When you are just starting a business, you know quite well that you need capital – and lots of it. The expenses associated with starting a business may be vast, and you’re dealing with expenses that may include a deposit for a lease, inventory and stocks, equipment, staff, and more. But there are some costs that you may not be expecting, and it can definitely affect your cash flow if you are not prepared for these hidden expenses. So what are these potential expenses when you are just starting with your enterprise? Here’s a look at the top hidden expenses faced by many startup businesses today.
- The cost of technology
All businesses will require a web and Internet presence in this day and age, and this will not only be a major expense in terms of setting up and designing your website to make it look professional, but it also includes the cost of hosting your site. You should also consider backing up your business’ data, and this may involve purchasing a backup service online or using the cloud.
- The cost of business insurance
Another hidden expense you may not be thinking about is the cost of business insurance. If you want to protect your business against public liability (someone from the public suing your business) and professional indemnity (when a client sues your business for negligence), then you would need insurance for it. If you have a lot of equipment and make use of various gadgets or machinery for your business, you may want to get insurance for this as well. These insurance policies are not mandatory, but you are obligated to get employer’s liability insurance if you hire staff.
- The cost of fees for professional services
If your business is still small and you are just starting, you may well be used to doing things on your own. But there are certain tasks and activities that may warrant the services of a professional, such as your accounting tasks. This task is best done by an accountant who will be well-versed not only with bookkeeping but even more important tasks and matters such as tax returns, such as the central London accountants from established firms like https://www.gsmaccountants.co.uk.
When you first start, you need all the time you can spare for your business, and your priority, of course, would be to make it grow. But you can’t focus on this if you have to spend a lot of time updating your financial records and balancing your accounts. Additionally, you would also have to file tax returns and make sure you are compliant with HMRC, which are all things that an accountant can do for you.
Aside from the cost of fees for professional services such as those from an accountant, you may also have to factor in subscription fees for joining a professional body or association.
- The expense of your time
Finally, there’s your time. Think about the hours you will spend trying to deal with matters that will not make money for your business – this time is better spent on things that will actually help grow your business. So think of your time, and make sure you can rely on others for the delegation of tasks that allow you to spend more time on your business’ growth.