After taking the leap and launching your business, you may have that incessant nagging feeling that there's something you've forgotten to take care of. You've most likely meticulously planned your product or service offering, marketing and financial projections, yet there can still be hidden costs lurking in the shadows.

These expenses can quickly eat into profit and derail even the most airtight business strategy if you've not prepared a plan to cover them.

Don't fret, as we've covered everything new business owners commonly forget, so you can put all your attention on growing your business. This article will delve into the 6 essential expenses that new business owners often overlook to help you create a more comprehensive budget.

1. Comprehensive business insurance

To protect your business from unforeseen circumstances, it's important to take out insurance with companies tailored specifically towards small businesses. Even if you operate a small business, work from home or don't interact with customers daily, accidents can still happen. A customer might trip on your premises, a product could cause harm or a service you provide might unintentionally lead to damage.

Public liability cover in Victoria helps cover the legal fees, compensation costs, and other related expenses, so a single incident doesn't put your entire business at risk. Business owners often use it to protect against any claims made from bodily injury, physical theft or other kinds of personal damage that could be attributed to their business. Professional indemnity insurance is also there to help cover expenses and legal costs associated with clients or customers who might feel the service you provided did not meet expectations or deliver the promised results.

Cybersecurity insurance will come in handy if you are handling a lot of customer data, and property insurance is necessary to protect the workspace and objects inside if you require a physical workspace - be it a customer venue, office, warehouse or something different.

2. Legal compliance costs

It won't come as a surprise that there are certain rules businesses need to comply with, but what exactly these include can be a mystery for new business owners.

The most likely first compliance cost you will encounter will be your permits and licenses. The licenses required will change based on industry and business structure: whether you're opting to start out as a sole trader, partnership, company or trust.

Tax registrations and filings, such as registering for GSR (goods and services tax), will need to be addressed to ensure you comply with regulations and avoid (usually financial) penalties. Though these administrative duties are primarily time-consuming, there are costs involved in acquiring some of the necessary certifications, so don't forget to factor these into your business budget.

3. Professional fees

It's important to understand the basics in setting up a business, but it's also good to know when to ask for help. Administrative or accounting errors can cost a business big money down the line and even get you into legal trouble, so it's important to address areas you're not completely confident in as soon as possible.

You may still have questions about business structure and set-up, and even if you know what you're doing, it's still advisable to consult a legal professional so you can be sure you've not missed anything.

A lawyer is useful for providing advice about business formation, contract review and intellectual property protection, to help save you from expensive mistakes now and in the future. With an accountant's expertise to help manage finances, maintain accurate documentation and bookkeeping, and assist with your tax return at the EOFY can make sure your business complies with legislation, but also avoid unnecessary costs. HR professionals can help navigate salary payments, recruitment and other 'human' aspect management tasks. Working with experts will cost you now, but efficient financial management can save lots of money in the future, so make sure to utilise this valuable resource.

4. Alternative marketing and promotional costs

While you may have already delved into the world of traditional advertising methods for your business, such as print ads, local sponsorships and basic digital reach, there are other effective marketing methods often overlooked by emerging entrepreneurs.

Your digital presence is crucial for attracting and retaining customers and is often the first impression someone will make about your business. It's important to maintain it and keep it updated so that all your offerings and promotions are current. Budgeting for these maintenance expenses is essential, but easily overlooked.

Next, you'll want to consider digital marketing strategies to help boost your web page rankings. Exploring SEO (search engine optimisation) and SEO mistakes can make a big difference, as it will help your page show up first when potential customers search related key phrases on Google and other platforms. Competitors will most certainly have invested in SEO, meaning their websites will be suggested first, therefore making you less likely to reach consumers if you miss this crucial marketing step.

5. Technology investments

To power your operations, you'll need to budget for computers, software licenses, POS (point-of-sale) systems and other electrical and tech tools necessary to run your business. These services can be costly, so shopping around can save you in the long run. Keep in mind, if you go too cheap, this may also cost the business in repairs or replacements, so do research into the most cost-effective solutions.

Investing in a stable, secure and reliable internet connection is vital for communication, online transactions and using cloud-based services. If you want to show examples of your work, it will make a poor impression if it takes too long to fetch them due to a poor connection. If you're unable to join virtual meetings with clients or investors, you could miss out on vital growth opportunities. Make sure your WiFi connection and bandwidth are strong enough to meet the demands of all the devices using it, which could be considerably more than what you're used to for personal household use.

6. Unexpected expenses

Unexpected expenses are those that come out of the blue and catch even the most prepared business owner off guard. However rigorous your strategy or tight your budget, these costs will inevitably crop up from time to time.

Having room in your budget for emergency expenses can save you from taking out a short-term loan with extremely high interest rates that can easily cut into profit. Your emergency budget should include enough to cover factors such as possible inventory fluctuations due to potential understocking, emergency electrical or plumbing repairs, or sudden employee illness. Even the best technology and hardware will occasionally require equipment repairs and maintenance, which is another large expense to stay prepared for to make sure you're always staying cash-flow positive.

Finally, make sure your business keeps up with legal and regulatory changes both in your industry and nationwide, so you can stay informed about potential reforms that may impact your business model or operational costs.

Key takeaways

This article should have prepared you for the essential expenses that can be easy to forget to budget for, but make sure to keep assessing your business needs over time. Your business can fluctuate, so keeping on top of your ongoing, unexpected and emergency costs will make all the difference as a new business owner.

This information is of a general nature only and should not be regarded as specific to any particular situation. Readers are encouraged to seek appropriate professional advice based on their personal circumstances.