Common Expenses Businesses Forget to Factor In

Photo by: Photo by Artem Podrez

Most people, when starting a business, will need to develop a business plan, and in that plan they will need to list their expenses, so they can work out how much they will need to charge for their products or services to make a profit. When doing so, it’s easy to factor in things like the cost of utilities and raw materials, but there are some sly expenses that so many businesses forget to factor in, which can come back to cause them a problem in the future.

So, to make sure you are fully prepared, let’s take a look at a few of them right now. 

1. The 'Miscellaneous' Black Hole

Every business budget has one line item that’s a bit of a catch-all: Miscellaneous. But this vague category can quickly become a budgetary black hole if not monitored closely. From emergency repairs to last-minute supplies, it’s essential to set realistic estimates and keep this category in check, or it might just swallow your profits whole.

2. Software Subscriptions 

In today’s digital age, we’re all about those SaaS (Software as a Service) solutions. They promise to make life easier and usually do, but those monthly or annual fees add up faster than likes on a viral tweet. Whether it’s your accounting software, your customer relationship management system, or your graphic design tools, each subscription is a steady stream of money flowing out of your bank account. Make sure you’re actually using what you’re paying for, or those silent siphons could drain your resources dry.

3. Music Licensing

Think setting the perfect ambiance with a Spotify playlist costs you nothing more than a monthly subscription? Think again. If you’re playing music in a shop, salon, café, or any public setting, those tunes could tune out a chunk of your budget.

Music licensing fees ensure that artists get their fair share, and yes, they apply even to small businesses who are looking to play music for shops or offices, for example. Organizations like BMI or ASCAP have licensing options designed for businesses, so make sure you’re not unintentionally pirating Taylor Swift’s latest hit in your coffee shop.

4. The Swag Saga

Who doesn’t love free stuff? Branded pens, t-shirts, mugs—swag is a fantastic way to spread brand awareness. However, the cost of producing these promotional items can add up unexpectedly. Be strategic about what you give away, to whom, and why. Otherwise, you might find your marketing budget spent mostly on accidentally outfitting half the city with your logo-emblazoned hats.

5. Green Matters

Going green is more than just a trend—it’s a responsibility. However, proper recycling and waste management come with their own costs, which many businesses forget to anticipate. Whether it’s paying for special disposal services or investing in sustainable materials, being eco-friendly can have initial costs that pay off in long-term gains and goodwill.

6. Training Trials

A well-trained team is non-negotiable, but the cost of training those superstars often slips through the budgeting cracks. From online courses and workshops to conferences and seminars, professional development is an investment. Factor in these costs to avoid being caught off guard when you’re trying to level up your team’s skills.

7. Insurance Increments

Sure, you remembered to get insurance, but did you account for the fact that premiums could increase? Or that different kinds of coverage might be necessary as your business grows and changes? Regularly review your policies and anticipate adjustments to ensure you’re adequately covered without being blindsided by a sudden spike in costs.

8. Taxing Situations

Ah, taxes—the bane of every business’s existence. While you’re probably aware of the basics, there are always nuances and changes in tax laws that can impact your business. And let’s not forget about those quarterly payments that sneak up faster than deadlines. A good accountant can be your bestfriend here, helping you navigate the murky waters of tax time without capsizing.

9. Credit Card Fees

Accepting credit cards is pretty much a must in today’s economy, but those transaction fees can nibble away at your bottom line like hungry little mice. Make sure to account for these fees when setting prices and keep an eye on rates from different providers to ensure you’re getting the best deal.

Starting a business without factoring in this stuff is not a good idea because you need to know as accurately as possible what you are likely to spend so that you can get your prices right an actually stand a chance of making a profit. Good luck!