Regardless of what anyone tells you, don’t believe them when they said running a business is cheap and easy. It’s not. Even the most successful businessmen will tell you that managing a successful business is hard work. You have to commit to it, and you have to be ready to sacrifice your personal times and even money. So, what are the things you have to watch out for?
It might be surprising for you to know that gypsies and travelers are occupying the land which you inherited from your grandmother. You have plans for that land. You were thinking of selling it or renting it out to raise capital, or even starting your business there. Having travelers camping in your land is not a problem, but it is an added expense. You have to call a traveler eviction company to handle this predicament for you. This is just one example of an unexpected cost related to starting and managing a business.
What more are there? Lots more. Whether it’s preparing the inventory, paying the accountant, and launching a website, starting your own business is no small feat. Hopefully, your pockets are ready for what it will cost you to get a business idea off the ground.
So you have a great business idea. The problem is you don’t know if there is a market for it. You wanted to hire a market research firm but found out it was too expensive. You began researching on your own. But even if you do it alone, you are still going to spend an insane amount of time and maybe even money to get to the results your business needs. You have to make phone calls and create email surveys. On top of that, you need someone to interpret the statistics and big data.
You should not build your business as a sole proprietorship because you are putting your personal finances at risk. The best business entity is an LLC (limited liability company) or a C Corp (traditional corporation). These two entities will protect your personal money from any liabilities that the business might face in the future. The only difference between the two is a C Corp allows the company to issue stocks.
Hiring a lawyer to incorporate a business will cost between $500 and $1,000. You need a lawyer for the incorporation papers. Filing the papers will cost a few thousand dollars, too.
Sometimes, budding entrepreneurs are so focused on the business capital for purchasing inventory that they forget they need one more thing to protect their businesses: insurance. There are at least five types of business insurance you should check out. For starters, you can get the general liability insurance, medical insurance, add worker’s compensation insurance.
The general liability insurance is for the protection of your business from disasters, theft, slip and fall, and many more. A medical insurance is for your employees. The worker’s compensation insurance falls under the same category. In the future, you can get a commercial vehicle insurance and professional liability insurance.
If you want to stay long in the business, you have to constantly improve your products. This usually involves a team that will design and manufacture the products while taking into account customer feedback. You also have to spend on the packaging of the products. The packaging may be the least of your worries, but it’s also an expensive element of a successful product line.
You thought about the taxes, haven’t you? But how about the cost of an accountant? You can do this yourself, but it is extremely difficult to navigate the complex tax system. You’re better off hiring someone who understands how to do it. It’ll save on a lot of headaches and also prevent the possibility of getting entangled in a tax fraud case.
Do you have a unique product? Can you trademark it? A federal trademark registration has many benefits, but the fees are a little costly, too. You need to pay for a trademark lawyer and the application fees. The latest figures from the US Patent and Trademark Office said that applying to trademark a business in one category will cost $400. You have to pay $300 for every additional category after that.
Launching a business is so exciting that you may overlook some of these things. List down all the expenses your business will incur because neglecting to do so can force your business to the ground. Take time to consult with people who also launched their own businesses, so you can learn from their good and bad practices.