Increase Profitability

Top 5 Hidden Costs of Running Your Own Business

Calculator, receipts and checkbook on desk for Top 5 Hidden Costs of Running Your Own Business
 

As a small business owner, you know you have big responsibilities. While serving your customer base is most important, it’s essential to keep a solid grasp on your company’s financial situation. There are many costs of running your own business. Some of these are easy to see, including but not limited to:

  • Rent
  • Employee wages
  • Travel

Conversely, there are also hidden costs of running a business. If you neglect to identify these, it could work against you in the long run. Here are five hidden costs of running your own business, as well as advice on how to deal with each one:

1. Office Supplies

This shouldn’t be a hidden cost, but often fits into this category because you overlook just how much money you are spending. A hundred dollars here for printer paper. A few hundred dollars there for toner and ink. Soon enough, you’ve spent $1,000 or more and you don’t even realize it. Office supplies are a necessary expense, which is all the more reason to plan for them accordingly. You must know exactly how much you are spending, as this can help you plan for future purchases.

2. Utilities

It doesn’t matter if you rent or own your office space, this could slowly bite into your profits. How much are you spending for internet service? How about electricity and gas? Just the same as your home, office utilities can quickly add up. Before you rent office space or purchase property, think long and hard about the cost of utilities. You may find that you are taking on too much space, which means that your utility bills will be higher than necessary.

3. Insurance

You don’t want to spend money on insurance coverage, but you know it’s something you have to do. If you pay your premiums on an annual basis, it’s easy for this cost to hide for the better part of the year. The best thing you can do is make a list of each type of insurance you carry. This can include but is not limited to workers' comp, employer liability coverage, renter’s insurance, auto insurance and key employee insurance. From there, make note of when each premium payment is due. If you’re tired of this expense slipping through the cracks, you may want to opt for monthly billing. A monthly payment may be more of a hassle, but it could help you better manage this expense.

4. Credit Card Fees

There certainly can be many enefits of using a small business credit card. For example, you can rack up quite a few reward points over the course of a year and build your business credit over time. But here’s the issue: credit card fees can quickly add up, sometimes without you realizing it. The easiest way to avoid this is to pay your business credit balance off every month. If this is not possible, closely review each credit card statement, ensuring that you understand what you are paying in terms of fees and interest.

5. Professional Services

You may find yourself hiring outside help every now and again. Since this isn’t a “regular thing,” it fits into the hidden cost category. Do you often hire an attorney before signing a contract? Have you ever got into a difficult tax situation and needed to bring in an accountant? What about some kind of tech emergency? You can't have your phones or computers go down for any extended period of time. Professional service fees can really add up, especially if you don't have a regular plan in place.

There’s nothing better than running your own business. If you want to improve your bottom line and feel better about the future, grab hold of the five hidden costs detailed above.

Learn what’s right for your business

Visit SunTrust’s Small Business Best Practices Guide for a straightforward checklist of best practices in six important areas of financial management, including increasing profitability.

This post originally appeared on SurePayroll.com. 

 

This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

Related

Investment and Insurance Products:

Are Not FDIC or any other Government Agency Insured   Are Not Bank Guaranteed  May Lose Value 

© 2018 SunTrust Banks, Inc

equal housing logoSunTrust Bank is an Equal Housing Lender. Member FDIC

equal housing logoEqual Housing Lender. SunTrust Mortgage, Inc

SunTrust, SunTrust Mortgage, SunTrust PortfolioView, SunTrust Robinson Humphrey, SunTrust Premier Program, AMC Pinnacle, AMC Premier, Access 3, Signature Advantage Brokerage, Custom Choice Loan and SunTrust SummitView are federally registered service marks of SunTrust Banks, Inc. All other trademarks are the property of their respective owners.

Services provided by the following affiliates of SunTrust Banks, Inc.: Banking products and services are provided by SunTrust Bank, Member FDIC. Trust and investment management services are provided by SunTrust Bank, SunTrust Delaware Trust Company and SunTrust Banks Trust Company (Cayman) Limited. Securities, brokerage accounts and insurance (including annuities) are offered by SunTrust Investment Services, Inc., a SEC registered broker-dealer, member FINRA, SIPC, and a licensed insurance agency. Investment advisory services are offered by SunTrust Advisory Services, Inc., a SEC registered adviser. GFO Advisory Services, LLC is a SEC registered investment adviser that provides investment advisory services to a group of private investment funds and other non-investment advisory services to affiliates. Mortgage products and services are provided by SunTrust Mortgage, Inc.

SunTrust Mortgage, Inc. - NMLS #2915, 901 Semmes Avenue, Richmond, VA 23224, 1-800-634-7928. CA: licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, IL: Illinois Residential Mortgage Licensee #MB-989, Department of Financial and Professional Regulation, 100 W. Randolph, Suite 900, Chicago, IL 60601, 1-888-473-4858, MA: Mortgage Lender license #-ML-2915, NJ: Mortgage Banker License - New Jersey Department of Banking and Insurance, NY: Licensed Mortgage Banker—NYS Department of Financial Services, and RI: Rhode Island Licensed Lender.

"SunTrust Advisors" may be officers and/or associated persons of the following affiliates of SunTrust Banks, Inc.: SunTrust Bank, our commercial bank, which provides banking, trust and asset management services; SunTrust Investment Services, Inc., a registered broker-dealer, which is a member of FINRA and SIPC, and a licensed insurance agency, and which provides securities, annuities and life insurance products; SunTrust Advisory Services, Inc., a SEC registered investment adviser which provides Investment Advisory services.

SunTrust Private Wealth Management, International Wealth Management, Business Owner Specialty Group, Sports and Entertainment Group, and Legal and Medical Specialty Groups and GenSpring are marketing names used by SunTrust Bank, SunTrust Banks Trust Company (Cayman) Limited, SunTrust Delaware Trust Company, SunTrust Investment Services, Inc., and SunTrust Advisory Services, Inc.

SunTrust Bank and its affiliates do not accept fiduciary responsibility for all banking and investment account types offered. Please consult with your SunTrust representative to determine whether SunTrust and its affiliates have agreed to accept fiduciary responsibility for your account(s) and if you have completed the documentation necessary to establish a fiduciary relationship with SunTrust Bank or an affiliate. Additional information regarding account types and important disclosures may be found at www.suntrust.com/investmentinfo.

SunTrust Robinson Humphrey is the trade name for the corporate and investment banking services of SunTrust Banks, Inc. and its subsidiaries, including SunTrust Robinson Humphrey, Inc., member FINRA and SIPC.