Yeah, yeah, we’ve heard it all before: starting your own business and becoming your own boss is the best thing you can do because it will give you freedom and riches beyond your wildest dreams. We’re not disputing that. It is hard, but it can be done. But before you try and battle against the odds, shoulder some serious pressure and make it as an entrepreneur, it is well worth understanding the financial-slash-expenses side of things.
The number one reason why businesses fail is that they underestimated the costs involved in running a business. It is as simple as that. That may sound foolish and like something you would never do, but a lot of the costs associated with failure are what we call “hidden costs” and that is what we are going to cast some light on now.
It All Starts With Paper
If you are going to start a business then there almost always tends to be paperwork that requires your attention. It could be a permit that you require, or a license, or a membership fee for joining a certain organisation. What’s more, these costs rarely turn out to be just one-off expenses, so make sure you are aware of the renewal costs and how often they need to be paid. To get the most value for your money, try and look out for membership offers that offer discounts on certain things like insurance, loans, credit card fees, training or anything of this ilk.
Financial Fees Are The Worst
There is a lot to think about on this front, so it is worth committing some time to it if possible, just so that you are not falling into any traps. To hit the most crippling hidden costs on the head, you are going to need to start business banking, in which we suggest you use a Cashplus business banking account as a low-cost alternative to the more traditional options.You also need to be aware that, if you allow your customers to pay by credit card, then you will be expected to pay around 3% in fees, which is something you may want to get the customer to cover. And last, but by no means least, at all, is the use of credit. Please, please be careful about financing expenses or cash flow with credit. In fact, you should look at other forms of financing to avoid the pitfalls that are credit cards.
Getting Physical With Your Business
The idea of having an office to operate from is one that is still synonymous with business, but it is always worth deciding whether to not you really need one. It may be that you need to meet certain zoning permits or another kind of regulation, but even then it is worth seriously considering what you need and how you could save money. It could be that you find a temporary space or even a shared space. Whatever you decide, just make sure you are aware of the utility costs associated. If money is going to be tight, then it is probably worth going down the home office or shared space route, just to relinquish some of the burdens on you.
