office area, so be sure to check with other local businesses on their experience of the block or building you looking at renting. Don’t settle on your first choice either. Do the research to be sure you get the best fit for your budget.
Credit Card Fees – Allowing customers to purchase items via credit card will certainly increase your potential pool of paying customers, however, each credit card company will take a fee per transaction (roughly about 3%). Finding the balance between customer ease of purchase, and which credit companies to use will be a key to optimizing your store. The options around these services have advanced greatly with mobile phones.
Ultimately, there are always hidden or unforeseen costs associated with starting a small business. Plan ahead as much as possible and talk to fellow investors or small business owners for advice. Using techniques such as the marketing 7 P’s can assist you to no end as well.