11 Common Startup Costs to Be Prepared For
You have a great idea and decided to start a business. Congratulations! You’ve taken the first step to becoming a small business owner. The path ahead of you won’t be easy, but it will be worth it. The next step involves figuring out how much it’s going to cost you. Every new business will have different startup costs, but there are some pretty common ones you can prepare for.
When you’re trying to budget for these startup costs, budget for about twice what you expect them to be – that way you’ll be prepared for the worst.
1. Registration & Licensing Fees
When you start your business, you’ll have to register it with your state, and, depending on your company’s industry, you might have to get some additional licenses, too. The fees can add up quickly. But, remember, it will all be worth it!
If you’re starting out as a one-man (or woman) show, you might not have to worry about this one. If you plan on letting your employees work from home, you won’t have to worry about rent, either. But, if you need a storefront or some office space, it’s going to cost you. It can be tough to find the perfect location with a price tag you like, but if you shop around, you’ll find it.
Paying for utilities goes hand-in-hand with paying rent. Don’t just budget for the obvious things – like electric, gas, and water. Remember that you’ll probably need internet and a phone line, too. (Most people might not have a landline anymore, but they’re still pretty important for small businesses.)
4. Office Furniture & Supplies
Even if you’re going to work from home, there are some office supplies you’ll want to plan for. You might need desks, chairs, computers, phones, filing cabinets, bookshelves, printers, ink, pens, and paper. If you do have a physical space, don’t forget a microwave and refrigerator for the breakroom, too! (Your employees don’t want to eat a room-temperature sandwich every day for lunch.
Be prepared now – payroll will probably be one of your most costly expenses for years to come. When you’re budgeting for payroll costs, don’t just think about wages, remember any benefits you’re providing and the employer portion of payroll taxes.
Besides payroll taxes, you’ll also have to pay income tax. You can work with a tax professional to make sure you’re taking every deduction and credit available to you to lessen your tax liability, but there’s still no way around paying income tax.
Are you selling products or goods? You’ll want to keep some inventory on hand so you’re not constantly out of stock.
No matter how great your company is, no one is going to do business with you if they don’t know you exist. Sure, some people might accidentally wander into your store or find you online, but you don’t want to just sit around and wait for that to happen. You need an advertising plan, which might include pay-per-click ads on Google or Facebook, business cards to hand out to your community, or a billboard.
Whether you’re working from home or have a storefront, a website is a key part of your marketing efforts. Most consumers will start their search online, so you want to make sure you have an online presence.
There are several costs that go into starting your business’s website – domain registration fees, hosting fees, and a professional-looking design.
You might have a brand-new idea that’s going to take the world by storm, but that doesn’t mean you have to reinvent the wheel. Don’t feel like you have to keep track of your expenses in an Excel spreadsheet or manually calculate your employee’s withholdings. There’s software out there (like Workful!) to help make all of that easier for you. Just don’t forget to budget for it.