If you’re going through the process of starting a business as an entrepreneur, chances are you’re feeling a concoction of emotions. In all your excitement, it can be easy to underestimate the expenses for a startup. Unfortunately, if you fail to account for all the startup costs, you can find yourself in a cash crunch before your business even gets a chance to get going. Here is a budget checklist for entrepreneurs that will help you account for all the costs associated with starting a business.
1. Business Insurance
Of course, the goal is to launch a new business venture without encountering any major problems. However, in the off chance that a serious issue arises, you should have business insurance. A business insurance policy will help you cover unexpected expenses.
2. Fees and Licenses
One example of startup costs that entrepreneurs tend to overlook are the fees associated with setting up a business. For example, you need to pay to register your business name. Depending on the nature of your business and where it is located, you may need to apply for federal, state, and municipal permits or licenses. Of course, the requirements and costs will vary depending on a number of factors.
3. Utility Bills
Chances are, you studied the property values and commercial rents in your area when looking for the prime location for your new startup. However, you may not have considered the cost of monthly utility expenses. The operating expenses for your startup will include more than just the mortgage, the office rent, and the lease payment. The utility bills for your startup could include the following:
- Water
- Electricity
- Internet
- Heat and/or air conditioning
- Telephone
It is a good idea to talk to business owners in the area to get some estimates for the typical costs per square footage.
4. Professional Expertise
When you start a new business, you will need the professional expertise of lawyers and accountants. You can avoid or at least minimize expensive future tax or legal entanglements by getting advice from experienced professionals. You should seek advice regarding the legal agreements, financial issues, and structure of your business. If you need funding, you should reach out to business that offers unsecured business line of credit for startups.
To get a good idea of how much professional expertise will cost you, get two or three quotes. Don’t be afraid to shop around.
5. Payroll/Bookkeeping Fees
Chances are, you will need to add payroll/bookkeeping fees to your budget. Some businesses have an automated online system while other businesses hire a bookkeeper or virtual assistant to help them out. Bookkeepers tend to change anywhere from $20 to $50 an hour. For a startup, it may be more cost-effective for you subscribe to an automated online payroll and bookkeeping program or arrange a monthly flat-fee with a bookkeeper or virtual assistant.
Undoubtedly, it is a big risk to start a new business. To maximize your chances of success, you should be careful when creating the budget checklist for your startup. That way, your startup won’t tank the moment you encounter unexpected expenses.