By Ryan Velez
Most business owners expect to put up a little of their own money, or get help from generous investors, in order to get their companies off the ground. However, there are costs beyond the obvious stuff like paying your first set of employees, or your starter equipment. The Network Journal points out several expenses that may catch you by surprise.
For example, you may pay health insurance and car insurance, but what about business insurance? This protects you, your money, and assets from lawsuits and financial liabilities. Granted, how much you pay will vary based on your industry, coverage, and the assets in question you are trying to protect. One company reports that small-business owners pay an average of $741 annually for general liability insurance.
Another surprising financial barrier to entry may be licenses and permits that you need to pay to get. For example, you might need to pay a license fee to your local government to build or renovate your business property. Depending on your industry, you might also need to file for a local or state business license. Many people incorporate their companies as an LLC as well to get further legal protection for their business, but this isn’t free. Julie Pukas, head of U.S. bankcard and merchant solutions at TD Bank, offered advice about how to combat the influx of startup fees. “Plan ahead, and keep reserves — either cash or credit — available for emergencies,” she says. “In many cases, this is where a business credit card is especially useful. It can provide some financial support for unexpected costs.”
One thing to note when it comes to running your own business is that you may think you can do it all, but you can’t. A 2017 survey of small-business owners from TD Bank found that more than 65 percent of business owners are confident in every aspect of business management — from handling the finances to marketing and advertising. However, just like delegation is important inside your business, you need to know when you should look outward. For example, you may want to invest in getting a lawyer to make sure your business has the right legal backing, or get an accountant to be ready for tax season. This may come at a cost, but for many people, it’s money well-spent.