In most cases this will involve the cost of designing, engineering, and manufacturing your product – which can get very expensive. If you’re building a product then you’re going to have invest in putting together an experienced product and design team in order to build, iterate, and continuously improve your product. Furthermore, focus on memberships that provide business-related discounts on items like insurance, loans, credit card fees, supplies, and training. If you want to reduce these costs, be selective about the groups you join since annual memberships can cost you hundreds of dollars. You’ll also want to set aside the money for membership dues that you have with networking organizations like your local chamber of commerce or industry/professional groups. They often have to be renewed, so make sure that you factor in those continual expenses and then set that money aside. The permits and licenses you may need to do business in your community aren’t just one-time expenses. Talk to your lawyer about what kind of insurance your business needs and then comparison shop for the best insurance quote through sites like, Insureon, The Hartford, or Comparethemarket. Insurance can get pricey, but it’s necessary. If you have full-time employees then you’ll have to carry Worker’s Compensation Insurance, while Liability Insurance or Errors and Omissions Insurance will shield yourself against potential lawsuits General Liability Insurance will protect you from disasters, theft, slip & fall, etc. Typically, the types of insurance your business will need to consider are: Insurance is strongly recommended for your space, inventory and equipment, and your employees. If you’ve looking for a less expensive legal option you can check out a service like LegalZoom. And that’s not even including the addition of your jurisdiction’s filing costs and periodic mandatory filings. In fact, according to Entrepreneur, hiring a lawyer to help you incorporate your business can cost you between $500–$1,000. Regardless of the entity you choose, incorporating your business requires lawyers, which cost a lot of money. Unlike an LLC, a C corp gives you the ability to issue stock, which we’ll discuss in moment when going over borrowing costs. However, if you plan on growing your company, which will involve an angel investment or institutional capital, then you may want to form a C corp. When it comes to the structure of ownership, LLCs are extremely flexible. One of the first, and most important, decisions you’ll make as a business founder is if you’re going to form either an LLC (a limited liability company) or a C corp (a traditional corporation). Just prepared to dish out anywhere between $5,000 and $15,000. While some business owners choose to hire market research firms, you can conduct your own market research through phone and email surveys or focus. Prior to starting a business you need to conduct careful research of the industry and consumer makeup so that you can validate your business idea, make sure there’s a market, and know who your potential customers are going to be. Sometimes these expenses are obvious, like your salary or equipment to produce your products, but there are a lot of costs involved with starting and running a business, like these 25 overlooked costs.
The thing is, most business owners often forget that it takes money to make money – especially when you’re just starting out. If you’re like most new business owners, you probably took the risk of starting your own business because it’s a lifelong dream or passion.
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