Before starting a business, it is important to be realistic about the fact that it will cost you a lot of money. Many first-time business owners make the mistake of assuming they will be able to afford their new shop or restaurant without sitting down and determining what the real cost to open it will be. The following guide will walk you through a few of the true costs you’ll have to pay when you open your business that you may not have fully taken into consideration.
Lawyer Fees (duh!)
When you start your new venture, you should always have an attorney prepare and review your formation documents to assure your company is started right. It is important to have a business attorney look over any contracts before you sign them. They will be able to make sure that you are not signing a lease that requires you to do more than you expect to do. They can verify that you and the vendors are on the same page when it comes to the supplies that you will need. Also, they can look over any insurance paperwork to help you choose the right coverage for your needs. Having a lawyer who specializes in business will ensure that you can protect yourself if anyone tries to sue you along the way.
You’ll also need to invest in the services of an accountant to make sure that your business’s finances are properly documented. Hiring a professional allows you to account for where each dime is spent, and it will make it easier to determine where cuts can be made when needed. An accountant can also help you make sure that your taxes are paid on time and in full.
When you start a business, is best to lease a space rather than buy one at first. This will allow you to determine how much space you need for the business, whether the location is optimal, and how much you can actually afford to pay for a space each month. Eventually, you may be able to buy a business space, but at first it is best to make a shorter-term commitment.
Insurance coverage is essential when you own a business. You need to be sure that all your merchandise and operational equipment are covered under the insurance policy. Additionally, if anyone is hurt while working for or visiting your business, the insurance company will pay their bills rather than you.
When you’re a new business owner, you may not be aware of all the utility fees you will have to pay. Not only will you have to pay for electricity and water, you will also have to pay for a landline phone, as well as waste management and credit card service fees. Most credit card companies charge businesses a fee for their transactions, and the fee can be different for each card. Some companies limit the cards that they accept based on the fees that the companies charge.
It is best to sit down and determine what all of the costs for your business will truly be before you open the doors. Assembling a trusted team of advisers will be worth the initial investment. Get a loan if you need one so that you can pay for everything that you will need right away. If you run out of money, your business may never recover, so don’t take any shortcuts.