The Hidden Costs Of Running a Business And How To Plan For Them

If you’re looking to start a new business, this can be an exciting yet daunting experience. The dream of becoming an entrepreneur and running your own operation comes with many obstacles but if you plan ahead, setting up can be fun and rewarding from the outset. One of the things that is often underestimated when running a business are the costs that can creep up unexpectedly.

Educating yourself on every financial commitment your new company might entail will ensure you are prepared for every eventuality. Having some savings aside can also give you that much-needed buffer in case of emergencies too.

If you’re new to the world of business, take a look at some of those costs you might not expect and how to plan for them.

Maintenance of commercial spaces

You have a new office or commercial space, and you’re all set to go, but aside from the usual rent and utilities that come with property costs, there are some extras that you need to consider. Maintenance of your work space may be included in a service charge if you rent the space but everyday cleaning and safety costs have to be met by your business, and if you own a commercial property then all the responsibly falls

to you. Areas such as air conditioning and filtration system require professional commercial air duct cleaning services to keep them hygienic and safe for your work space. Plus cleaners and general maintenance staff costs have to be factored in too.

Insurance
There are several types of insurance a company requires, and some of the basics include employer liability and public liability. These costs differ depending on the size of your business, but there is also a host of other areas to consider such as insurance for negligence, illnesses, and injuries, as well as any business cars and equipment. Costs can start to mount up on this coverage depending on your needs so negotiating with your provider will help to regulate the charges.

Permits and licenses
Getting your paperwork in order is one of the first legal aspects you’ll have to tackle before starting your business. Depending on the type of company you are starting, there may be different licenses to obtain to carry out specific services. Getting this paperwork in order can cost money to ensure you have everything you need for validation. The process of application and renewal of permits and licenses can also
present an annual charge that you have to adhere to, to continue trading.

Payment processing fees
There are several ways to pay for goods and services in modern business, and it is important to ensure your customers can purchase goods easily with well-known payment types. There is a slight catch to offering different payment methods, and this comes in the form of fees. Certain credit cards command a higher processing rate than others, so this will determine what you offer to your customers. If you have an
online store, there is a selection of cloud-based payment providers that also offer services, but you will most likely incur a charge for using these too.

Payment delays

In the perfect world, everyone would pay on time, and you wouldn’t have to worry about shortfalls in cash flow, but unfortunately, that is not the case. Many businesses experience peaks and troughs in activity, and this can cause issues with incoming cash. To make matters worse, if you have customers that are delaying payment, this can create a ripple effect on how quickly you pay suppliers, which could see charges
added to invoices. In extreme cases, if you don’t have enough money to cover essential bills or need to go into overdrafts or financial help to bridge payment gaps, you will also experience fees for the privilege. To ensure this is not a regular occurrence, identifying trends and patterns in consumer behavior and highlighting bad payers will help to provide preparation for shortfalls in advance.

Time
Time is a valuable resource, and although it may not be considered a tangible element in your business expenses, it non-the less costs money if you waste it. Organization is key and ensuring you are putting efforts into the right areas and delegating arduous tasks that are taking up too much of your time will help to save both time and money in the long term. By considering these hidden costs when you start your new business, you can be prepared for those little costs that could begin to mount up unexpectedly.


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