Entrepreneurs are usually eager to obtain funding and to launch a business as quickly as possible. However, when planning the operations budget, it is important to carefully consider all major expenses that will be needed to finance the company effectively. Major costs include employees, product development, and other operation costs. However, auxiliary costs cannot be overlooked to ensure that your business has everything necessary for a full-scale launch and to run daily operations.
Utilities and Internet
Although some rental and lease agreements include monthly utility fees, many do not, or they might not include all utility expenses. Heat, air conditioning, phone service via a landline, trash collection, electric, and water bills must be budgeted for in order to ensure that they are paid on time.
Additional but related costs, like water purification systems, water coolers, seasonal humidifiers, or a building or office security system, should be factored into monthly expenses. Parking might also be billed separately from the rental fee. Some companies take small but effective measures to save money, such as keeping an emergency power generator and replacement light bulbs on hand.
Cleaning and Maintenance
Office buildings are typically cleaned at least three times per week to remove dust and debris. Cleaning services that include dusting, vacuuming, mopping, window washing, and scrubbing restrooms are necessary for running a business. Maintenance could include keeping walkways and parking areas free of debris year-round with snow removal in winter months.
Unless on-call maintenance service is included with rent or leasing fees, part of the operating budget should be allocated to potential plumbing problems, HVAC repairs, and other basic building repairs or replacements, like for a broken window or a damaged fixture. Replacing worn or damaged carpet, or possibly fraying draperies or a broken window blind, should also be covered in this budget item.
Although some employees might be able to use personal cell phones and laptops or iPads for work, an employer should not count on that. Routers and modems are essential, whether for personal PCs or for company-provided equipment. Technology expenses should be a fixed line item in a business budget. IT service, website maintenance and updates, and software upgrades should be factored into the budget because they will be needed periodically.
Printers and copy paper, a fax machine, and a scanner can be purchased in an all-in-one style, but any of these might need to be repaired or replaced occasionally. A service plan or an extended warranty generally comes as a separate price item, along with auxiliary items like a power cord, a mouse and mousepad, and a screen protector.
Various types of insurance policies may be considered to cover different aspects of your business, including health insurance or life insurance policies for employees. Those aside, your company’s building will need to be insured, although that cost might be included as part of a flat rental or leasing fee.
Insurance to cover damage to or the loss of the company’s equipment, furnishings, and files is essential. Liability insurance in case an employee is injured on the company premises due to negligence should also be considered. Insurance for identity theft and cyber hacks of sensitive documents is becoming more widespread. Some companies also take out an umbrella policy to cover any policy gaps.
Supplies And Office Expenses
There are many different areas of supplies and general office expenses:
- Marketing and advertising. There are key costs in running a business, whether you choose to advertise through digital or traditional marketing strategies.
- Website hosting. This expense along with social media costs in terms of employee time and higher-level membership subscriptions also play a role in the budget.
- Common office supplies. This includes things like postage, stationery, pens, printer cartridges, file folders, paper clips, markers, whiteboards, and storage units will be needed.
- Hospitality expenses. This includes entertaining clients, business club memberships, office parties, and holiday bonuses.
- Company culture. Break room supplies, training videos, easels for presentations, and office décor are also common expenses.
- Flowers for special occasions. Flowers for an employee’s wedding or a relative’s funeral may be included in an employee care line item.
- In-house or external printing costs. You may need to print company manuals or promotional materials, as well as signage for the company and parking areal.
While it is nearly impossible to determine at the outset of your venture all the possible costs that must be planned for in a budget, it is helpful to look at similar company budgets online or at peer organizations’ budgets to get ideas for planning purposes. An emergency fund is a good idea, along with a slush fund for unplanned expenses. You can almost never set aside enough funds to cover all contingencies, so it is best to plan broadly and in-depth to avoid financial shortfalls.
Refined Impact believes in helping to prepare your business for the challenges it comes across in the digital realm. We have made it our mission to focus on the digital aspect of your business so you can concentrate on all the rest. If you want to know more about how Refined Impact can partner with your business, contact us today!