4 Substantial Business Expenses You Must Prepare For
January 15, 2020
Running a business isn’t free. You’re always going to have various business expenses, and some will be larger than others. It’s important to prepare for the biggest expenses as you can plan your finances and work out how to save as much money as possible. If you’re unprepared, then you’re more likely to fall into financial hardship.
Evidently, there are loads of expenses that fall into this category – and they vary from business to business. So, I’ve created a list of some of the most common, so you can be more aware of them:
A sizeable chunk of your regular business expenses will go towards your office/business premises. This includes any rental payments you make, energy bills, and other ongoing costs. There’s not a lot you can do to reduce these expenses, but a few ideas can help you out.
Firstly, switch to a smaller office in a worse location. You lose the benefits of a prime location but get cheaper rent. Secondly, think about doing away with your office and having a virtual one instead. It dramatically lowers the costs but is only suitable if you can work remotely with no productivity issues.
Naturally, employees will cost a lot of money to hire and keep. You pay them every month, and you contribute towards a benefits package as well.
To reduce these expenses, it might be a good idea to hire freelance workers in some positions. It’s cheaper; you get the same quality of work, but you lose loads of employee expenses. Outsourcing can also work, as will upskilling your existing employees so they can fill dual roles.
If your business needs a fleet of vehicles, then this will be a high cost. Many companies need cars to take employees to client meetings while retaining a professional image. Others need vans to transport goods or equipment, etc.
Again, these costs can be lowered if you’re smart about how you pay for your fleet. You should opt for used vans instead of new ones as this dramatically Alowers the costs. Also, think about if a fleet is really essential. It may be better to get your employees to provide their own vehicles.
It’s easy to forget that marketing costs a lot of money. Some things can be done for free, but the majority of your marketing campaign is paid for. You can ramp up costs in the thousands for one single campaign.
Lower these costs by doing as much of your marketing for free as possible. Also, weigh up the options and choose methods/ideas that are proven to be cost-effective and can yield a high return.
Now, you will incur loads of other business expenses along the way. Different companies have different needs, and there are things that haven’t made this list that you will have to pay for. But, these four business expenses tend to be the most significant. They will cost a lot of money, and you should prepare for them. At the same time, do all you can to lower the expenses without compromising the quality of your company.