Look at you! You’ve created a business. You came up with a brilliant idea and brought it to fruition. At this point, many entrepreneurs wonder: Where exactly do I need to spend money to run my business over time? Will these costs limit my business’s success? There are many misconceptions on creating a budget and how it constrains a fledgling business.
In reality, a keen awareness of your budget will save you a lot of money and frustration in the long run. Here are four common ongoing costs of running a business that you should put into your monthly budget.
Hosting Your Website
While it’s true that you don’t need to spend any money to build a website, you should – at the very least – invest in your own domain name and hosting. It just more professional to own my-real-business.com compared to my-real-business.CMS.blog.com.
Web hosting is like renting an office space for your business, except it’s all online. With the help of a web hosting platform, you have a simplified guide to creating an attractive and functional website. You just have to be aware of what web hosting pricing is available and take into account how much your business can afford.
Estimated costs: Working with a platform provider can be as cheap as $4 per month; or as expensive as you are willing to pay for.
In addition to hosting websites, you’re going to have to market your brand in several ways. This should include a healthy mix of marketing tactics, including social media promotion, paid marketing, organic market, etc. The objective is to create multiple avenues welcoming a variety of online users.
The first step in creating a marketing budget is identifying your needs. Perhaps you need to create more brand awareness for your business; or maybe your objective is to make more sales. The former should be relatively cheap since you can capture a lot of eyeballs using social media and good SEO. The latter is likely more expensive and time consuming, since you need to find the right kinds of leads. Either way, once you identify the needs of your marketing plan and how it’s going to help bring in customers and increase sales, it’s much easier to create a budget that encompasses them.
Estimated costs: With social media, you can market your business for next to nothing. Paid advertising is much more expensive, obviously.
Keeping track of your inventory, stocking and restocking, and using that data to manage sales is incredibly important to any business. Inventory management is a system your business can create to keep track of inventory. No matter how young your company is, there will come a time when inventory management becomes a necessity. Although you’re going to have to put money into it, you’ll be on top of your numbers.
This way, you know which products are selling, which aren’t and in what quantity. This can be useful when considering how buying in bulk saves your company money; or managing how much stock you’ll need during an especially busy season. Additionally, if you have full access to your inventory, it creates better customer service.
Estimated costs: Manually tracking inventory is cheap, but inevitably leads to errors. Inventory software can be a big help but typically runs in the thousands for small-to-medium operations.
Next up, you’re probably going to need several types of insurance to cover your liabilities. Some of the more common examples include property insurance, casualty insurance, workers’ compensation and liability insurance. Keep in mind that your industry might have specific needs. So do your research on different types of insurance.
Estimated costs: Policies range widely according to need, but could run somewhere between pennies a day to a hundred of dollars a month.
It could very well be that you’ve started a great business with a bright future. Still, it’s important to plan for your own success. So, don’t forget to incorporate these ongoing costs into your monthly/quarterly budget to enjoy the best outcomes for your company.