Small businesses are actually the backbone of most national economies. Unfortunately, they face the most hidden costs and regulations. A key factor in running a small business successfully is, managing cash flow. You’ve probably accounted for all the expenses associated with running your business. Everything seems to run smoothly until the unexpected costs arise. Some of the hidden costs that can drain your cash flow include:
Permits, Licenses, and Dues
Many small business owners are not aware of the number of regulations relating to running a business, including permits and licenses. What’s more, they are rarely one-time expenses, since they come with initial costs along with renewal fees, and the cost may keep fluctuating. Also, as a small business owner, you need to set aside some money for membership dues from local and industry organizations. Such memberships can provide great exposure for your business as well as keep you informed about the current market trends.
Office Space Utilities
During the early stages of your business, the ideal thing would be to skip out on renting and maybe consider a home office. This would significantly reduce your startup spending. But, if you have to rent or construct an office space, watch out for hidden costs such as waste management services, heating and cooling costs, the cost of having a business address, phone line, unpredictable electricity costs, and so on.
There are several insurance policies you can take to protect your investment from unknown risks. Some include public liability, employee health insurance, workers compensation, commercial auto, etc. The rates vary depending on the coverage options and the type of business. Plus, you need to budget for the costs associated with periodically reviewing your coverage to ensure they meet your current business needs. Talk to an insurance agent at onesureinsurance.co.uk to help you understand your options and what coverage options will fully protect your business.
Employees and Benefits
Employees help your business run efficiently. Investing in them goes beyond paying their salaries. It also includes providing a clean and safe working environment, flexible schedules, office perks, paid leave, and so on. Other hidden costs associated with having employees include payroll taxes, workers compensation, benefits, employee turnover, health insurance, and much more. Unhappy/unsatisfied employees will definitely look for greener pastures. Keep in mind that there are several monetary and time costs associated with employee turnover.
Equipment, Maintenance, and Upgrades
Despite the type of business you run, chances are you need equipment. The cost of acquiring smaller equipment such as paper, scanner, chairs, and desks, can be forgotten in the mix. Over the course of their life, both small and large equipment will need maintenance or repairs to keep them in good running condition. This will be an ongoing expense, which can put a strain on your cash flow. Over time, you’ll also have to budget for additional equipment or upgrades to keep up with the growth of your business as well as the current market trends.
This post has been contributed by Pete McAllister, it may contain affiliate links