We as entrepreneurs believe we are in control of our own destiny, however, when it comes to running a business we still need to pay our start up expenses.
When creating a business plan we often overlook these costs in their financial projections. Even the savviest business owner might forget to invest in an area or two that is necessary for their small business to succeed such as necessary items like chairs and desk and what about paper. While we are trying our best to move to a paperless business model paper is still very prevalent in businesses today.
Don’t let these expenses catch you unawares.
1. EINS: When you register and EIN this allows you to establish a business bank account, and hire employees. The hidden cost is in the employee. Entrepreneurs often overlook the hidden cost of an employee the employers match to payroll taxes.
2. Office Equipment: Whether you are setting up a store front or in need of office space or working from home you still need equipment to operate your business.
a. Computers, tablets, laptops, cell phone (needs to be business cell phone to be deductable to the business as an expense)
b. Computer software, accounting software, being able to process payments to the business, and MS Office Suite.
c. Internet connection and WiFi connection routers, on sight backup or cloud hosting
d. Phones most people today use cell phones but phones need to be owned by the business to be a business expense
e. Like I said before as much as we try to be paperless in our business and we are getting closer but currently we still need printers, toners, ink and paper.
f. One piece of equipment I find most valuable is my scanner, as I can use it to convert paper documents to pdf files and not have to keep the paper. However, then it becomes important to have an offsite storage for these pdf documents in case something happens to your onsite computer system. Extremely important to business going paperless or trying to.
g. Other office equipment that you need to think about are business cards, pens, paper clips, staplers, hole punchers, stamps, notebooks (the paper kind), file folders, trash receptacles, file cabinets and recommended a shredder for sensitive documents. Depending on the size of your office might be a good idea to have an outsourced document shredder provider. Make sure they are proper licensed and know the correct procedures for shredding of your materials and get a document from them that the shredding has been done according to properly.
h. If you have an office or a storefront when I think of storefront I think of a retail location that deals directly with the public. If you do then you might have to think about a break room area for employees so that means things like having a coffee maker, coffee cups, a small refrigerator, clocks, fire extinguishers, first aid kits, cleaning supplies, and again a table and chairs.
3. Internet and Phone providers: While there might be one or two to choose from in your area if you are in business you will need a high speed internet provider that is reliable. I know that I have my cell phones, however, I also have a VOIP phone system in my office. I am not always in a position to answer my cell phone and I like having a different phone number for my business also just my preference.
4. Do you need a license and/or permits to operate your business? You will need to check with your local authorities to find out if a license or permits are required for you to operate your business.
5. Business Entities: Depending on what type of entity you are going to setup the cost can vary greatly from establishing a DBA, a partnership, an LLC, S-Corp, or C-Corp all states have different costs for each so decide what it the best entity for your to protect your personal assets. Most likely you will have to hire an attorney or should to setup a partnership, an LLC, a S-Corp or a C-Corp and a CPA to give guidance on taxes associated with each of these entities.
As you can see there are many costs most entrepreneurs might over look when starting or even expanding their businesses. B Meyer Bookkeeping Solutions would be happy to help you in any way we can or send you to reliable sources to assist you in your business success. Please give us a call at 281.240.0326 or email at firstname.lastname@example.org , visit our website at www.bmeyerbookkeeping.com and fill out our contact us form and we would be happy to get back in touch with you.