The cost of starting a new business comes as a shock to many entrepreneurs. However, don’t let this daunting thought stand in the way of creating your dream company. Take a look at this list of surprising startup costs, so you can be fully prepared: 

  • Business Insurance: Insurance seems very expensive, until the day you need it. So don’t skip any type of insurance you may need to protect your business. You might need errors and omissions insurance, workers’ compensation, liability insurance, and unemployment insurance, business property and vehicle insurance, and much more. Health insurance for employees may be needed, or you may elect to offer it to attract quality employees to your company. 
  • Tax Burden: The federal, state and local governments take a fairly large share of your profits. You can easily underestimate the amount you need to set aside for self-employment taxes, LLC or incorporation fees, and more.  
  • Industry Association Memberships: Great for industry networking and credibility, these associations cost money to join. Besides helping you make vital connections in the business community, you’ll also stay informed about the latest industry news. Association membership helps you to stay up-to-date on current research, and discuss important industry trends that affect your business sector. 
  • Professional Fees: You need experts to advise you in areas outside your expertise, of course. Hourly or per-project fees may be much higher than you might imagine. You also may have to consult these pros more often than you planned. Pad your budget for legal fees, since you’ll likely need a lawyer to assist in setting up your business entity, and paying the correct state filing fees. (Consider a legal retainer if you need to consult your attorney on a regular basis.) You’ll also need to budget for accountant’s fees, so you can contact your bookkeeper as needed.   

Use this list to help you create initial startup cost estimates and an operating budget. This helps ensure that you request the right amount–and type–of funding for your new business. We offer many types of small business financing to fit the needs of ambitious startups. Contact Commercial Capital Funding today and we’ll help you analyze your options.