You are finally ready to start a business. You’ve got all the paperwork finished, saved the deposit and a few months'' rent for the retail space, or you may have even bought the property outright. Still there are costs you need to factor into your budget that are above the property rent or purchase costs. While most people assume these are inconsequential, the combination of these can add up to a substantial amount. The following are 5 considerations you should analyze before setting up your business.
Consider property tax if you have purchased the business property. These need to be paid every year at the beginning of the year and can be substantial, especially if you don’t factor them into your operating budget. Check with your state for first-time business property owner discount, as some offer new business property discounts. In most cases, you won''t need to pay property taxes until the beginning of the following year. Even so, for a new business this can be an unforeseen expense, one that could eat into operational expenses.
Be sure to factor in all legal fees for setting up your business. Consulting with an attorney can be beneficial as it will clear up any issues or doubts you have with purchase agreements, rental contracts, insurance terms and more. You will have documents involving the setup of an LLC or other business entity, and you may also have legal expenses dealing with the rental agreement or purchase contract for your retail location. You should factor in an additional $2,000 to $3,000 for legal consultation.
Whether you rent or own you will need some type of business insurance to cover you for loss. Premiums will vary depending on whether you own or lease the property and the value of the property contents you buy the insurance for. Check with insurance providers before starting your business so you can factor in these expenses.
Often new businesses budget for every expense but the very minor ones, which can become major issues if they are not factored into the business setup plan. For instance, moving costs can be substantial, often eating into a $1,000 or $2,000 of your operating budget. Even if you plan on moving by yourself, you can still expect a cost of a few hundred dollars.
Connection of Utilities
This can be the most overlooked item, and one many business owners don’t factor into their initial budget. You will need to connect electricity, gas, phone and the Internet. These costs can add up to several hundred dollars, according to Texaselectricityproviders.com, especially if you need to place deposit amounts with each company. Even without initial deposits, connection fees usually apply and these can run at least $100 per each service provider.
To avoid problems and falling into budget shortages you need to analyze all the facets of starting your business, including these costs which at first may seem inconsequential but eventually add up. Write all of these costs down, call companies and get quotes. Shop around for better options and cost saving options.