Starting your own business is an excellent thing if you are willing to put in the hard work and hours that will make it a success, but there are many factors to consider before launching, one of which is your budget. While there are obvious prices that can be calculated, there are also hidden costs that could be disastrous if you’re not prepared for them. Here are a few to watch out for.
Vehicles
If your company relies on vehicles (such as cars or trucks) to enable you and your workers to go to potential customers and clients and to carry out your work, you should expect to incur expenses. Purchasing the vehicle is an expense to begin with, but this is likely to be included in your budget spreadsheet.
However, following the purchase or lease of the car or van, there will be ongoing charges like fuel, insurance, and registration documents, as well as regular maintenance. It’s a lot of work, but it’s vital to keep your company running. It’s best to shop around to find the best fuel suppliers, so you know you’re getting a fair price.
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Your Office Space
When you initially start your own company, one of the first things you might want to do is rent an office for it. Even though it’s one of the most significant expenses you’ll have to pay, this is not an unexpected or hidden cost. However, you may not have considered the expense of the utilities you use at the workplace, which could be deemed ‘hidden.’ Water, electricity, gas, and other utility costs may not be included in your rent; as a result, you should double-check and make sure you have the funds available to cover them if they aren’t included.
You might wonder whether your business truly requires an office, or if you could really operate from home instead. This can be ideal, and a growing number of business owners are doing this and finding that it’s one of the best cost-saving exercises they have come across.
Payment Delays
If someone doesn’t pay you when they say they will or when you are expecting them to, this can have a serious knock-on effect on your business. It will mean that you may not be able to pay your own bills and suppliers, and that can affect your credit and even if suppliers will sell to you in the future. This is a high cost that is very rarely accounted for in budgets and monthly plans, but it is something that can have a seriously negative effect on how you are able to run your business, or even if you can continue to run it.
To combat this situation, it’s essential to have money in your account that can be used as an emergency fund. You may also need to speak to your bank manager about extending your overdraft facility, and if this is the case, you should do it sooner rather than later so that you can continue working.
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