Starting a Business: 7 Costs to Consider

If you’ve ever started a business, you know that it can be exciting, nerve-wracking, and fulfilling all at the same time.  Sometimes, the exciting big picture goals of what you want for the business can cause you to forget the smaller details of actually running the business.  That’s why you need to make sure you know some of the common and often-overlooked business start up costs. Running a business can be similar to managing your own finances.  I can think of three things right away that will help in both your personal and business finances. Be Realistic It’s OK to set lofty goals and aspirations, but at the end of the day, you need to look at the cold hard facts and make decisions on the solid numbers.  There’s a difference between setting goals, and making projections.  Know these differences and you’ll be off to a good start. Be Ready to Adjust You probably won’t get it exactly right the first time.  It’s just like making a budget – you’ll need to be flexible which means you’ll probably have to trim and expand budget areas as you go. Be Prepared for Emergencies If you’ve already done research for your start up costs, I’ll caution you to set aside 10% – 20% or more for emergencies and unexpected expenses.  Having an emergency fund can help during the rough patches you might encounter with your business. 7 Business Start up Costs Every business is different and will obvious require varying levels of capital to start.  If you want to start a franchise, you’ll need to have a lot more capital than if you want to start an eBay business .  There are often overlapping costs that you’ll see below, but the idea is to get you thinking about what it takes to start a business. The Unseen Costs You won’t see these costs listed too often in business or accounting textbooks, which is unfortunate because they are costs to consider when starting a business. 1. Your Time All those hours that you spend thinking and planning for your business is time that you cannot get back.  The same is true for actually running your business.  For example, let’s say you want to make money with a blog and need to build up your website.  You have the option to hire it out or spend your time creating it.  Always be aware of how much your time is worth to you and the amount that you’re investing into the business. 2. Lost Income If you decide to quit your job to pursue a new business, be sure to consider the costs of the lost income.  It might be worth it to take a pay cut to do something you love, but acknowledging this as a cost is good to do as you consider what it will take to run your business. 3. Missed Opportunities It sounds obvious, but it’s really easy for this cost to go unseen until it’s too late.  Your business will probably consume every extra ounce of attention you have, so unless you make it a point to put your faith and family first in your life, you might neglect them. The Obvious Costs These costs are common to multiple types of businesses, but can be taken for granted.  Read through these to get an idea of what you can expect to spend when starting your business. 4. Professional and Legal Fees You may spend anywhere from $150 to $10,150 or more on these costs depending on the size of your business.  You’ll see fees for all of the following: LLC filing, trademark, copyright, patents, attorney, and accountant services.  Do as much research on these areas as you can because you might not need to hire out right out of the gate. 5. Equipment Costs These are obvious and expensive items that can really add up.  Budget the costs of your computer, work vehicle, phone, printer, and other office supplies.  Your office facility will be a factor – even if you’re working from home.  Keep detailed records of these expenses as you might be able to deduct them from your taxes later this year. The [Less] Obvious Costs 6. Marketing and Promotion If you want exposure to potential clients, you’ll need to get the word out.  You can do a lot yourself if you’re savvy with technology and social media.  Your website, print materials, event costs, and membership dues will need to be accounted for as you plan budget for your business, so research the costs of hiring out as well as doing it yourself.  7. Wages and Benefits You may not have to hire someone right away, but once you do, you should research the costs of comparable salaries, payroll taxes, workers compensation and other benefits that you want to provide. If you have a business idea in mind, I hope these costs don’t scare you from pursuing your passion.  Every opportunity has its cost and it’s wise to know what you’re getting into before jumping into business. Have you ever started a business?  What business costs were most surprising to you?  Meet you in the comments! Related Articles: Pros And Cons Of Starting A Small Business 11 Steps To Starting A Small Business Online 9 Lessons on starting a business with cash How to Avoid Vacation Spending Anxiety 0% credit cards are not free Quit spending (Part 4) How a Spending Journal Can Help You Reach Your Goals Tim is a personal finance writer at Faith and Finance a Christian financial help blog that provides financial insights for individuals, businesses, and churches. Outside of finance, Tim enjoys spending time with his wife, playing the saxophone, reading economics books, and a good game of RISK or Catan. Find him on Twitter and Facebook . 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Starting a Business: 7 Costs to Consider

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