It’s a huge jump, but if statistics are to be believed more and more people are making it. Whether it is because of the “gig economy” culture which is forming or something else, we’re not going to speculate. However, self-employment is rising – and start-ups are popping up left, right and centre.
As anyone who has considered this avenue will testify, it’s a leap into the unknown. The guaranteed salary is out of the window, but something else that a lot of people forget about are the hidden costs.
When we plan out our new business on a beer mat, we might consider a handful of expenses. In reality, there are umpteen different ones, and today’s article will look to unearth some of the ones that tend to be forgotten to help you along your way.
Misleading stationary and office costs
The first point we are going to focus on will hopefully highlight just how misleading expenses can be in the world of a start-up.
For many, stationary is seen as something which isn’t going to make a dent in your total budget. However, if your business heavily relies on paper for example, it’s something that can add up astronomically.
Not only that, but stationary covers a wide area. For example, you might need to turn to a photocopier lease rather than buying a machine outright depending on your situation. When you then start to consider all of the other office equipment like telephones, printers and sometimes fax machines – the costs have probably surpassed what you initially forecasted.
The cost of borrowing
Unless you have been saving for years, there is a big chance that you have had to take out some sort of loan for your business.
Well, these can get expensive. Even the best deals can have hefty interest rates attached – and let’s not forget that your repayments will start in your first month of trading. In other words, even if you haven’t turned over a dime.
The perils of shrinkage
Something that isn’t often spoken about in the world of business is shrinkage. In short, this refers to mistakes, shoplifting and similar issues which hinder your bottom line.
How much could it hurt you? Well if studies are to be believed, businesses in the US lose about $49 billion per year because of the above problems.
Finally, something else which is often forgotten is the cost of insuring yourself. If you have been employed for most of your career, this will have been something that your employer took care of.
Now, the onus is on you, and this insurance can cover everything from employers’ liability right the way to professional indemnity insurance. Particularly if you fall into an industry which covers the latter, this is something that can result in huge monthly costs so you do need to be aware of it before you proceed with your costing’s.
Let’s not forget that this is crucial from a legal standpoint as well; as you won’t be able to trade without certain forms of insurance.