Starting something new is very rarely easy, but this is especially true when it comes to being your own boss. Building a small business is definitely a challenge and a costly one at that. In fact, lack of capital is one of the most common reasons why so many startups fail. That is why good money management is so important. This means planning for unexpected expenses, as well as the obvious ones. To make this task easier, here are five hidden costs you must prepare for.

1. Employee Turnover

While most entrepreneurs budget the cost of hiring staff, very few plan for the possibility of team members leaving. When an employee moves on from your company, you’ll have to go through the interview and hiring process again, as well as train your new staff member. You may also need to employ temporary help until this process is completed. Keeping a stable workforce will eliminate these costs, so do what you can to ensure that your entire team remains happy.

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2. Office Utilities

The costs involved in buying or renting physical office space are large, but many business owners make the mistakes of only consider the rent or mortgage payments. There are also utilities, like water, gas, and electricity, that you will need to cover to provide a functional space. Creating a more environmentally-friendly office will help you to reduce your utility bills. There are many ways to do this, including turning off outlets at night and opening the blinds during the day.

3. Company Vehicles

Depending on your industry, your business might require certain vehicles to carry out their services. You may also offer your employees cars through the company. This means that you’ll have to pay for fuel and, if the vehicles break down, you will need to cover repairs and may need to seek Swan Towing services. Putting company vehicle policies in place can save you from buying more fuel than you need to, and regular maintenance can prevent these breakdowns.

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4. Product Shrinkage

Any company that sells physical products, whether it be through an online store or a brick and mortar one, has to deal with shrinkage. This is where those products are stolen, lost, or damaged before they make it into customers’ hands. This is a huge issue in the retail industry and one that can cause a lot of problems. Unfortunately, there’s no way to avoid shrinkage completely, but proper inventory management and increased security can reduce it.

5. Legal Fees

No entrepreneur enters the business world looking for a legal battle, but that doesn’t mean that one won’t find you. While insurance can cover many expenses, you may still be left paying legal fees, as well as settlement costs. Your insurance premiums might also rise, and you could lose business as a result of your legal troubles. Hiring professional legal advice can help you to stay on the right side of the law and defend you when someone accuses you of breaking it.

Money is the fuel that keeps the business world turning, so look after yours by planning for the hidden costs listed above.