(Guest Post by Camille)
So you’ve got a great idea for a new small business. Perhaps you want to start the next hot restaurant, open up an office offering professional services in a field you currently work in, or take over an existing business. Either way there are many costs that you may fail to think about in setting up your business. These items range from small business insurance to the cost of printing marketing materials. Here are some of the more easily forgotten but difficult to avoid expenses in setting up your business.
City, County and State Fees and Taxes
Depending on where you set up and what kind of business you run you will probably incur fees from your local city and/or county. Many of these fees are required before you can even open or start a new business. Many cities and counties require new businesses to register. If you are using a name for your business other than your own name or the name of your formal company structure, you will probably have to file a fictitious names registration, which will incur a fee. Many small business premises, such as food service, restaurant, bar or other establishments where people will gather may require an inspection by the health department. Businesses in areas such as food service or the building sector may need a license to operate their business, and it is often a requirement that the small business owner or operator undergo a certification test to verify the knowledge.
Company Liability Insurance
Many people starting a small business neglect the need for liability insurance. And those that think of it consider it only in the case of slip and fall type accidents in restaurants or stores. But even if a business is a one-person show operating out of a home they may still require some kind of company liability insurance. This may cover visitors to the home, but also things like professional liability, in the case of an accountant or marketing consultant, or even product insurance, such as someone who wants to sell homemade jams at the local farmers market. This kind of insurance covers the business’s liability should someone else suffer from the professional advice given, such as an accounting error made by an accountant, or as a result of using the business’s product, such as eating the homemade jam and then getting sick. Take a look at this site here to get a quote.
If your small business intends to hire employees you must also make allowance for payroll taxes. Many states and even counties and cities levy taxes on businesses based on their total payroll. This amount is in addition to the taxes that are taken out of your employee’s wages each pay period. In addition to local taxes you must make allowance for federal taxes such as Medicare and Social Security, which are also levied based on payroll. According to the Small Business Administration many small business owners forget that paying themselves creates a payroll for the business and may mean there is a need to pay various payroll-associated taxes.