Starting your own business is an appealing prospect. Not only do you get to be your own boss and decide your own working hours, but it provides the opportunity to follow your passion. However, 7 out of 10 new businesses will close their doors within 10 years, with money contributing to failure.
To help your new business thrive, here are some hidden costs to consider when starting a business.
Recruitment
While you may start out as a solopreneur, in all likelihood, you will soon need to hire employees. Recruiting staff can be a long process and many businesses forget about the cost involved. Every hour spent advertising, interviewing or training costs your business valuable time and money. In addition, high staff turnover can be costly, so retaining employees is important, too.
Insurance
When starting a new business, it is vital to protect it. Insurance can cover your business in the event of accident, injury or loss, making it an essential expense. However, many business owners fail to factor this hidden cost into their budgets. To find affordable protection, research the type of insurance your venture will require and compare prices.
Shipping
If your business will need to send frequent parcels, then you have probably looked into shipping costs. However, there is a hidden cost that can be very expensive: large shipments. In the case of large and heavy items, pallet shipping is a must. However, this can add extra expense, which if not budgeted for, can eat into profits and affect your bottom line.
Payments
Some businesses receive instant payments when selling goods from a reliable point of sale system, but others use an invoice system that has a longer period. This can result in limited cash flow, a hidden pitfall that can be easy to forget. To make sure your new venture can stay afloat, it is imperative to include this in your budget to make sure your business can thrive when waiting for payment.
Utilities
When it comes to the day-to-day costs of running a business, you may consider equipment, rent and wages, but utilities also form part of your overheads. With technology, heating and lighting, utilities can soon add up, costing your business a small fortune. This hidden cost can spiral out of control, so make sure to think green and reduce your company’s energy consumption.
Starting a business can be exciting but ensuring that your business is able to survive requires a lot of hard work. To make sure your business is stable, prepare for these hidden costs.
