Your business will need to be the best to survive. If you do not want your company joining the 25% of new businesses that fail in the first year, you will need to carefully plan and implement your business. The first step to business success is to do what you’re doing now. Research every aspect of your company, so you can create a killer plan that will give your company a fighting chance. This article will help you identify some unexpected expenses that you should plan into your budget.
Business insurance, while not a priority, should be considered. When you first open your business, you may be incapable of paying the monthly premium. At that point business insurance might hurt your company more than it will help. Once your company becomes successful, you can benefit from business insurance. When a careless teen drove their car through my grandfather’s window, the fact that he invested in Dallas business insurance meant that the insurance agency paid for the repairs and the lost revenue. By investing in business insurance, your company can be protected from monetary costs of building damages, liability lawsuits, and equipment malfunctions.
Your company may need to apply and pay for a license or permit. License or permits gives you permission from the state or federal government to operate regulated business or sell regulated products. Whether or not your will need to apply and pay for a license or permit will depends on your business and your geographic location.
You will need to apply for a federal permit if your business
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Manufactures, wholesales, imports, or sells alcohol.
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Imports or exports animals, animal products, biotechnology or plants across state lines.
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Operates aircrafts, transports goods or services with aircrafts or helicopters, or maintains aircrafts
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manufactures, deals or imports guns or ammunition.
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Involves any wildlife activity
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Involves mining or drilling
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Involves broadcasting radio or television.
On top of federal permits and license, you should check to see if you will be required to apply for any state licenses. You can check out your state regulations here.
When planning your budget, you should take into account any business taxes that you will owe to the federal government. The taxes that you will need to pay depend on how your business is structured and what your business sells, manufactures, or deals in. Whether you are the sole proprietor or involved in a partnership, you can locate what taxes you might need to pay here.
You might need to pay:
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An annual income tax as you earns money from your business throughout the year.
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A self-employment tax which is the business owners’ version of Medicare and Social Security taxes.
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Employment taxes if you have employees. You are responsible for withholding your employees’ social security and Medicare taxes. You will need to deposit the employment taxes for them.
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Excise taxes if you manufacture or sell certain goods, operate certain kinds of businesses, or use various kinds of equipment or products.
The last unexpected expense that you should be prepared for is any renovations that your premises required. Many buildings will need work before you can begin working from that establishment. Before you commit to lease or purchase a building, you should determine how much work the place will need before you can open your business. Some common renovations that your establishment may need includes wiring for electricity and internet, touching up the paint job on the walls, and replacing the old carpet or tile. Remember that the cost of renovations will include both the material and the labor.
Owning a business is a hard, grueling, and exhausting path, but it is a path that can eventually lead to great rewards. In order to reach that goal, you should plan every aspect of your business. After all failure to budget yourself correctly, could lead to bankruptcy before your company can reach its full potential.
—-This guest post is courtesy of Allen Grove