6 Unexpected Expenses that Catch Businesses Off Guard | SMB Compass
Ezra Cabrera | August 24, 2019
Underestimating the cost of managing a business is often the most common mistakes that many entrepreneurs make. Business owners take into account the marketing, utilities, and payroll expenses. But they often fail to anticipate unexpected expenses. For this reason, access to fast business loans is imperative for every company.
Related: 4 Reasons Why Your Business Needs Fast Business Loans
Keep in mind that anything can happen when you’re running a business. Successful entrepreneurs are often the ones who are prepared to face anything. However, it’s hard to be prepared for unexpected eventualities if you don’t know what to prepare for. So, here are some unexpected expenses that catch business owners off guard:
1. Insurance
It’s important to create a safe working environment for most, if not all, parties involved in your business. Unfortunately, accidents can happen when you least expect it. Insurance coverage is important to ensure that your company and employees are protected. You may need coverage for employer liability and public liability. It doesn’t hurt to include illnesses, injuries, property, and negligence as well.
One unexpected expense that catches many small businesses off guard is insurance according to Andrew Schrage, co-owner of Money Crashers Personal Finance. You might not think you need it depending upon the business you’re in, but it is a necessity in most cases. At the very least, you’ll need a general liability policy. Other than that, the premium will depend on how much coverage you choose as well as a few other things.
You also might need home-based insurance, property insurance, or commercial auto insurance, depending on your business. Be sure you consult with a qualified business insurance expert to ensure your company is adequately covered.
2. Hiring Employees
Hiring employees is another unexpected expense that can catch a small business owner by surprise. This is especially true if you’ve been working alone in the beginning, which is a great strategy. But you’ll want to bring on staff members to keep operations running smoothly, especially as your business grows and expands. The cost of hiring people doesn’t just include salaries. There’s also the matter of training expenses, benefits if you decide to offer them, and taxes.
3. Licenses and Certifications
The licenses and certifications you may need depend on your particular industry. The requirements for obtaining a business license varies by state and municipal area. So, best you research that. Check with your local municipal office and ask how much licenses and certification costs, as well as the renewal policies. Many business owners think lightly of licensing costs, but many times the costs are higher than expected.
4. Equipment Purchases, Maintenance, and Repairs
It’s your responsibility to purchase and maintain the equipment needed, regardless of the type of business you own. You may need to buy computers, furniture and fixtures, vehicles, and industry-specific equipment to keep your business going. Other than buying equipment, you also need to save money for maintenance . At some point, your equipment will eventually need repairs or replacements. However, be sure you have the budget to cover these unexpected equipment expenses.
Related: 4 Factors to Consider When Buying Construction Equipment
5. Business Growth Opportunities
Small business owners dream of growing their company. And is the case, business growth and expansion require strategic planning. But, there are rare occasions when opportunities for growth will arise unexpectedly. Entrepreneurs may need a substantial amount of money to take advantage of a growth opportunity if and when it arrives.
If an opportunity to grow your business arises, and is too good to pass up, it helps to be aware of the different ways you can obtain loans.
6. Emergency Expenses
The thing about emergencies is you never know when one will happen. Accidents, lawsuit, theft, etc. are often considered as emergency expenses.Budgeting for emergencies can be challenging, but whenever there is one, you do need access to working capital. This way, you can in remedy the situation and avoid thing from becoming too complicated to handle.
Some of these situations can be expensive to deal with. With fast business loans or business line of credit, you have the perfect solution for emergency expenses. You can get access to cash and use it to cover the expenses of these emergencies.
Fast Business Loans for Unexpected Expenses
Unexpected expenses can and will happen, whether you are prepared or not. But it’s always best to be prepared for anything. In fact, you’re always going to find that bracing your business for the worst is one of the guidelines of running a business. Preparing for the worst to come is one of the tips in becoming a successful entrepreneur.
Fast business loans can help fund unforeseen expenses that can otherwise make or break your business. With easy access to cash, you can invest, fund operating costs, and address every need in your business.
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