Did you know that almost 20 percent of new businesses fail within the first two years of opening? Many factors play into this, including wrong audience, wrong product or service, or even plain old bad luck.
However, one of the main reasons for this is simply because these new businesses don’t have any more money. Startup businesses have tons of unexpected costs and fees associated with it that can bankrupt new companies before they even get lifted off the ground.
Here are the 8 unexpected startup costs that you need to watch out for.
1. Market Research
In order to know that you are selling the right product or service, or even targeting the right audience, you need to do market research. This isn’t cheap and can be pretty costly if you are starting from scratch.
2. Business Consultations
If you want to tap into even expertise, you will have to pay a business consultant to provide it. This can be pricey. You can seek more budget-friendly alternatives like from Cassmerward.com.
3. Administrative Expenses
You can’t have a business without computers, internet, office equipment, and more – the list goes on. Administrative equipment that keeps operations flowing smoothly can quickly add up.
4. Hiring Staff
You can only run a startup so long on your own. Eventually, in order to expand, you will have to hire new employees. It’s not even the employee salary that is a cost you have to factor in. Taking the time out of your workday to find talent, interview them, and train them can take valuable time away from running your business.
5. Insurance Costs
Most businesses need insurance, especially if you are dealing with customers in person. You most likely will need to get insurance, including workers’ compensation and general liability insurance to name a few. These premiums can be expensive.
6. Employee Benefits
Forget the employee salary. You must also pay for things like health insurance, 401K matches, and more types of benefits for your employees if you want to remain competitive for top talent.
7. Taxes and Accountants
Once you start making money in your startup, you will need to think about taxes. Taxes on new businesses can sometimes be high, especially if you are making a lot of profits. You need to make sure that you budget for taxes, otherwise you get hit with a huge tax bill.
Hiring an accountant makes sure you don’t, but hiring a good one can put a dent in your bank account if you aren’t prepared.
8. Permits and Trademarks
Trademarking your intellectual property can protect the longevity of your startup, but can cost a pretty penny. This is especially true if you have a lot to trademark.
Want to Learn More About Startup Costs?
Knowing these unexpected startup costs can help prevent your new business from crashing and burning. Familiarize yourself with these startup expenses and you can be rest assured that your business might have a fighting chance to succeed.
If you want to learn more about startup budgeting and costs, be sure to follow along for more articles.