Starting a business is exciting. In fact, it’s so exciting that companies often overlook the common business costs in their monthly budgets. Budget awareness is one of the most important aspects of running a company. Monitoring even the smallest costs is essential to fulfilling the business’ full potential.
Here are some common business costs SMBs sometimes ignore.
Website Hosting Costs
Your business is going to have a website. If it doesn’t have one already, it should. Many companies use a website hosting service for their business because it’s a great way to ensure their online store is both well designed and easy to use. However, many small business owners often forget to include the website hosting cost into their budget because the outlay is usually so small.
Typically, the rate for using a website hosting service is around $3-$10 per month. Although it seems insignificant, all expenditures eventually add up. You want to make sure you include even the tiniest costs into your budget to ensure the best ROI for your brand.
Many underestimate how high costs of acquiring clients can be. Regardless of how you decide to market your company, you’re going to have to spend money to make money.
Whether you’re paying to obtain clients or to get brand awareness. You’re doing this in hopes of getting more foot traffic and increasing your ROI. This can seem daunting because businesses often have to take large financial risks when marketing their company. However, there are definitely things you can do save money while doing building your brand awareness.
A good rule of thumb to use when budgeting marketing spend is spending three times what it would cost you to be in an office. Once you figure out your needs and what you’re currently paying, you have to understand how much money you can spend on each lead or sale. For example, if you make $500 off of each $5,000 loan and you end up with a business that takes out four loans over two years, you know that your client is worth $1,000 in annual profit to your company.
With this knowledge, you have to decide how much of that profit you’re comfortable giving back to your client. If you decide on 25 percent per year, for instance, that means you can afford to pay $250. Similarly, once you know what you’re willing to pay for a client, you can choose how many clients you can afford in total.
Keep in mind when working with clients that there will also be networking costs. Negotiation meetings like lunches end up being a pretty large cost to your company when it’s hard to catch clients. If this is the case, try to budget for the amount of client lunches or in-person meetings your business can afford. You can then plan to conduct the rest using Skype interviews, conference calls and etc.
Marketing Material Costs
Besides website hosting, client, and networking costs, entrepreneurs often overlook small fees that fall into their monthly budget like marketing material costs. Things like making business cards, T-shirts, or company photographs can sneak into the mix and end up impacting your budget a lot.
Although it may seem daunting, creating a smart budgeting plan is the best way your company will work flexibly and comfortably. If you cover these common business costs SMBs sometimes ignore in your budget plan, your company is more likely to be up and running at peak potential in no time.