Especially when you’re starting a new business, it can be all too easy to overlook some expenses as you budget for the year ahead. Sometimes these expenses get neglected because they only occur once a year, or sometimes they’re expenses that you may not incur until your business starts to see some growth. Take a look at five budget line items that belong in your budget.
When you’re starting your business, you’re unlikely to have the resources to begin hosting clients at lunch or buying them drinks after a weekend seminar. As your business grows, it’s time to set aside a portion of your budget for hospitality expenses. Sitting down in a non-office environment can provide opportunities to make personal connections with clients that no standard meeting affords, and thank-you gifts after completing a project or at the end of the year send a positive message about your working relationship. Talk to your tax advisors about how to handle these expenses on your taxes.
Did you think you were finished with legal expenses when you completed your initial startup paperwork? Think again. No one plans on being sued, but it can happen, and it’ll be easier to handle if you have a legal team already on retainer or a budget line item already allotted to pay your attorneys. You may also want to seek legal advice when it comes time to expand or if you need to purchase intellectual property. Talk to the attorney who helped with your startup to get an idea of how much to budget.
Employee Training Expenses
As a startup, you probably didn’t have many employees €” if you had any at all. As your business grows, however, you’ll start to bring in employees, and you want them to represent your brand, your products and your services accurately, especially if they’re in customer-facing positions. Even if you’re not yet ready to establish an HR or training department, you may want to budget for consultants who can come in to handle tech training or help you establish procedure manuals.
Renewal of Licenses and Certifications
Take a look at your startup work to remind yourself of all the various licenses and certifications you had to establish to get your business going. Chances are those all need to be renewed annually. If you can, see if you can spread them out so you don’t take a big financial hit all at once. Another once-a-year related expense is that of dues for professional associations that you belong to.
Your Own Salary and Time
As an entrepreneur and small business owner, you may feel a bit guilty about taking money out of your business in the form of your own salary. You may think that you should roll all income back into the company to keep it afloat and help it grow. But don’t undervalue your own contribution. While it’s laudable that you think about your employees’ well-being enough to pay them when you’re not taking a salary yourself, you shouldn’t underestimate the value of your own sweat equity. Write your own salary into the budget to make a statement about your value to the company. Doing so also lets you see clearly whether the company is really on a firm financial footing. When you pay attention to every line item in your budget, including expenses like these that so often go overlooked, you prove your own worth as a small business owner.