Creating a thorough and detailed budget for your business is crucial to your survival in the industry. In small business, budgeting is an even more essential step to success. The concern with budgeting is that you don’t always think of everything that could cost the business.
One out of control situation could throw off all of your financial planning if you don’t plan for the right expenses. Take a few moments to enlighten yourself a bit, and check out some of the costs you may not have anticipated while formulating your annual budget.
Air conditioning mechanical issues
You never know when the air conditioning unit in your office may fail or have trouble functioning properly. You need a skilled air conditioning specialist to fix the issue properly, and that costs money which may not have been included in your contingency plans.
Don’t make the mistake of leaving out crucial maintenance and upkeep around the office, so your finances can continue flowing with ease.
A high employee turnover rate
It’s hard to plan for a month or quarter when your business experiences an abnormally high turnover rate. When that occurs, the cost of scouting new talent, training, and rebuilding the stable operation you had can be intense.
Every budget should have a contingency plan, but make sure yours is healthy enough to cover an unexpected event like turnover. Even the best employees change jobs on occasion.
The cost of several different insurance policies
You can’t run a business without insurance. As a matter of fact, you can’t run a business without several different insurance policies. There’s so much legal responsibility involved in running a business that insurance is vital for the safety of what you have built.
If you’re not sure which insurance policies would best benefit your operation, take a look at this short list of some of the most crucial types of insurance for business owners.
- Workers’ compensation
- Product liability
- Professional liability
- Property insurance
- Commercial auto insurance
Communicate with all departments
While you’re formulating your annual (or monthly) budget for your business, you need to make a grand effort to include the input of every department on the payroll. Your business has many different facets, and communication will help build the best financial plan for the future of those different elements.
Never forget the cost of taxes
You know the old saying. “Nothing is certain in life but death and taxes.” You need to budget for the taxes due to the government, or they’ll simply force the money from your pockets. It’s much better to avoid trouble with the institution, and simply pay your business taxes with reliability.