As we’ve covered in the past, startups trying to evolve their brands into bigger organizations must first navigate a sea of expenses that can quickly sink them if they aren’t properly dealt with through a sensible budget early on.
With an intelligent approach to your business’ accounting practices, it’s possible to craft a financial plan that can absorb these potential setbacks with ease. Let’s go deeper into the possible fiscal pitfalls you might fall into through a careful examination of common startup expenses.
Whether you are braving the small business world alone or working with your initial team, you will inevitably need to take advantage of services whether it’s for interactions with clients or internal communication amongst your employees. You’ll need a company to host your website, another will charge you to maintain an email service, and if you use web developers, they will require licenses to development software.
These things usually make up comparatively small monthly or annual payments, but depending on the nature of your business’ needs, you may find yourself purchasing more of these services than you initially planned for.
Insurance can be a huge expense that gets overlooked by eager entrepreneurs convinced their innovative ideas will propel their bottom line beyond the needs of a conservative financial plan. With technology at the forefront of many new businesses, there’s now insurance to cover you if your code doesn’t work on a clients’ website.
There’s also protection plans offered to protect board members from outside lawsuits as well as life insurance for your most valued foundational team members. All of these can add up very fast if you don’t shop around for low rates and plans that fit your business specifically. Don’t be surprised if you end up with annual insurance bills well exceeding $10k.
Most firms budget their books for legal fees dealing with investments, corporate formation, and enterprise agreements with business partners, there are a set of “shadow expenses” that hide in the darkness waiting for those who attempt to build a consumer oriented company.
If you’re creating a brand name for yourself filled with logos, taglines, and visual media you want to protect from copycats trying to hijack your ideas, you will need to file for trademarks. This can quickly turn into a liability totaling thousands of dollars.
Depending on your particular brand, you might also consider snatching up domain extensions closely related to your brand just to make sure some shady company isn’t using a similar domain to operate their business elsewhere.
Making a payroll for the first time can turn into a surprise slap in the face for many entrepreneurs who take on a team no matter how small it is. This has become an expense ever since the government starting charging employers for employing people. Although taxes vary at the local level, be ready for salaries to exceed what you initially planned for before taxes.
If the work is full time and you’re looking for the best workers on the market, be ready to pay competitive prices for benefit packages, which acts as a major draw for potential employees.
If you’re in need of accounting assistance managing your business, consider outsourcing the work to receive the most effectively balanced budget possible. Contact us today.
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