Once you have decided to start your business, you will have a laundry list of things to do including costing everything out. Many new business owners tend to overlook many hidden costs but no worries, I’ve got you covered. Here are some you have to watch out for and take into account in your initial plan…
Branding will help create trust in your company, increase recognition, support advertising efforts, and inspire your crew to really feel they are part of the company. Consider hiring a branding expert who can take you through the entire process of defining who your customer is and how you are going to appeal to them. You will also want to invest in a graphic designer’s talents to create an unforgettable logo.
Starting a website can be an expensive endeavour. Are you starting from scratch? Spend the time finding a great website developer. Want to go with a pre-made format like WordPress? There is still a lot of coding involved there so best to get an expert on the case. The latter will be less expensive than a full build. You also need to consider the costs of buying your domain name and paying for hosting your website. There will also be monthly costs for internet and the various apps and software your company will require. Also keep a fund aside for website updates – you will want to tweak your website as you go when you see what works and what doesn’t or if you want to add pages or features.
Structure of Ownership
How you decide to set up your business can affect the costs. Sole Proprietorship Initial start-up costs are low. A Corporation has higher initial start- up costs, and more complex set-up procedures. Incorporating your business requires lawyers. I can help you through this process of deciding which structure works best for you and your type of business.
Depending on the type of business you are looking to open – insurance is strongly recommended. You may be in a rental property and your landlord could require property insurance. General liability will protect you in the event that you are sued – something that could sink a small business. Familiarize yourself with the different kinds of insurance available to you as a small business owner and then talk to a lawyer about what kind of insurance your business needs. The last thing is to shop around for the best insurance quote.
Permits and Licenses
Your business may require permits and licenses. They are often required at different levels – city ones, provincial ones and federal ones. You can find lists of what you will need according to your type of business easily online on the government sites. Make sure to budget time for this too as applying for and receiving permits can be a lengthy process.
No matter what kind of business you are starting up, you are going to need equipment. Whether you are working from a home office, brick and mortar shop or are on the road working from a vehicle. It’s important to know how much your equipment will cost. What will you need to purchase? What will you need to rent? Account for the additional equipment you will need down the road as your business grows. Will you need to factor in maintenance? Will your business require updated equipment as technology advances? What equipment will you need for staff?
Keeping Your Books
No matter what type of business you open – accurate bookkeeping is essential. I am a big believer that you can do your own books – there are a lot of advantages to this from keeping costs down and giving yourself the power to really understand your cash flow. I have trained many small business owners over the years on keeping their own books and I can help you learn how to do this too. If it is absolutely something you don’t want to take on, you will need to hire a great bookkeeper. Make sure you take into account the cost of accounting software. For cloud accounting (QBO, Xero) there is a monthly cost that you need to factor in. Also, you need add in monthly costs for any apps that you might use with the accounting software
Legal and accounting fees can get expensive, but they are crucial to your business. Your annual taxes will depend on your business structure. Unless you are a tax professional you will need to hire either a CA or CPA to do your business taxes. You may need a lawyer when starting your business depending on the type of business to help you through the various licensing and government registrations required. The paperwork can be daunting for the first time entrepreneur!
All of these things may sound expensive and they are but if you start your business off with a solid foundation, you can grow a successful one that will cover all of your initial costs hidden or otherwise.
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