by Derek Goodman | Feb 11, 2022
Monitoring your small business expenses is important for budgeting and financial forecasting. But if you just launched a new business, you don’t have any previous financial data to draw on when estimating financial projections. Don’t forget to include common recurring small business expenses when drawing up your budget and planning for the future. Let’s explore some ongoing costs to plan for as you get your new business off the ground, as well as some tips to help you save money and boost your bottom line.
Licenses and Memberships
You may need to pay annual fees for maintaining licenses, holding memberships, filing reports, and registering your business.
Keep in mind that LLCs come with annual report filing fees while sole proprietorships don’t have any recurring maintenance costs.
Budget for ongoing fees to renew your local, state, and federal licenses.
If you’re part of any small business associations, like your local chamber of commerce, you may need to pay annual fees for these as well.
Location Expenses
Even if you run your business out of your own home, you’ll have to account for a number of location expenses in your monthly budget.
An energy audit can help you identify ways to lower your utility bills.
If you lease a commercial space for your business, remember to deduct your rent from your taxes.
Remote employees and virtual offices can reduce your need for physical space.
Supplies and Equipment
Your equipment costs will vary greatly depending on the type of business you’re running. Regardless, look for ways to control your ongoing supply costs.
Remember to account for recurring fees for software and app subscriptions.
Look for ways to save money on office supplies, like using less paper.
Buy used equipment whenever possible instead of locking yourself into high monthly lease payments.
Wages and Payroll Taxes
Labor will likely account for a large portion of your ongoing business costs. Be sure to estimate these expenses carefully!
Estimate the payroll costs for your employees so you can create a realistic hiring budget.
Remember to include payroll taxes and employee benefits in your calculations.
Plan for the additional cost of hiring the occasional outside professional like accountants and attorneys.
Running a small business involves juggling a number of expenses, some of which are small and others that can have a significant impact on your cash flow. Keep these common recurring expenses in mind as you draw up financial projections for your business. With an accurate estimation of your ongoing costs, you’ll be able to make the best possible decisions for your business.
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