What Are the Most Important Financial Costs for Your Business?
When you’re starting up your own business, there’s going to be a lot of extra responsibilities.
Some of them you might not even have been aware of until now. But you’re standing on your own two feet now, and you need to get serious. You’re going to face a lot of financial pressure now as you’ll be covering the costs of everything yourself.
Here are nine of the most important financial costs for your business. There are bound to be others, but these are the ones you need to be sure you account for in your budget.
1 – Staff
One of the biggest costs you’re going to incur is the cost of your staff. This will include wages and tax. Staff are a vital part of the business, so you’re going to need to have some, that’s unavoidable. But, you can cut down on your costs quite a bit by limiting yourself to a small body of staff. This way you keep the team a little closer and tighter, and you shed the cost of someone else’s wages. Another great way to help cut costs is to outsource work to freelancers. This will be cheaper and more efficient than hiring someone else.
2 – Premises
You’re going to need a base of operations like an office or something. Whatever the premises is you’re going to have to incur a cost for it. You’ll need to pay rent for the building you’re using while you’re there. You might be able to negotiate a reduced rate of rent with the owner. But it’s still likely you’re going to have to pay rent of some kind. Bear in mind that an office may be essential for your business, so you’re going to have to budget for the rental costs. This will be one of your biggest costs, if not the biggest.
3 – Stock
You will find when you first start up your business that you’re going to need to spend a lot of money on the stock. You need supplies, and you need to prepare yourself for big order volumes. The worst thing for a new business is having orders they can’t fulfill. You need to bulk order as much stock as you can when you first start out. It you stockpile you won’t be in danger of running out. This is going to set you back quite a bit of money, but it will be worth it for the future of your business.
4 – Car
A car is an important asset for your business. It allows you to get to different places all in a short timeframe. It means you can leave the office, attend meetings, and pick up or deliver stock. Another big advantage is that it saves you from having to use public transport, an experience that can prove stressful. You may not be able to afford to buy a car outright. But if you look in the Listers lease section you’ll find plenty of options for business leasing and contract hire. This is a cost effective way to secure a car or several, for your business.
5 – Materials
When you’re calculating the financial costs of your business, you’ll need to account for the cost of raw materials. This is going to cover any equipment or necessities that will be used within the business on a daily basis. So things like paper, pens and other kinds of stationery. It will also include things like tables and chairs, phones and printers. Anything that you’re going to need within the premises that will assist in the daily running of the business. These may not be huge costs compared with a lot of other things. But they are necessary and important costs for the business.
6 – Marketing
You need to make sure that you have a brilliant marketing strategy for your business. The whole point of a business is to make a profit. The way you do this is through building up a pool of clients and customers. And the way to do this is through effective marketing and advertising. Now these days you can do a lot of marketing for free via social networking sites and online blog posts. And these are important opportunities that you need to grab with both hands. But you should also spend some money to market your brand. Think about hiring a team of marketing experts and strategists to help drive your business. You might also think about outbound marketing concepts like advertising via TV and newspapers. These will cost money, but they’re worth it because the end game is to attract clients, and that makes money.
7 – IT
An important cost in the running of any modern business is the IT costs. This will be for materials like computers, printers, etc. But it will also be to cover an IT support team. Your business will not be able to survive without the use of IT. Everything is digital these days, and you’re going to have to embrace that if you haven’t already. IT costs should be one of the highest priorities in your budget. You need to have the right kind of IT network linked to your business to make sure it runs effectively. And you’re going to need to pay for an IT support team to protect and update your IT system.
8 – Security
Depending on the sort of business you run it might be a good idea to shell out for security. This can cover a lot of avenues. If you run a store, you should think about employing a security guard to protect against potential theft or violence. If you run a business dealing with sensitive information, you’ll need to take another approach. You can get security doors, and alarm systems fitted. Then you’ll want to think about digital security methods. These are the kind of firewalls and data protection software packages you’ll have on your computer. These are necessary to add an extra line of defence to your digital and virtual database.
9 – Insurance
Whatever your business is you’ll want to be thinking about insurance costs at some stage. This is an important cost because it protects your business assets. You need protection against damage, loss or theft of stuff. Insurance premiums put measures in place to replace or reimburse you in the event of anything like this happening. Insurance will also protect you and the staff if any of them should have accidents or injuries while at work. Make sure you don’t forget insurance when you’re budgeting your business expenditure.
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