3 Important Expenses Entrepreneurs Should Not Overlook - What to Know
Going on a new business venture as a starting entrepreneur is both an exciting and terrifying ordeal. There are plenty of factors to take into account in your business plan. Still, before you put all your objectives into action, the first step is to practice smart financial planning as it will serve as a cornerstone for the success of your business.
The budget is always part of the priorities, some of which are obvious like the salary for your human resources, equipment, and production costs. Still, there are assets within your financial obligations that are easy to overlook.
Failing to allocate resources for these hidden costs can backfire on you down the line, that’s why it’s crucial to unveil them from the get-go to avoid any financial surprises as you start building your business:
1. Annual Tax Payments
Many start-up businesses know that they need to shell out a significant sum of money for overhead costs, employee expenses, production costs, but most forget that all your choices will have annual taxes by the end of the year. Of course, the yearly taxes depend on your type of structure.
A C-corp, for instance, will have to double-up their taxes since the structure involves issuing stocks, which includes dividends. This means C corporations will have to pay for corporate profits and another round on the dividend it issues.
Meanwhile, an LLC has the benefit of a more flexible tax structure. This means that business owners can choose to be taxed as a partnership or corporation.
2. Business Insurance Payments
You can’t run a business without insurance as it is a necessary asset that covers you in the event of potential disasters, theft, accidents, and more. It’s not a luxury nor an investment, but a requirement in most cases if you want to protect your space, inventory, equipment, and employees.
Some of the essential insurance types you need include general liability insurance, medical insurance, worker’s compensation insurance, commercial vehicle insurance, and professional liability insurance.
3. Permits, Licenses, and Dues Renewal
It’s impossible to forget about acquiring permits and licenses when setting up a business in your state, but what slips off the mind is the fact that most permits and licenses involve continual expenses. You can find a way to reduce these costs by networking with organizations or joining a membership that can provide discounts on insurance, loans, supplies, and training costs.
The Bottom Line: Addressing the Top Overlooked Costs When Starting a Business Can Save You Money in the Long Run
Starting as an entrepreneur means there are a plethora of responsibilities, objectives, and expenses on your plate. With that in mind, working with a professional bookkeeper or accountant can take the burden of your financial obligations off your shoulders as they can help organize your monetary affairs and guide you through tax rules.
Beyond that, expert accountants can help future forecast revenues, operating costs, and other assets to streamline the growth of your business.
If you’re looking for quality accountants that provide accounting and bookkeeping services for your entrepreneurial ventures in Mermaid Beach, New Wave is your best option! Contact us at (07) 55041999 and see how we can help you!