FINANCING & BUDGETING • February 26, 2015
3 minutes Read
Starting and running a business, no matter how small, involves out-of-pocket expenditures. They can be relatively low, or very high, such as you would typically face when starting and/or running a manufacturing facility. But the expenses will be there, and if you don’t consider them when developing your business plan, your business might under perform.
Below, you will find a list of some common small business expenses. There will be some that you might be tempted to ignore if they represent part of your non-business expenditures, and others, such as consumable office supplies, that don’t appear on the list. But you can use this list as a guideline for developing and evaluating the cost of running your business.
Equipment and vehicles
Depending upon the nature of the business, you may have to obtain specialized equipment and/or provide vehicles, all of which incur their own specific expenses.
Maintaining the right inventory level is always a gamble, particularly in the case of perishable materials or specialty items. There is a plethora of opinions and formulae by which to determine the level of inventory you stock, but that is a topic beyond the scope of an article like this one. Put simply, proper inventory control is a balance between being able to satisfy your customers’ needs on a timely basis, while at the same time, not tying up all your working capital, and ensuring the integrity and usability of your on-hand inventory.
Keeping track of and control over your business operating expenses is crucial to the business’ success. Knowing within a reasonable range what your expenses will be will allow you not only to function efficiently and profitably, but will also give you a better feel for ways in which you can expand or revise your business to meet future market requirements.
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