Fernando Fischmann

Entrepreneurs: Don’t Overlook These 12 Common Startup Costs

3 October, 2019 / Articles

Starting a new business is exciting and full of possibility—and it can be downright terrifying. That’s why, when an individual begins an entrepreneurial journey, smart financial planning should be regarded as one of the most important milestones on the road to success.

While some first-time entrepreneurs may believe they have it all figured out when it comes to the finances for their new business, they may have overlooked a few key expenses. Below, 12 Forbes Finance Council members share one common startup cost that’s often overlooked by first-time entrepreneurs and why it’s important to add it to your financial plan.

1. Training

Many startups ignore training resources, whether they be functional (e.g. sales) or internal (e.g. culture, policies, etc). This is because the early employees are all used to working around the same table and sharing ideas. As a startup scales, not everyone can be at the table, and therefore information needs to be shared in a more organized way. Hire a trainer once you hit 20 people. – Jason LeeDailyPay

2. Professional Consulting

Professional consulting costs are often overlooked by many first-time entrepreneurs. Be conscious of the type of expert services you are unfamiliar with but that are required to set up your business. These services often include tax accounting, legal assistance, financial guidance and financial planning. Acquire estimated quotes for these services and include these expenses as part of your startup cost. – Geanette Rodriguez-Ojeda

3. Time

Entrepreneurs tend to think goals will be achieved faster than they ultimately will. Businesses, especially startups, encounter all sorts of delays and roadblocks, and as any unprofitable startup knows, time is money. You need to plan on things taking longer than you think, costing more and taking longer to actualize. Otherwise, any roadblock can put the entire company in jeopardy. – Carlo CiscoSELECT

4. Payroll Taxes

Not remembering to plan and budget for payroll taxes can lead to an unpleasant surprise at the end of the year. The exact amount will, of course, depend on the size (dollars) of your payroll and the state(s) where your business operations exist. Hiring a good third-party payroll processor can help you avoid surprises, as they will often account for these taxes through their system. – Rohit BassiCorridor Capital

5. Bookkeeping

Don’t overlook the cost of managing income and expenses or producing financial statements. Some startups forget about the cost of having a bookkeeper and the cost of the financial software. Using spreadsheets to track everything may be easy at first, but as your business grows you need to move to paid software that is built for small businesses, like Quickbooks. – David GassAnderson Business Advisors, LLC

6. Annual Taxes

A common startup cost that is overlooked and often complicated is taxes. Annual taxes depend on business structure, profits and dividends. Additionally, C corporation founders are required to prepay first-year tax fees. – Elle KaplanLexION Capital

7. Marketing

Entrepreneurs often overlook the importance of marketing. The sheer amount of money it’s going to take to market a new product or service can seem daunting; thus it’s avoided or underfunded. Startups could easily allocate 100% to 200% of the revenue to marketing in the early years, reinvesting money back in the business. – Justin GoodbreadHeritage Investors

8. Business Insurance

Business insurance costs more than a startup might have originally anticipated, especially when you start hiring employees. The amount of added liability when a business begins to hire employees is often overlooked. A business will need to add medical insurance and workers’ compensation insurance to the list, along with general liability insurance and professional liability insurance. – Jared WeitzUnited Capital Source Inc.

9. One-Time Expenses

A cost that’s often overlooked is the “one-time expense.” This could come in many forms: domain purchases, trademarks, permits, licenses and dues. When it comes to a startup or any new small business, you have to buy these registrations and sometimes pay for them annually. While these costs may not seem like much, they do add up. And every penny counts when you are just starting out. – Greg HerleanHorizon Trust

10. Customer Acquisition

Time is the greatest disruptor. Startups must understand total customer acquisition costs (“Total CAC”)—that includes lead time to acquire. How long was the time between the first day of prospecting and the last day of closing a customer, and what was the cost of “staying alive”? Just as important, can Total CAC be decreased by 20% per X number of customers? That kind of thinking will help startups win. – Franklin TsungBlackCrown Inc.

11. Equipment

The extent of equipment costs is often a surprise for many new business owners. Equipment is something literally every business needs, so it’s critical that you set aside capital for it. In the event that you don’t have sufficient funding for necessary equipment, there is equipment financing, which is offered by both banks and private lenders. – Gregory KeleshianCrestmont Capital LLC

12. Transactional Fees

Many startups fail to account for transaction fees. Every time you run payroll, accept a credit card or add a piece of software, there are costs for these services that add up as your business grows. Since these fees are unavoidable, there is only one answer to this issue: Ensure each vendor that provides these services creates the most value for your business through its services and products. – Paul HadfieldHadfield Group

The science man and innovator, Fernando Fischmann, founder of Crystal Lagoons, recommends this article.



Te puede interesar