These Huge Expenses Can Bankrupt Your Start-Up if You Are Not Prepared

Kick starting a new entrepreneurial venture needs much more than an outstanding idea and the determination to turn it into a source of profit. More often than not a start-up also requires a great deal of preparation!  And we can’t emphasize this enough. After all, some numbers suggest that as many as two-thirds of the start-ups fail within two years of their establishment, and close to half of the ones that make it to the two-year mark, never get past their 5th anniversary.

We agree that the numbers are somewhat alarming, but a great way to silence them is by going in with ample preparation, especially on the financial front. It is for this very reason that we are listing down some unforeseen, but significant expenses, which you must take into account before launching your new business. Of course, these will vary in extent depending on the type of business, but they will inevitably crop up, at one point or the other.
  1. Legal Expenses
It is no hidden fact that every business needs a lawyer to deal with various legal matters that may come along the way. While large-scale enterprises need legal assistance right from the formative stage, those of a smaller size might need it at later stages. Moreover, ventures that deal in intellectual properties have an incessant need for legal advisors to ensure the protection of their rights.

As is known to one and all, legal services are often on the expensive side, and since they are inevitable, as a business owner you should be well-prepared to shell it out.

In case you do not have the means to pay legal advisors at every step of the way, you might want to consider getting some upfront documents such as terms of service, sales deeds, and form contracts, right from the internet. This will help you save your valuable financial resources, while also minimising the effort.
  1. Taxes
As evident as it might seem, a vast majority of entrepreneurs tend to overlook the bulk of taxes that they are liable to pay. Hence, they end up making the mistake of keeping the calculations for the last moment, which may inadvertently lead them to spend much more than they truly need to.

To keep your tax-related expenses to the minimum, it is best that you hire the services of an accountant who manages your revenues and taxes all year round. This will help you utilise various exemptions and tax deductions to your advantage, thereby lowering your tax bill. In turn, you will have higher working capital, ready to be reinvested in your business, as and when the need arises.
  1. Funding
Not all entrepreneurs are financially able to fund their business, which is why they apply for Business Loans. While this is one of the most promising ways of getting funds for the start-up, you ought to factor in the interest and the EMI (Equated Monthly Instalment) that you will need to shell out eventually.

Only if it seems viable for you and your business to set aside such a significant monthly payment, should you go ahead and take this loan. While doing so, always consider the operational expenses of the business, as well as you own takeaway, so that your living expenses are met comfortably.

Quite understandably, this may seem to be an overwhelming exercise, which is why you should look forward to using crowdfunding portals towards your financial needs. Not only is it more accessible to raise funds through such portals, but you can also rest assured of getting the required amount at much more attractive terms.
  1. Wastage or Theft
For any business that deals in products, wastage or theft, or shrinkage as it is commonly known, can prove to be one of the most considerable expenses. While you must take all the necessary measures to prevent the same, with the help of security cameras, and by adhering to a well-defined supply chain, you should also take account for the losses, or expenses incurred as a result of shrinkage.
  1. Overheads
If you plan on giving your employees certain facilities like coffee vending machines, or food coupons or even something as fundamental as access to high-speed internet, and round the clock air conditioning, it is in your best interest to take the expenses related to these overheads into account.

If yours is an online business, you might want to factor in the rent of the storage spaces as well as the spending owing to doorstep delivery. While these may seem to be trivial when compared to the other cost-centers such as salaries and utility bills, they do take up a sizeable chunk of your monthly revenues, and hence it is best to be prepared for them in advance.

We hope that you now have a clear understanding of some of the seemingly insignificant but sizeable expenses that you will have to bear to run your start-up smoothly. Ideally, you should be able to pay for these expenses from your revenues. However, if you are unable to do so, you can always rely on Various Business Loans Deals to do so.
So, what are you waiting for? If your start-up needs the fuel for success, don’t hesitate from pumping it with sufficient funds. After all, that is what business loans are for.  

To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 60+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.


Talk to our Loan Specialists toll-free at 1800 103 4004 to know more about our products and offers.

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