In the know: Common business costs and expenses

There are so many elements to consider if you are looking to start a business. But have you had the time to look at the funding part of it? Anyone who wants to start a business must have an idea of what kind of expenses or costs he/she must prepare for.

Since there are literally so many that we can look at, let us categorize them so they are applicable to all type of businesses as much as possible.

1. Materials, equipment and other operational costs.

To start your business happening, the first things to prepare for are your operational costs. You'd need funding to get all the equipment, ingredients and other operational elements that you'd need.

2. Manpower, hiring, and payroll.

Of course, this is applicable if you'd need help with the production of your products or if it is a service you offer, you'd need employees. Funding is needed from the hiring process to your monthly payroll expenses.

3. Office, warehouse and utilities.

It can be expenses for rent, electricity, water, etc. Basically, for space where you create your products or provide your service, a place you can use as a headquarters.

4. Soft costs.

I see this term usually being used in the construction industry. Soft costs pertain to expenses that do not directly help provide a service or create a product but helps keep the business functioning. These can be from advertising costs, licenses, taxes, product testing, etc.