Budgeting and expenses for small business

Many new business owners or business people in the beginning stages of starting their own business do not realize just how many expenses there are when you are your own boss.According to a recent release from a market intelligence firm, the top expense of a small business is the cost of health insurance.Behind that cost are the costs of an internet connection, cell phones, energy costs, advertising, accounting services, voicemail, financial planning services and collection services.Most of these costs are not the first ones that a new small business owner factors into the budget.

The fact of the matter is that business expenses are here to stay and it is your job as the business owner to find the best way to budget what resources you do have.The best way to start budgeting or to take back control of your expenses is to use a cash flow planner.A cash flow planner can be as simple or as complicated as you decide to make it.A cash flow planner is really just a journal or a log of what money is leaving your business and what money is coming into the business.There are various categories of expenses that you may have.One expense that is hard to swallow while you are in the early stages of being a business owner is the cost of paying your employees.Paying multiple salaries is a big expense at first, especially if you include things like employer assisted health benefits into the mix.There are definitely ways to make sure that you budget in such a way that these important benefits make their way into what you offer for your employees.You can definitely search around to find out what the going rate for health insurance is.Find out what the monthly premiums are and see if you qualify for a group discount (some small business owners will not qualify, as the number of employees needed to qualify for group rates is generally larger).On the same topic of benefits, another expense to budget for is your portion (the employer's match) of the employee's IRA contribution.Even if you are a small business of one, do not neglect the importance of saving for your retirement.Other expenses that you will need to include when you have employees are the payroll taxes.Unless you plan to pay your people not as employees but as 1099 workers or contracted work, you will be required to pay the employer's portion of the payroll taxes.

So what if you are a small business owner who works out of a home office and doesn't have any employees?You may be thinking that this whole budgeting for expenses business does not apply to you right?Wrong!It takes money to make money.You will need to not only invest in the success of the business by purchasing supplies and paying for services, but you also need to invest in yourself.You need to budget for the training and certification that you need to receive in order to maintain a competitive edge in the industry.There are only so many things that you can teach yourself.Additionally, you may want to become a member of a group of business owners or subscribe to a magazine.This is going to cost money as well.And that home office of yours is costing you additional utility costs, internet costs, material costs, etc.

Marketing and promotion can be a significant initial expense that you have as you are trying to get the word out about your business.Experts suggest that you budget at least $5,000 to $6,000 a year for marketing and promotion alone.Commercial insurance, corporate income taxes and professional services are a few more expenses to budget for.Not to mention the payments you will have to make on the business loans that you will undoubtedly need to take out in order to cover all of these expenses that you are trying so hard to budget for wisely.