Not everyone is aware of the hidden expenses when starting a new business. But if not taken into consideration, these expenses could destroy your entrepreneurial chances before you even open your doors to the public.
It is precisely because of this that we must talk about the 5 hidden expenses when starting a new business. This article is written based on years of experience in the field, so make sure you go through to the end.
With all that said, let’s start.
1. Licensing Fees
Every business owner must have the required licenses within their industry/field so they can open their establishment. These could mean a number of things, but the general consensus is that people are mostly unfamiliar with the costs that come with obtaining them.
There could be dozens of licenses tied to a particular industry and the best way to overcome them is to look them up. The most common one that every new business owner has to pay for is a business license. This license is tied to the physical location of your establishment or company and can be determined through a number of ways.
For example, each state within the US charges differently for this license. Some charge more and some charge less. Also, your local government could ask you to pay for different license fees based on the city where you live, the jurisdictions that you engage in business, and whether or not you’ll be conducting online business through an online platform.
Speaking of the latter one, if a company wishes to engage in business on a nation-wide level, then it must have a license for all 50 states. As you might expect, this will cost you a significant sum of money. So, before you do anything with your company, make sure you enquire about these licenses.
2. Surety Bonds
A surety bond is a very important piece of document that guarantees your company will act and behave accordingly to certain laws within each state. This bond is essentially an “agreement” between your company, the company that sells the bond, and your customers.
Surety bonds are especially important if your company sells products or services to customers. This last part might’ve sounded quite obvious, but there are a lot of companies that don’t engage in selling products or services to customers.
Regardless, obtaining this bond will guarantee that you’re a law-abiding business that doesn’t engage in shady practices. This bond effectively separates those that engage in unethical practices across hundreds of markets, but you might not even know that you need this piece of document.
If you’re not aware of this document, then chances are you’ve heard about it while in the process of obtaining licenses.
If this is the case, then expect to pay for a premium to obtain this document. The premium can cost anything from $250 to a whopping $20,000.
No doubt that the higher the cost, the more it will put you in an unwanted spot. Also, you can imagine how bad it would be for your company to have to pay $20,000 to obtain a document that speaks for your legality.
Luckily for you, you can keep up with all the business-related news by visiting businesschew.com.
3. Professional Fees
When we talk about professional fees we mostly mean about lawyers and accountants. And this is something that would be very unwise if not taken into consideration.
Regardless if you know the ins and outs of the entrepreneurial world or this is your first rodeo, it’s important to have the right people by your side that will aid you throughout the process.
Having a person to look after your finances can be a salvation, especially if you’re running a bigger company. Also, having legal protection by your side gives you a higher chance of making it in the first year.
While these are mostly unneeded if you’re running a significantly smaller company that employs one to three people, they could be the difference-maker when wishing to expand.
4. Tech Costs
Probably the lest-hidden fees are the costs that come with employing technologies that help you run operations much easier.
However, regardless of which line of work you’re in, you’ll always need technology to help you run things. Even using something as so small as Microsoft Office still means paying for it.
But most technologies are far more expensive than this. What you get with them, however, is a better and far moiré efficient way of managing your business.
Depending on your needs, these are some of your technological needs:
- Computers along with hardware components so you and your employees could easily correspond with potential clients
- Employee smartphones so that your employees don’t use their personal phones for business-related practices
- And various types of software that will allow a smooth intercept of data as well as, easier processing of that data and easier reading.
You’d be surprised to find how expensive technological costs can be. While we’re mostly aware of them, we’re also quite naïve in thinking that we don’t need them.
5. Utility Fees
And onto the last type of hidden fees that we’re also quite aware but don’t really expect them to be so high, are the various utility fees that every business owner has a hard time figuring out just why they’re so high.
If this is your first time running a company, then trust us when we say that paying for utility fees will cost you quite a bit of money. This is especially the case for business owners that are looking into opening a company with dozens of employees and large scale operation.
There are multiple problems when opening a larger company. For example, employee costs could rack up as time goes by. This wouldn’t be the case if you’re experiencing a steady flow of income.
Also, larger facilities and buildings come with higher maintenance costs that take into consideration things such as lighting, heating, air conditioning, power, and many more.