Running a business comes with a long, arduous laundry list of responsibilities and expenses that many starry-eyed, hopeful entrepreneurs simply don’t know about or don’t consider when they first start out. In most cases, these expenses can be insurmountable enough to make or break a small business within its first year of operations. The cost of simply running a business along with all of the overhead expenses that come with it can be unmanageable and overwhelming for some entrepreneurs. As long as you’ve got a good head on your shoulders, strong determination, and a stringent financial plan to help you get through all of the hurdles involved in owning and operating a business, then you should be able to succeed. Renting an office space is a good place to start, but there are numerous other hidden expenses that entrepreneurs usually only find out about through experience. Continue reading to learn more.
Hidden Costs of Running a Business
Unless you have an excellent financial or business advisor working alongside you as you start your new business venture, it’s very likely that you’ll face a great deal of financial obstacles for which you’re probably unprepared. Here are just some of the hidden costs and fees that are involved in running a business.
1. Advertising and Marketing Fees
From paid Google ads to print ads in the newspapers and everything in between, the fact is that advertising costs money. In order to get your business and brand name out there, you need to allocate sufficient funds towards marketing materials. Product and service promotions should also be included in these costs.
2. Hiring and Retaining Employees
Established businesses can save money by hiring high-quality employees and doing everything they can to retain them. After all, it costs much less money to retain good employees rather than constantly replacing them. For small businesses that are still in their infancy, however, you need to take the cost of posting job opportunities, conducting interviews, and hiring new candidates into account. All of this requires spending a great deal of time, money, and resources to find the right recruits for your business.
3. Benefits, Union Dues, Training, and Amenities
Before you start hiring employees, you need to secure an affordable and comprehensive insurance plan for your company. Employee benefits should include dental, health, and vision care. But, aside from that, the cost of hiring employees also means you need to take the cost of training them into account as well as union dues and additional amenities (i.e. a break room, kitchenette, providing snacks, etc.).
4. Office Space Rental Fees
Depending on the size of your business, you might also want to consider renting an office space instead of purchasing one. While small start-ups can survive their first few months with employees working out of home offices, eventually you might want to move on to a bigger space that accommodates your growing needs as a business. Renting an office space is the perfect solution to this problem because most office space rentals are typically centrally located in urban areas. This makes it easy for your employees to commute via public transit, driving, or through a ride share program if need be. Office space rental suites are also typically located within professional business centres, which means you’ll be surrounded by hard working entrepreneurs just like yourself. However, it’s important to make sure you’re prepared to incur the cost of renting an office space and work out a feasible deal with the rental company.
5. Office Equipment and Renter’s Fees
Some office space rental companies might include the cost of office equipment such as printers, telephones, desks, chairs, and fax machines in the cost of your agreement. Others might charge additional fees for these things. It’s important to iron out these details before you sign on the dotted line and find out if there are additional renter’s fees you need to factor into your spending. Shopping around from one company to another will help you gain a clear understanding of the types of office space rental agreements that work best for your company.
6. Manufacturing and Distribution Costs
If your business model is predicated on supplying and selling certain types of products, then you also need to take the cost of manufacturing and distribution into account as well. First, there’s the cost of renting or purchasing a manufacturing facility and then there’s the cost of actually making the products you’re hoping to sell. Most businesses tend to lose money in the first few years until they can establish a strong hold on their respective markets. In fact, this is something you should expect to happen and prepare for it. You will inevitably suffer some losses in the beginning if your business requires manufacturing products. However, you should be able to recover some of those losses and break even before you start making money a few years into your business venture. In this case, patience is a major virtue but so is proper planning and preparation.
7. Business Tax Deductibles
When it comes to legitimate business expenses, always keep the receipts! They’ll come in handy during tax season when you need to provide physical evidence of your business deductibles. Personal expenses can’t be deducted from your business tax deductibles. Attempting to do this is considered tax fraud and if the CRA so much as suspects you of doing it, your business faces thorough auditing, which is a minimum seven year-long process.
Services IPO Provides to Help Lower Business Expenses
Innovative Professional Offices is one of the leading office space providers in Canada with state-of-the-art fully furnished offices located in Ottawa and Mississauga. We offer comprehensive rental packages to businesses of all sizes that include a wide range of features and amenities. These include Wi-Fi access, telephone answering, receptionist services, IT support, training rooms, meeting rooms, high-end office equipment, shared office space, daily/hourly/weekly/monthly rentals, and virtual office rentals. To learn more about how we can help your business save money, please contact us today!