The hidden costs of starting a new business
Starting a business is probably one of the most fun things you will do in your life. The freedom to do your own thing is not appreciated, but many entrepreneurs cite cash flow problems as one of the biggest challenges. We’ve put together a list of common luggage to look at as you budget for your new project.
As your business progresses, you will need to hire staff to help you. Remember that even if you pay an employee Rand 10 000.00 per month, that is not a real cost. As a general rule of thumb, business owners should expect an employee to kill 25-30% above the basic salary each year. Additional costs include fixed costs such as taxes, UIF, uniforms, training courses, paid time and currency /entertainment (for example, staff discounts, parking and, monthly drinks), as well as soft costs such as fees. the time and resources needed to train a new employee.
It’s fine to make your own sales and taxes but you may find it takes up more of your time than you can. Professional services, however, come at a cost, so remember to budget your sales / social media services with your IT provider, recruitment consultant, accountant, and tax expert. You will also need to allow bank charges and legal fees.
Save a little money for unexpected repairs to your premises, machine or computer. From a dry roof to a broken air conditioner to weather damage to your logo, you’ll never know what bad luck might befall you in the future. If you rely on a machine, you also need to direct the services and maintenance in your budget. Instead spend that money on a regular service to keep the equipment in good running condition, rather than getting stuck and buying new equipment. You can protect yourself from getting insurance cover which includes business interruption and machine cover.
It is another cost that may be more than you hold for insurance but is undoubtedly the single most important cost in your business. As a minimum, you will need employer and public coverage. It is also a good idea to take business interruption insurance, protect your property and shares against fire and flood, and cover your business vehicles.