Running a business isn’t cheap to say the least. You may feel as though you are constantly trying to stay on top of your expenses and that sometimes, you can’t keep track of everything. If this sounds like you then it’s important that you budget, and that you take a good, long look at your finances.
Wages
If you don’t have a team of employees, then your business won’t last very long. If you’re just starting out, then you have to decide who is going to be on your team and the responsibilities they are going to have. There are so many employment indexes out there that you can use to try and find out the average salary too. This will help you to ensure that you don’t pay your team too much, or too little. It will also help to budget much more efficiently. If you’re not quite sure if you need a full business team, then why not consider hiring an independent contractor instead? They are way more affordable, especially if you use timesheet software to keep track of them, and they can also offer skills that compliment your business just as well.
Rent
Your next biggest predictable expense will be your rent- or mortgage. If you have purchased a building, this will mean that you end up paying a mortgage payment and then property taxes. If you’re renting on the other hand, there’s a high chance that you’ll end up paying a flat rate. If you have a small business, you can still expect to pay out a couple of thousand and this can get out of control very quickly if you’re not careful. If you want to help yourself here, you need to try and keep your space small and you also need to stay away from areas that are highly populated too.
Equipment
There’s a high chance that your business needs equipment. It doesn’t matter whether you need manufacturing equipment or whether you just need standard office equipment because either way, it costs money and you have to make sure that you budget as much as possible. One way for you to do this would be to buy used instead of buying new. You can also visit auctions, to see if you can get a way better deal.
Utilities and Office Supplies
The ongoing cost of keeping a business open can really eat into your budget. For this reason, you’ll need to plan for things like water, internet, electricity and even gas. Pens and paper will also eat into your budget too, so this is something that you need to keep in mind. If you want to reduce the cost of your expenses, then it helps to go green. Consider using less paper and transition to a cloud system, instead. You might also want to state that all equipment needs to be turned off when it’s not in use too, as this will help you to make the most out of your budget. If you want to take things to that next level, it may be worth trying to reduce business costs with low energy lighting. This will make your business more energy-efficient and it will also make budgeting for energy and utility costs way easier.
Theft
You need to consider the fact that your office might be vulnerable to criminals. Cyber-attacks can happen at any time and you only need to have one compromised password in order to open your business up to criminal activity. If you want to stop this from happening, it helps to set a password strength regulation. Chat with your team about the importance of security and also host meetings so you and your team can come up with ways to make your business more secure.
Other Related Losses
You also need to take into account natural disasters, changes in your income and even lawsuits too. At the end of the day, there are types of business insurance available for you to choose from and when you do adopt a policy, you will soon find that you can protect your business from a huge range of threats. This can include fire, criminal activity or even downtime.
Professional Fees
As an entrepreneur, you might like the idea of trying to handle absolutely everything yourself. If you do this however, you may be doing yourself more harm than good. You may end up getting in trouble with your taxes or you may find that you can’t get the advice you need regarding a legal situation. To lower the cost of your legal fees, consider hiring individual contractors to help you through any difficult situations.
