Do you want to start a business? If so, there’s one thing you should know: running a company isn’t cheap. Maybe you already know this information because family, friends, or people in your network have complained about the financial reality of running a company. But during those venting sessions, did anyone give you specifics on what to expect to spend financially? If not, you need to know the details, particularly the monthly costs of running a business.
Having insight into the financial costs of running a company will give you a better chance of success because you’ll know what to prepare for and potentially how to prepare it. However, it’s important to keep in mind that your monthly business costs may differ from someone else’s. Expenses will change depending on the type of company you have and the industry you’re in, so don’t expect similarities across the board.
Consider the company you want to start and the niche you plan to target to determine which expenses you’ll need to pay. But if you’re unsure which expenditures to even consider, here are the most common monthly costs of running a business, some of which may apply to you.
1. Workspace
Will your employees work in the same physical location, or will you have a remote company? The answer to this question will determine if you need to pay for a commercial space. However, all routes still lead to monthly expenses.
When paying for a physical location for employees, you’ll need to consider costs like gas, water, electricity, internet, building maintenance, janitorial fees, and local taxes. You’ll also need to consider some of these things if you have a remote business. For example, you’ll need to pay for telephone, internet, and electricity to keep your remote workspace going.
2. Supplies
What tools will your team need to succeed? Will they require Microsoft 365, an email marketing tool, Slack, a CRM, or SEO software? If you have a physical office, will you need to restock your breakroom with coffee, tea, snacks, and juices? These are types of monthly expenses you’ll need to consider when it comes to supplies. But keep in mind that these monthly costs are in addition to the one-time fees you’ll have to pay for certain supplies like laptops, headsets, and desks that you may give employees.
3. Marketing
Every business needs good marketing, and good marketing costs money. For any given month, you may pay for advertisements, copywriting services, flyers, press releases, feature stories, and influencers. All of these things can be expensive if you want high-quality work. You could easily spend over $1,000 per month, and that price can get even higher if you work with a marketing agency.
4. Insurance
When you become a small business owner, you may need to invest in insurance. Although it can seem like an unnecessary business expense, insurance can protect you from financial liabilities and help you overcome work disruptions, natural disasters, and lawsuits.
There are different types of premiums you can buy. The most common are commercial property insurance, general liability insurance, errors and omissions insurance, and workers compensation insurance. You may find it beneficial to get multiple, but the number of policies you have will depend on various factors like the kind of work you do and the size of your company.
5. Payroll
When you have people on the payroll, you’ll have monthly expenses no matter what, and there are many reasons for this. The first one is the most obvious: you’ll have to pay employee wages, and those wages can include the costs you incur for taxes and insurance premiums.
The second reason is the little things you may not consider like commissions, bonuses, reimbursements, and employment taxes. Another reason is travel. Whether you’re taking employees to a trade show, a client dinner, or a manufacturing site, you’ll need to pay for food, transportation, and lodging.
6. Inventory
If your company sells physical goods, you’ll need to replenish your inventory often. This is especially true if some of your products have a shorter shelf life. Maybe you sell food, drinks, or natural remedies. In these cases, you may have to restock your inventory every month to maintain a fresh selection.
7. Website
It’s essential to have a great website. Ideally, you want it to look clean, professional, and inviting. You also want it to work properly—it should be easy to navigate and make your products, services, hours, and contact information clear.
Fortunately, this is easy to achieve with website building and hosting platforms like Sqaurespace, Wix, Weebly, and WordPress. You can use any of these options, but they require you to pay a monthly fee unless you pay everything upfront.
Create a solid budget
The monthly costs of running a business may seem intimidating, but you can make the necessary payments if you create a budget. Understanding your expenses and how much you want to spend for each will help keep you on track and prevent you from overspending. That way, you can afford to make your company’s monthly payments. So don’t stress out too much. As you start building your business, take time to create a budget that accounts for all your monthly expenses to ensure they get paid.