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Asked a question 3 years ago

What are the hidden costs involved in starting up a new business?

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Costs and expenses of business is that aspect that every entrepreneur should consider. Preparing budget can help entrepreneur but there can be many hidden costs involved in running business operations that  can affect the financial resources of the firm. So every entrepreneur should take into account hidden costs and expenses before starting business. Following are some hidden costs that entrepreneur should know :

1. licenses - cost of obtaining licenses and permission from government authorities to start a business must be accounted by entrepreneurs. It may also involve renewal of license costs for continuously carrying out business operations 

2. Loss of inventory - entrepreneur should consider cost of inventory loss at any point in Business. As this costs is usually ignored by entrepreneurs it can cause losses to business due to short fall of required inventory with supplier, damaged goods etc. 

3.cost of professional services - many professional services are needed by entrepreneurs to conduct business like legal, auditing fees. Hiring experts for their services can be costly affair. 

4.perks and benefits for employees - in order to keep employees satisfied and interested in the firm an entrepreneur should not only give them salary for their contribution but also provide other benefits like health insurance, paid leaves etc. 

5.delay in payments - delay in getting payments from clients and customers can affect the firm financially. 

Hence such costs and expenses should be taken into consideration by entrepreneurs before going a ahead with new business venture.