When it comes to running your own business, one of the most important things you need to do is stay on top of your finances. Unfortunately, this is where a lot of people go wrong. One of the reasons for this is because their underestimate the cost of running a company. To help you out with this, read on to discover some of the most overlooked business expenses, which you need to take into account.
- Training – One financial error that a lot of business owners make is failing to account for the cost of training. Not only is it important to educate your employees for the sake of the productivity and growth of your business, but also it is critical for high employee retention rates. And, let’s not forget that holding onto your best talent will save you a lot of money in the long-run, so training really is a great investment, but you do need to account for it.
- Insurance – Failing to have the correct insurance in place could cost your business a fortune. In fact, it could spell the end of your company in some cases. The insurance policies you need depend on the type of business you run. Nonetheless, liability and property insurance are both musts irrespective of your company.
- Maintenance – You have probably calculated the cost of all of your equipment, but have you factored in the maintenance of this equipment? The machines and alike you buy aren’t going to function forever, so you do need to keep this in mind. It can be one of the most difficult costs to account for, as you never know when something is going to break or how much it is going to cost. Nonetheless, by attributing a small portion of your budget to this, you can make sure that you are prepared. It’s also a good idea to do some research in advance to discover a few great options for replacement equipment and repairs. This will give you an understanding of how much money you need to have in your emergency fund.
- Hospitality – It is likely that part of your business will involve meeting with potential clients. You are going to want to impress these potential clients, and so you will probably take them out for a meal in order to win them over. Meals cost money, so having a hospitality budget is important when putting together your financial plan.
- Advertising – Finally, we have advertising. Most business owners recognise that they will need to advertise, of course, but they do not account for all of the costs associated with this. Do you need to have a new website designed? Are you going to invest in search engine optimisation? Are you going to have business cards printed?
All in all, it is so important to ensure that your financial plan includes all of your costs. While this will make things appear more expensive, at least it will be accurate. This means you can manage your cash flow better and stay on top of all of your outgoings.