Many businesses especially startups and small enterprises due to their excitement and overconfidence are often caught unaware on some of the most unexpected costs yet essential expenditures in starting and operating businesses. If you are an entrepreneur who wanted a hassle free and smooth sailing operations, these costs should be well placed and taken cared for especially during the onset and building up your enterprise. Many businesses tend to focus most on the product or services that the enterprise is going to offer and how to grow and penetrate the market productively. But before you can hit your dream target get to the top to open the Pandora’s Box so wanted by many in the industry. There are costs that many businesses have missed and often taken for granted. Costs that are essential to make every business start on the right track. As a rule of thumb for most startups, setting aside a budget of at least 20% of your projected revenue might act as a protective cushion to cover these costs. Take a look and carefully consider them for they are truly essential for the business operations to go further and take your business to the next level.
Insurance. Risks are given aspects in our everyday lives and businesses likewise are not spared. A significant part and example of these risks is the so-called ‘public liability’ which covers your business the risk from being sued by any public person or entity while your business operates.
Business permits, taxes & licenses. A must for every business yet many startups and small businesses have skipped in the planning stage and early periods of operations. Due to the excitement and eagerness by some entrepreneurs to open up and start their business operation, their focus on the hassles of securing proper business permits, licenses and other government mandatories must have slipped unto their minds. But paper and paperworks must be done on the onset and better before the start of the business operation.
Professional Fees. These are professional fees necessary during the setting up of your business. Legal fees to cover business incorporation as well as accounting consultancy fees for setting up and initial planning of the business. These professionals might prove to be beneficial especially on tasks not within your capacity, too difficult and often time consuming.
Industry Association Dues. Joining trade associations especially for startups and small time businesses not only gives your business some perks enjoyed by members of the industry. Building your empire means associating and meeting up a lot of members in the industry that can pave way in opening potential opportunities to play it big in the industry. Learning and gaining all the facets of the business through the techniques and trading knowledge from other members of the business industry to which your business belong with will help make your product or service penetrate largely into the market and gain positive productivity.
Product Shrinkages & Pilferage. Unless the product you cater are shrink-free, irreplaceable and need not be replenished, entrepreneurs should earmarked value of goods for replacement or repair the stocks and inventories as well as pilferages and product downsize.
Repairs & Maintenance. While it may be true that you have invested your business with an all new materials and properties. The fact remain that these business tangible assets will be subject to wear and tear as well as depletion. Thus, a value must be set aside to answer at least to maintain and repair the business assets and properties.
Contingencies & Emergencies. Forces of nature and other unexpected business disasters may come. Setting aside a value on the feasible or sound cost of incidences like fire, calamities and other natural disasters could not only save human lives but the life of the business as well. There could be appropriate insurance packages to settle them but it is every entrepreneur’s wise move if a fund will be set aside for such purpose to avoid seeking out funds by loans or borrowing which could only add up to the liabilities of the company. The rule of thumb is not to expect their occurrence but plan and set aside a fund to handle emergencies without disrupting the normal operation of the business.
Social Mandatories. One of the most overlooked and have been the subject of many issues due to controversies are the so-called social charges which consists of the employees’ social securities, taxes and employee benefits. It was the law of every land that workers and employees must be accorded with and set aside expenses to cover their social security, health or welfare fees. It is a fact that businesses thrive and operate not only due to the product or services they offer but primarily because workers and employees delivering these products and services to the public and the consumer.
Employee Turnover. Ideally most entrepreneurs will seek and hire a roster of employees that would most likely stay as long as the business operates. But nothing really lasts forever. And just like the company’s tangible assets, its employees can also be expected to come and go due to a variety of valid reasons. Thus, entrepreneurs must see to it that its human resource team must be well equipped with able personnel or in-charge to augment lacking workforce to avoid disruption of the business operation.
Technology. Every enterprise must be aware that to be able to thrive and compete with other business enterprise. Necessary upgrading with the current trends not only for technological advancement but most of all as a means to efficiently perform business functions and operations.