10 Hidden Business Expenses and How to Finance Them

by / ⠀Startup Advice / April 30, 2013

Many people dream of owning their own business. While being your own boss (and the boss of others) certainly has its perks, it also has its downside. Like Uncle Ben told young Spiderman, with great power comes great responsibility.

As the business owner, you are responsible for all costs of running a business, including payroll, insurance, marketing and even just keeping the power on. I know what you’re thinking: anyone who opens their own business knows, or at least should know, all of this already. However, there are several unpredictable or unexpected expenses that many fail to anticipate.

Before starting your own company, it’s important to be aware of the following hidden costs that business owners often overlook when creating their business plans:


Depending on the industry that you are in, you may need a license or a permit in order to conduct business. Business license requirements vary by state, by municipal area and by industry, so it is important to research all licenses you will need, how much they cost as well as renewal policies and factor these expenses into your budget. Proper licensing can be a higher expense than you may think. For example, depending on the state you are in, a liquor license can be a few thousand dollars. Particularly if you are planning on expanding your business to new locations, it is critical that you take licensing fees into consideration.


Legal proceedings are not cheap. If you take the time to have contracts written and put together employee paperwork properly from the start, you may save yourself thousands of dollars down the road. It might be a good idea to hire someone to ensure that these documents are done correctly. Not to mention, if you are starting a business, it might be wise to seek legal advice when deciding whether to incorporate or to set up an LLC. But we can save the distinction between the two for a later post.

Office Supplies

By office supplies, I’m not just talking about folders, pens and paper (although, the costs of these types of products do add up quickly, especially as your company grows). Office supplies can include anything from desks, chairs, paper goods, kitchen appliances, water coolers, lighting, and cleaning products. Basically, all the things that keep your employees happy and able to do their jobs.


Long gone are the days of Mad Men, where all you needed was a secretary with a typewriter to get the job done. Today, every employee usually needs a computer with at least one monitor, access to a printer and a fax machine, and an internet connection with a business email account. Even if your business does not take place in an office setting, you will still need to stay current on the latest technology trends in order to compete with the leaders in your industry. For example, many restaurants are converting from their traditional paper menus to electronic versions viewed on tablets or iPads. Businesses that are unable to adapt to technological advancements are often left in their competitors’ dust.


Just because there is a high unemployment rate does not mean that good talent is easy to come by. In fact, the opposite is true. Because of the tough economy, there is a lot of competition for attracting and holding onto top talent. And that may mean having to shell out more than you want to in terms of salary. At the end of the day, you need to decide if a candidate’s experience and skill set is worth the price.


Often, business owners hold-off employing a tax service until April rolls around; however, this may not be best practice. Business taxes are very complicated and I do not recommend that any business owner should attempt to file alone (unless, of course, they have had prior, professional experience doing so). While high quality tax services can be expensive, a mistake on your tax filings can be even more costly.

In addition to paying these taxes, you should take into consideration that you will be paying for 100 percent of your Social Security. When you have an employer, they cover half of your FICA contributions. But as your own boss, you will be responsible for all of your Social Security.

Company Liability Insurance

Contrary to popular belief, company liability insurance is not limited solely to covering the occasional slip and fall accident. Even if your business is a one-man operation, working out of a home office, it still might be a good idea to have some kind of company liability insurance. This covers anything from visitors to your office (or home, if that’s where you are working from) to professional liability to product insurance.


Your business may offer the greatest thing since sliced bread, but if potential customers don’t know about your products or services, how do you expect to make any money? As Henry Ford once said, “A man who stops advertising to save money is like a man who stops a clock to save time.” Marketing your business is a critical component to success. Regardless of if you simply need promotional materials for a small, local campaign or if you have your sights set on a much larger media campaign, advertising takes money.

Growth Opportunities

Most, if not all, business owners dream of growing their business empire. Often, this takes strategic expansion plans, but sometimes a growth opportunity may present itself unannounced. In order to capitalize on these opportunities, it is not uncommon for your business to require a sudden influx of capital. While I don’t advise you to account for this in your budget, it is important to be aware of ways in which you could secure business financing in case an opportunity presents itself.


It’s Murphy’s Law: if anything can go wrong, it will. Similar to growth opportunities, it is hard to budget for unforeseen circumstances, but when an emergency does occur, you will need capital in order to rectify the situation, whatever it may be.

Business Financing

So, what happens when you don’t have enough capital to cover these expenses? As you may have read in the news or have experienced first-hand, it is getting harder and harder to secure business financing from traditional lenders. But, just because you were denied a loan from the bank does not mean that you need to tap into your personal finances or borrow money from family and friends (which is never a good idea).

The infographic below illustrates two popular alternative business financing options, short-term business loans and merchant cash advances, available to business owners who have been in operation for at least six months. Even though these financial solutions may not help with initial start-up costs, they can become a business-saving option when you are in need of a sudden influx of capital down the line. And while I may be biased (full disclosure – I work for Business Financial Services and we created this infographic), I think that this does a great job at explaining the differences between the two options and how to determine which one is right for your business.

Real Business Needs, Real Financial Solutions – An infographic hosted at Business Financial Services

Regardless of how you fund your business needs, it’s important to realize that sometimes it takes money to make money. And, just because the bank fails to lend you the capital you need, there are still financing options that are available to you.

Did I leave something off my list? Please share in the comments below any expenses that your business encountered that you wish you had anticipated.

Christina Memorio is an SEO Specialist at Business Financial Services. Her content covers a broad spectrum of topics relevant to small business owners, from financial advice and alternative funding solutions to social media and content marketing practices for SMBs. In her spare time, Christina loves to cook and is a die-hard fan of the Florida Gators. Connect with Christina on Google+.

Image Credit: Shutterstock.com

About The Author

Matt Wilson is Co-Founder of Under30Experiences, a travel company for young people ages 21-35. He is the original Co-founder of Under30CEO (Acquired 2016). Matt is the Host of the Live Different Podcast and has 50+ Five Star iTunes Ratings on Health, Fitness, Business and Travel. He brings a unique, uncensored approach to his interviews and writing. His work is published on Under30CEO.com, Forbes, Inc. Magazine, Huffington Post, Reuters, and many others. Matt hosts yoga and fitness retreats in his free time and buys all his food from an organic farm in the jungle of Costa Rica where he lives. He is a shareholder of the Green Bay Packers.

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