As an entrepreneur, you’re probably so focused on the big picture that you might get blindsided by common startup costs.
It can catch you off guard and dump you in debt you didn’t see coming. Luckily, in this guide, we’ll uncover the five most overlooked startup costs so you can be well prepared.
1. Recurring Costs
Recurring costs are paid on a weekly, monthly or annual basis. These include domains, licensing fees, incorporation fees, trademarks, and utilities. While some of these costs are small and even below $100, they add up quickly and can amount to 5-10% of your operating costs.
2. Prototyping Fees
Developing a product will eat up your money.
Unfortunately, to get the product right, you might have to do a few renditions. Unless you are making the product yourself, this process is very, very expensive. You can work to reduce costs by being a strong communicator and choosing your manufacturers wisely.
Remember, the fewer products you make, the lower your prototyping fees. If your budget is limited start with one product and perfect it.
3. Labor Costs
Whether you’re working with freelancers, manufacturers, or onboarding employees, having a team is expensive. People deserve fair compensation and you need to be prepared to cover it.
If you decide to hire a freelancer, the average service price ranges from $20 to $200 an hour depending on their expertise and experience. Onboarding an employee can cost around $50,000+ depending on the role
4. Creative and Marketing
While most startups are aware of marketing and its importance, many startups fail to understand just how expensive this vital business component can be.
A single product photoshoot can be upwards of $1,000. Add more products to the lineup and a model and a one-time photo shoot turn into $10,000. This is a huge expense, but also an important part of how you display your brand to customers, buyers, and investors.
Marketing and branding outsourcing are very expensive as well. If you choose to hire an agency, averages range from $5,000 to $500,000 for creative services. Many new businesses will choose to bootstrap marketing costs.
However, it’s important to note that the cost in that scenario is time. And time is money.
5. Office Cleaning
If you rent an office space you’re going to need to hire somebody to clean it. Every business needs commercial cleaning.
Shared spaces that aren’t cleaned can lead to disease and sickness thus harming your team, slowing down momentum, and creating a poor corporate reputation overall.
Cleaning costs with a janitorial company are flexible and can cover everything from bathroom to exterior cleaning. It’s an important part of maintaining a pristine, and virus-free workspace.
Remember These Five Startup Costs
Starting a new business is exciting! But often it doesn’t come cheap. Keep the five startup costs below on your radar so you can better manage your budget:
- Recurring costs
- Prototype development
- Marketing and branding
The cost of starting a business is often higher than expected. Organize a smart business plan by expecting the worst but hoping for the best. This will prevent any surprise costs and give you a runway for bottlenecks.
For more startup knowledge. Continue reading on our blog!
The Insidexpress is now on Telegram and Google News. Join us on Telegram and Google News, and stay updated.