With your own product or service already in mind, starting your own business might seem like a piece of cake! However, in reality, it is not so easy considering how costly getting your own business up and running actually is. Becoming your own boss entails a significant investment. So before you dive into your future as an entrepreneur, make sure that you are aware of all of the expenses that are attached to this life-changing venture.
First, there are the license costs. Depending on what your business is going to be, there will be specific permits that you will have to apply for. For example, there are LLC licenses, fire department permits, county permits, health permits, and even alcohol permits. On top of all of the costs to purchase the permits, you might need to spend money to hire professionals like lawyers or accountants in order to obtain them. So be sure that you are thoroughly educated about what permits and licenses you will need for your particular industry, and factor in the total costs of them into your budget!
Just as a precaution for the unexpected, you will also need to insure your business as well. It is not a must-have, however, it is a good safety blanket just so you don’t lose all of your hard work over a freak accident. And these insurances entail a large chunk of money! Talk to an insurance professional about the specific insurance type that is suitable for your industry and become knowledgeable of the policies of your insurance just so you are not paying for what you don’t need.
Taxes already haunt you enough in your everyday life, however prepare for even more of a burden once you start your own company. As soon as you open your own company, you will be charged with a self-employment tax. And the downside of this tax is that it is required even if there is no revenue funneling into your pockets. Therefore, you need to be aware to deduct the amount of tax you need to pay for your business from your earnings when you are looking at how much money you have profited through your product or service, and allocate that amount to your business’ budget.
Finally, the costliest aspect of starting your own business is: time. As cheesy as it sounds, time is, in reality, money! Being your own boss isn’t all fun and games all the time, but it requires you sitting down and completing tedious tasks as well. In order to be well prepared as you start your venture, you need to develop the patience and willpower to pay your bills on time and keep track of payroll. There will be some give and take with your schedule and it might even interfere with your personal life, so set your priorities early on and allocate your time accordingly.
All of these are just some of the factors that paint a more realistic picture as to the costs of running your own business. Many people may dream of being their own boss. But before you accomplish this dream, be sure you consider all the costs that are needed make your entrepreneur wishes come true!