You know that age-old saying, “You have to spend money to make money”? That’s a motto that millions of American businesses live by each and every year.
In order to turn a profit, it’s very important for businesses, both big and small, to have a long list of business expenses. They have to pay for everything from office space to marketing to ensure that they’re able to run a successful operation in the end.
If you’re thinking about jumpstarting your own business soon, you need to know about the list of business expenses that you’re likely going to face. It’ll help you to prepare for them in advance so that they don’t catch you off-guard.
Here is a complete list of business expenses that you should be ready for when you start running your own company.
There are a lot of business owners who get their companies off the ground from their homes. If you’re in the process of doing this, you obviously won’t need to worry about paying rent just yet.
But as a business grows, it’s almost always essential for them to rent at least some office space. It’s often the biggest expense that a company will face when it comes to its list of business expenses.
If you’re going to rent out a space for your business operations, you should look around for the most affordable space you can. Something off the beaten path might work just fine for you and be more cost-effective than whatever you would pay for storefront rent.
Outside of investing in an office space, there is also a whole bunch of equipment that you’ll need to buy to run a business. This equipment is going to include things like:
- And more!
You might not think that it would cost too much to get your hands on all of this equipment. But it can add up over time. You should try to buy a little bit of equipment at a time to avoid racking up huge bills.
In addition to buying equipment to run your business, there are also tons of supplies that you’ll need to have around. You’re going to have to make recurring payments to keep supplies handy day after day.
Supplies will, of course, include things like paper, staples, sticky notes, and more. But it might also include things like engraved name tags if you run a store. You won’t be able to keep your business up and running without all of these things.
You’re going to need to make sure that you’re able to turn a net profit with your business to “keep the lights on.” And we mean that in the most literal sense possible!
Every month, you’re going to have to get your business’ electric bill squared away. You might also have to pay other utility bills, like water bills and sewer bills as well.
More often than not, businesses are going to be responsible for paying someone to haul away their trash as well. These things will add to your list of business expenses and force you to produce a profitable income statement each month.
Are you going to be running a business that calls for you to make deliveries to your customers? Or are you going to be running a business that will require you to drive to your customers’ homes to provide your services?
If you answered “yes” to either of those questions, then you’ll need to think about buying at least one vehicle for your business. You might even want to consider investing in an entire fleet for your company. It’ll help you run your business and keep your customers happy.
Marketing might not seem like it would cost your company too much money. But believe it or not, you should be prepared to spend about 7 to 8% of your company’s gross revenue on marketing and advertising.
That doesn’t mean that you should just go and spend money on marketing frivolously, though. You should find the marketing strategies and techniques that work best for your specific business and put them to the test.
By marketing your business as effectively as you can, you can help spread the word about it fast. You can generate more interest in your business and improve your bottom line in the process.
When you first start a business, you might do pretty much everything on your own. From taking calls from customers to filling orders, you’ll be in charge of doing it all.
But as your company expands, you’re going to need to bring in some more employees to help you out. This is going to mean that you’ll need to put together a payroll so that you can pay everyone who works for you.
Oftentimes, payroll expenses are going to be the biggest expenses of all for businesses. You’ll usually find them near the top of your list of business expenses.
Your employees are ultimately going to make or break your business, so it’s important to pay them fairly and to provide other benefits for them, too. By doing this, you’ll entice them to work as hard as they can for you so that your business can continue to grow over time and bring in even more of a profit than it already does.
This List of Business Expenses Is Only the Beginning for Business Owners
The list of business expenses that we’ve talked about here covers most of the bigger expenses that business owners will face. But there are also lots of other smaller expenses that you should have on your radar.
For example, your business may have to pay a lawyer, an accountant, or another professional for their services. You’ll also have to pony up for different forms of insurance.
You should keep a running list of business expenses and do what you can to make it manageable. It’ll stop you from spending money that you can’t afford to spend.
Find more excellent business advice by browsing through the other articles found on our blog.