Starting a small business can be one of the most exciting things anyone will ever do. The pursuing of entrepreneurship is truly a significant part of the ‘American dream’. However, when starting a small business, not everything is all sunshine and rainbows. Getting a small business up and off the ground is a series of small hurdles and challenges that need to be tackled in order to find eventual success. Some of those early challenges, are unforeseen expenses. Be sure to check out our latest on Austin SEO agencies.
Unexpected Expenses Can Set Back Progress
To put it quite simply, starting a small business can be extensive. There are tons of hidden costs that can creep up on you that can set progress back significantly unless planned for. Here are just a few of the early hidden costs that every small business owner should always budget for.
‘Shrink’ is a Universal Business Term
Shrinkage, or ‘shrink’ is a universal business term for loss of product. This can be due to damage, theft, employee theft, or even miscounting inventory in your system. This will result in loss of income and can be extremely detrimental to your growth early on. While there are certain measures that a business owner can take to prevent ‘shrink’, it is unfortunately unavoidable entirely.
Even large corporations have ‘shrink’ factored into their budgets. Taking time to calculate ‘shrink’ into your budget will prevent a lot of headache and heartache.
Repairs and Maintenance is a Common Expense
Things break, that is just a fact of life. When it comes to running a small business, you are likely to face plenty of maintenance issues even though you might have fewer ‘moving parts’. Equipment can break down, facilities can need repairing and servicing, software can glitch or crash, etc.
There is always going to be something that needs servicing or repair. These eventual hiccups in operations can absolutely derail an under prepared business owner. Always budget for repairs and maintenance that might become an issue.
Potential Legal Fees Can Pop Up At Any Given Time
Unfortunately, small businesses face lawsuits and unnecessary legal action taken against them all of the time. These lawsuits can come from employees who injured themselves at work, customers who take issue with the something or received an injury as well, even other companies who believe you are infringing on their IP.
Whatever it may be, small businesses face lawsuits unfortunately often. These legal battles can result in large settlement fees, loss of personal time with the business, and even increased insurance rates in certain circumstances. It is always prudent to have a ‘legal’ fund set aside in the event that you might need it.
Most small business owners would say that they are fully prepared to pay for the start-up costs; that is, the labor costs, facility rental fees, licensing fees, etc. However, many small business owners neglect to set aside money for the ongoing expenses that might remain hidden from them until it is too late.
Having separate ‘oops’ funds for these scenarios will help to soften the blow dramatically in many cases. In running a small business, always try to imagine all of the unlikely ways that you could end up needing money… And prepare for as many as you can.