When you start a new business it’s a top priority to carefully manage the cash flow and keep the outgoings to a minimum. However it must be said there are some things you just should not cut back on. So here is our four expenses that you don’t want to cut back on:
Insurance is a must have item for most businesses. The cost of insurance is relatively low compared to the risk you run of not having it.
The most common form of insurance is public liability insurance. This type of insurance covers a business if a customer or member of the public was to suffer an injury as a result of your business activities. If you run events, have a shop or conduct a type of business outside this is essential and often if you are working with other companies they will insist on you having this.
You should also consider employer’s liability insurance if you take on employees, which protects employees due to illness or accidents at work.
The third type of insurance to consider is professional indemnity insurance. If you are a professional such as a solicitor, project manager or consultant this cover will meet the cost of claims against the business for negligence.
Failing to seek legal advice can provide to be a very costly mistake later down the line. If you are planning to obtain a lease then make sure the solicitor has looked over it for you.
Also if your business is going to be set up as a partnership make sure you have a solicitor draw up a partnership agreement which is singed by all parties. Failing to have an agreement in place can because problems for the business if the partners have a disagreement of one partner wished to leave.
Marketing can be a giant money pit if you are not careful. Many companies start out with a shoe string budget and do not allocate anything for marketing. As a result the business growth rate will be at a much slower pace and can even increase the chance of business failure.
When preparing the budgets make sure you allocate a budget to marketing from the get-go even if it’s small.
Marketing can be expensive if you don’t get a return from it. So put a budget together alongside a tailored marketing plan and away you go!
If you are a small sole trader with little to no expenses then it can be easy to do this without the aid of an accountant. If on the other hand you are setting up a limited company or a partnership it is a good idea to get an accountant from the beginning.
This means that they can advise you on the recommended methods to do your bookkeeping, keep you up to date on tax deadlines and ensure your business is running smoothly from a financial perspective.