5 Of The Biggest Expenses For Small Businesses

by Leon on February 8, 2013

small business expenses to be prepared forRunning your own small business can definitely be a pretty complicated thing. You might have dreamed of owning a certain type of shop, store, or company all your life, but when this dream gets realized you’re likely to learn that there’s a lot more to think about than what you’re selling when it comes to actually owning and operating your very own business. There are a lot of things for which you’ve got to be responsible and a lot of costs that you’ve got to cover when you’re in charge of a business, whether large or small. Of course, you’re always responsible for your own livelihood, but when you run a business you wind up being responsible for the livelihoods of your employees, as well. For this reason, it’s smart to make sure that you’re running your small business as efficiently as possible. Costs have a lot to do with this; it can be pretty expensive to run a company. We’ll talk about five of the biggest costs that you might face if you’re thinking about starting your own small business.

1. Health Insurance. Most employers want to be able to offer things like health insurance to their employees. These types of programs, when properly put in place and executed, make it so that your employees definitely won’t think about going to work anywhere else, and feel like you, as their employer, are interested in taking great care of them. These programs are also incredibly expensive, however, and wind up being some of the biggest costs that can affect a small business. Be prepared to shop around and look at different insurance providers so you can find one that has a plan that suits you best.

2. Advertising. No matter what your company actually does, it’s got to have customers or clients. You can’t make any money if nobody knows that you and your company even exist. For this reason, most companies pay for advertising, and this tends to get pretty expensive. You’ve got to pay to make sure that you can get your company’s name out there, so be prepared to have a good amount of money set aside that you can use to market your business.

3. Energy. It takes quite a bit in the way of resources to operate a business. You’ve got to heat and/or cool your building, and you’re more than likely going to need a lot in the way of energy to power everything. Typically, businesses have to pay a lot of money for things like electricity, because there’s usually a lot in the way of computers and equipment that are being run on a very regular basis.

4. DSL and/or Broadband Internet. Every business needs to be connected to the Internet, and this can be a pricey thing, as well. There are solutions like “naked Internet” (Internet without a bundled phone service, which is how most packages are offered) that can help you save some money, but you still might have to pay quite a bit. When you have multiple people connecting to your network, you need a lot of bandwidth to make sure they can all use the Internet.

5. Accounting Services. Your business isn’t going to get very far without some form of accounting services. Some small business owners try and handle their accounting by themselves, but if the IRS should ever take a look at your books, they’ll basically be expecting to find mistakes as soon as they learn that you were taking care of your own taxes. Business taxes are very, very complicated, and you’ve got to focus on running the show. For this reason, just about every business hires an accountant or bookkeeper to make sure everything is running properly.

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Fred Foldvary August 14, 2014 at 2:56 pm

You have complelely ignored the cost of rent/mortgage. Your business has to be somewhere. People have to live somewhere. Everyone has to pay rent/mortgage. When your small business is run out of your home you are still paying rent. Rent is the single largest expense of any business.

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