You’ve decided to open an agency, and you believe you have all the capital needed to get it up and running. That may not be so, according to SEOsandwitch blog founder Joydeep Bhattacharya. There are always hidden expenses that a start-up business requires.
“Costs add up to a humongous extent, especially in a startup, so thorough planning with careful accounting can save you from going bankrupt,” Bhattacharya wrote in a post on business.com.
Bhattacharya noted several commonly overlooked startup expenses, with tips on how to fix them.
1. Office and Equipment — Determine whether you should lease or buy the equipment. Whichever you decide, be sure to go over the terms and conditions of the lease/purchase agreement thoroughly to avoid hidden charges. Build a reserve fund to handle repairs.
2. Talent Recruitment — According to the article, this aspect of owning a business is a huge part of a company’s budget because it includes expenses for advertising for the position; salaries, benefits, and government compliance; and aspects you wouldn’t think of such as background checks.
“If you haven’t filled in a payroll previously, you would be shocked to realize how much extra you need to pay overhead,” Bhattacharya wrote.
3. Trademarks, Domains, and Websites — Secure copyrights and trademarks for your business. Most include a one-time registration fee and monthly (or annual) maintenance charges. Domain purchases can be fairly cheap unless you need more than one (for example, if your business is international.) Once you have your domain name, use a free CMS such as WordPress to design and build out your site’s content.
4. Insurance and Legal Work — These fees, which also include registrations fees, can average anywhere between $5,000 to 20,000 for a startup. “The more complexities involved (intellectual property transfers, number of investors), the higher are the expenses,” according to Bhattacharya.
Become familiar with policies and laws related to your business, create a draft of the “minimum workable legal protections” and have a professional review it. Instead of paying a lawyer by the hour, try to negotiate an alternative fee arrangement. You may also consider outsourcing your legal needs. “Hire a part-time attorney that takes care of your time-consuming obligations on target basis,” Bhattacharya suggested.
5. Marketing Activities — There are easy ways to market your business with very little cost. These include using social media, learning about and using digital and email marketing, and becoming acquainted with SEO. Target traffic from organic searches instead of paying for Adwords Bhattacharya suggested. “To build consistent traffic without constant investment, purchase SEO content,” he wrote.
Another option is to hire a public relations professional. “…it may be costly depending upon your requirements, but the ROI can easily overshadow it,” Bhattacharya wrote.
Source: “No Hidden Costs: 5 Overlooked Startup Expenses and How to Fix Them,” Business.com, (Jul. 27, 2016)