The first thing to do when starting a new business is to make a business plan. However, even the best business plan cannot plan for unexpected costs. There is no way to plan for everything, but here are three unexpected start-up costs that many businesses encounter.
- Software and subscription fees. First, since everything has moved to a subscription model, you will be paying for subscriptions and services. These can be anything from utilities to Netflix, and you may have to add a few services along the way. For example, you may think you can do all of your budgeting manually, but after a few months in business, you may want to invest in booking software instead.
- Shrinkage. Next, another thing new business owners forget about is shrinkage. Shrinkage is all of the product that disappears but isn’t sold. Shrinkage can be from theft, paperwork errors, or even supplier fraud. No matter what the reason, it is difficult to predict these numbers, and you must still try to account for this expense.
- Equipment repairs and replacement. Finally, even if you buy all new equipment, you cannot predict when the equipment may need repairs or replacement. These can be some of the most expensive costs that you will incur in your first years of business, so it is imperative to make sure you prepare accordingly. You can add routine expenses to your business plan, but you still may want to set aside a little extra for emergencies.
New businesses have a lot of expenses. Some expenses can be predicted, such as the cost of materials or the initial costs of equipment. However, some cannot be predicted. Instead, the best thing to do is to secure adequate funding for your business. If you are looking for a funding source for your business, Aspen Commercial Lending can help you figure out the best way to secure the capital you need.