by Carla Lopez (Guest Author) | BoomerBiz.org |
Understanding your recurring business expenses is important for making accurate financial projections, realistic budgets, and smart spending decisions. Good financial organization is critical to your success. When you know exactly where your money is going every month, you’ll have more control over your cash flow so you can stay out of the red.
But if you just launched a new business, you can’t draw on months of previous spending records to plan for the future. Here are some of the most common recurring business costs to keep in mind and some resources to help you keep costs under control.
Common Recurring Business Costs
Small business owners should be prepared to cover a wide range of ongoing expenses, from location costs to professional fees. Know what to expect so you can maintain a healthy cash flow. Here are a few common expenses to expect:
● Government-related fees for business licenses, permits, and registrations.
● Paying quarterly estimated taxes to the IRS.
● Subscriptions to helpful apps and business software programs.
● Business insurance to protect yourself, your business, and your employees.
● Employee wages, payments to freelancers, or other labor costs.
● Costs to market your business, both online and offline.
How to Keep Costs Under Control
You don’t have to accept all of these costs as they are. There are countless ways to save money on recurring expenses, like downsizing your office space or hiring freelancers instead of employees.
● Register your business as an LLC for tax advantages.
● Adjust your insurance coverage annually to save money without giving up your protection.
● Downsize your office or retail space and shift to remote work and virtual services.
● Let your vendors know that you’re looking for better rates and they may cut you a deal.
● Take advantage of free marketing avenues, like social media and email.
● Hire freelancers for one-off projects instead of onboarding full-time employees.
Your small business cash flow depends on two things: your revenue and your expenses. To ensure more cash flows into your business than out of it, look for ways to reduce your expenses without reducing your revenue. Take a proactive approach to managing expenses and you’ll be able to avoid cash flow headaches as you get your business off the ground.
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About the Author: Carla Lopez
Carla Lopez retired a couple of years ago, but she didn’t lose her entrepreneurial spirit. She created Boomer Biz for retirees like herself who still have a desire to work and achieve. The site is a resource for people in their golden years who want to start their own business or go back to work doing what they love.