It does not matter what type of business you operate, one thing that you need to get right is your finances. A lot of businesses make the mistake of overlooking certain expenses when putting together their budget. They are then surprised to have less money than they expected, and this is how cash flow problems manifest. With that in mind, read on to discover some of the most commonly overlooked costs of running a business…
Opportunities – Let’s start with a positive: taking advantage of any opportunities that present themselves. After all, not all business expenses are negative. One of the biggest costs you will ever have is making the most of opportunities that come your way. However, the aim of this is to make money in the long run, so it will turn out to be profit, yet you still need to have the cash available to capitalize on this.
Machinery repairs and replacements – It is likely that you have accounted for the cost of purchasing the tools, equipment and machinery you need to run your business, but have you thought about the expenses should they malfunction? This could be something as small as buying a part like compression springs for one of your machines, or it could be something as substantial as replacing equipment altogether. Either way, you need to make sure you have the cash reserves for a situation like this.
Trademarking – Trademarking is a lengthy process, and it will cost a good chunk of money to apply to trademark your business in one category. You then have the expense of any additional categories you want to apply for. The easy solution to this may be to skip trademarking altogether. However, you may have an even larger expense on your hands once your business starts to gain traction and produce revenue, so you really need to think about what is going to be right for your business overall – not just the here and now.
Time – Time is an overlooked expense because it is incredibly difficult to quantify. Nevertheless, if you are not running your business as efficiently as possible, then you are definitely going to be leaking money. After all, time wasted equates to money lost, so you need to make sure that all of your resources are being put to best use and that there are high levels of productivity and efficiency within the workplace.
Taxes – Last but not least, effective tax planning is a necessity if your budget is to be accurate. If you do not calculate your taxes, you are going to find yourself in a state of panic once the time comes to prepare your annual returns. It is also vital to ensure you choose to set up your business as the correct entity for your situation, as well as taking advantage of any tax breaks that are available to you.
So there you have it: a look at some of the most commonly overlooked expenses when running a business. Not all costs are bad – for example, making the most of opportunities – however, you do need to account for all of this if you are to run your business effectively.