Posted: 25. October 2019 by: Rupert Tennant

Hidden Business Startup Costs

It’s known and kind of obvious that you need to spend money to make money and that a small business needs to be started with an initial investment. However, some of these expenses and these investment costs are often overlooked and forgotten.

They often add up and can make a big problem for a small business owner that’s facing a lot of competition in the early stages of their business. It’s important to do your research and put some money aside for these costs before they arise.

Licenses and fees

The first things most businesses need to pay for are the licenses and fees needed to start running the company in the first place. These are often local since they are related to the property and the tools needed to run the company and their safety.

There are a few things to take into account besides the price of these fees, and that’s the time and effort that goes into obtaining the licenses. The government isn’t really known for doing things quickly or simply, and you’ll have to wait until you get the proper documents before you’re able to start your work in the first place.


This is the problem that happens with retail businesses alone, but it’s a big one, and you’ll need to both address it directly and be prepared for the cost that will come up by not being able to handle the problem in its roots.

Shrinkage refers to the loss of property of retailing businesses that comes from losing the property, damaging it, or it being stolen during the shipping, moving and storing process. There are systems that could be put into place to mitigate this, but it will remain a problem, and you’ll need to pay for it.

Cost of employing a staff

You’ll need to hire a team if you want your business to grow and expand. The cost of the employees will be the most important cost you need to bear as a business owner and that will be the most important investment as well.

There are other costs to have in mind beyond the mere costs of the salary. There are also taxes and national insurance contributions, but beyond that, there are also costs of managing and finding staff in the first place. All of these should be considered ahead of time.

Membership in business organizations

There are business organizations that are made to link together companies and individuals working in the same industry or field of work in general.  These organizations play a big role for small businesses because they allow for a platform for small companies to work together.

The memberships in themselves can be costly since there are fees and subscriptions to join these organizations. There are other costs as well, such as the travel and management cost that come up when these relationships need to actually come about and become something real and profitable.


A small company needs to be marketed from day one. That’s the only way for the business to find its way in a crowded market and pretty much every market these days is crowded in a way. This doesn’t have to be an expensive endeavour, but it needs to be planned one and the one that you’ve thought through.

It’s also important that at least a portion of the marketing effort goes towards the industry itself and not to the general public. These marketing efforts are less costly, but they are often more difficult to produce and can be more lucrative in the long run.


Most businesses are aware that they need to pay taxes, and this expense is something they usually prepare for, but it’s the accounting costs that take them by surprise. That’s partly because the cost of the accounting service isn’t low since they are high-end professionals.

At the same time, if the company tries to do this work on their own without the help of the accountant, it may be a source of an additional problem since this will take up a lot of the time and effort that otherwise could go towards something more useful.


There are many hidden costs of running a business, and they are overlooked by the company when it’s still young. These include accounting, licenses and fees needed to start a business in the first place and the cost of marketing a company. There are also costs of shrinkage for retail businesses.

The business needs to prepare for this cost, and it needs to be prepared for a few unforeseen expenses as well. That’s the best way to keep your business going while it’s young and when small expenses could really disturb it or even shut it down.