At the launch of any start-up company, owners are faced with one pervasive thought: expense. Money flows out in a thousand different directions and revenue is a mere star on the horizon. These initial expenditures come at the same time you as an owner are attempting to map out future, recurring expenses. And in this frenzy it’s easy to forget a few.
To ensure you don’t find yourself a month into operations faced with surprise bills or lacking an essential resource, review this list of commonly forgotten expenses and account for them in your budget:
1. Life/Disability Insurance: Your everyday worker doesn’t concern himself much with life or disability insurance. Let’s face it, it’s a pretty grave subject, and since it’s the duty of his employer to provide it, he doesn’t have to worry much about it. But when a worker leaves a company to go into business for himself, he’s apt to forget that this responsibility is now his own.
2. Accounting Costs: In the planning stage of a business, it’s easy to feel like you can handle a lot. But once your start-up is up and running, you may find you’re being pulled in a million different directions. You’ll be dealing with clients, performing services, and seeking out new talent. And, in all your entrepreneurial spirit, you may be able to handle these responsibilities. But one duty you may want to delegate is your accounting.
Keeping your books in check is a time consuming, and rather technical task. People go to school for years to become able enough to manage accounts. Rather than invest an enormous amount of time learning the trade and continuing to exercise it, you may want to hire an outsourced accountant. It’s a good idea to do this as early as possible so that you can get your finances in order from the get-go.
3. Legal guidance: As an entrepreneur, you’re not just a jack of your trade, you’re a small business owner. And this additional title comes with a lot of paperwork. Before hiring employees and taking on clients, you’ll have to draft contracts. And you can’t expect anyone to sign a piece of computer paper with “I’ll be good” written in pencil.
It’s essential to have someone credible help you craft, or at least look over, these documents. Not doing so could mean some serious trouble down the road.
4. Office Equipment:When focusing on the big picture (as you must do when launching a start-up) it’s easy to overlook the little things. You forget you’ll need a place to sit in your office, an internet and phone service, a cabinet for your files, some pens and pencils, etc. And while none of these things are too costly, added together they can present a bit of an expense.
Nice view, but it may be nice to have a chair from which to enjoy it.
Worried there may be more expense you haven’t accounted for? Refer to Mark Davis’ Inc. article for a list of others commonly missed.
If #3 struck a chord with you, and you’re interested in hiring an outsourced accountant, contact us. Our start-up accounting and CFO services experts can provide you with personal guidance.