Over 600,00 small businesses are started in the United States each year. Making the leap from running a business part-time to making it your primary source of income can be stressful. The key to being successful with your new venture is making an adequate plan to follow.
One of the main concerns you should have when starting a new business is creating a budget. In order to create a comprehensive budget, you need to know what type of expenses to expect.
The following are some of the most important costs you will need to add to your startup business budget.
1. Purchasing the Right Equipment
Regardless of what type of business you are starting, having the right equipment in place is essential for success. Equipment costs can vary wildly based on the products or services your business provides. Failing to put the right equipment in place will lead to your new venture struggling to stay afloat.
If you want to save a few dollars on equipment costs, think about buying used. Trying to buy a piece of equipment without getting a firsthand look at it is a horrible idea. With a thorough inspection, you can get a feel for whether or not the equipment in question is worth the money.
2. Don’t Forget About Monthly Energy Costs
Whether you are running a business out of your home or from an actual office space, monthly energy bills are something you have to pay. If you are using a commercial building as your base of operation, then searching for the best energy rates is vital. Using a website like energybot.com can help you find the best rate on the energy you need to power your business.
Newcomers to the world of business owners fail to realize just how many power companies are available to them. These power companies work hard to undercut each other, which can work to your benefit. While finding the best energy rate will be time-consuming, it is worth the effort invested.
3. Some Businesses Need Inventory
Does your new business supply goods to the general public? If you are running an online store or a brick and mortar retail establishment, getting the right amount of inventory is a must. The last thing you want is for people to order things from your online store that you don’t have. Often time, inventory costs can be up to 25 percent of a company’s budget.
Not only will have to worry about inventory costs, you will also have to factor in the cost of shipping these items to consumers. If you have already established a demand for the products you are selling, taking out a loan to increase your inventory levels is a good idea. By doing this, you can avoid worrying about running out of popular items.
4. Online Marketing Costs
If you are starting a business in a highly competitive industry, finding a way to attract attention from consumers can be difficult. One of the best ways to accomplish this task is by using the power of online marketing. Creating an informative website and optimizing it for search engine success is a hard job.
This is why you need to allocate money in your budget to hire professionals to help with this marketing. Attempting to handle this work on your own is a bad idea due to your lack of experience. With the assistance of an experienced marketing company, rising to the top of Google will be much easier.
5. Growing Your Team
While you may be able to handle all of the work involved in running your business at first, as it grows this will become difficult. Instead of losing money due to a lack of help, you need to hire a few employees. Budgeting for salaries and taxes for these employees is crucial. If you are confused about how to do payroll and taxes for your team, hiring an accountant is your best course of action.
It Takes Money to Make Money
Being frugal can be beneficial for a new business owner. However, cutting corners on essential expenses can hurt you. Creating a comprehensive budget can keep you on the straight and narrow financially speaking.
