Business Costs You May Not Have Considered
Running a business is expensive, and most business operate on a pretty strict budget, especially when they’re first starting out. Business owners quickly realize that there are many different costs that to keep in mind, and that it takes a significant amount of time to make sure the books balance. This becomes even more difficult when you realize there are a bunch of costs that you might not have considered when you were planning your budget.
Here are seven business costs that you may not have thought of.
Repaying Loans
It takes money to start a business, and many new businesses take out loans to help afford the startup costs. However, these loans need to be paid back. If you don’t pay them back on time, you can do serious damage to your credit score, plus you’ll wind up paying a bunch of interest.
Loan payments can sneak up on you if you’re not careful with how much you borrow and how you spend your money. Before you borrow anything, make sure you have a realistic plan for how you’re going to pay the money back.
Employee Benefits
It’s important that you don’t just consider the base salary when you’re calculating how much you’re going to spend on your employees. Taxes, benefits, and bonuses will also factor into the budget and you’ll need to account for them. There are also costs associated with employee turnover, such as providing additional training for new employees. Since it’s more efficient to keep the staff you have, you’ll probably want to put some money aside for some office perks to keep your team happy.
Legal Fees
Be sure to set some money aside for legal fees. You may think that there’s no chance of your business being involved in a lawsuit, but legal issues certainly happen to small businesses. You don’t want to find yourself unable to pay for legal representation when you’re faced with a lawsuit.
Insurance
You’ll want to have at least employer liability and public liability insurance coverage. You may also want to have property insurance, insurance that protects against illness and injury, and various other policies depending on the structure of your business. All of these policies will cost you money.
Taxes
No matter what sort of business you’re running, you’ll need to pay taxes. A lot of small business owners are shocked when tax time rolls around and they find out how much they owe. If you’re not prepared to pay your taxes when they’re due, you could find yourself in serious trouble with the Canada Revenue Agency. Not only can this be a headache, but it will be very costly as well. The agency charges significant interest and penalties on unpaid taxes.
Working with an experienced Chartered Professional Accounting (CPA) firm can help you optimize your tax strategy. Not only can this reduce the amount you’ll pay in taxes, but having a plan will give you an idea of how much you’ll owe long before your tax bill is due, giving you time to prepare. Find out more about how our tax services can help your business.
Licenses and Permits
Depending on what sort of business you are running, you could be required to pay for various licenses and permits in order to operate your company. These can cost quite a lot and, since they’re necessary, you’ll need to budget for them if you want to operate your business.
Administrative Costs
Every business has various administrative costs that you may not think much of individually, but that quickly add up over time. This includes everything from accounting services and payment processing fees to credit card fees, office supplies, cleaning services, and much more. When you’re preparing your budget, don’t forget about these costs.
