Don’t let hidden costs derail business plans

Steven Garibell is the Vice President of Community Business Development Strategy for TD Bank.
Steven Garibell is the Vice President of Community Business Development Strategy for TD Bank.
TD Bank

Building Dreams | Navigating your business Ambitions

Owning a business involves an endless expense stream: inventory, office rent, employee salaries and more. But starting your own enterprise may include unanticipated costs that can quickly put a dent in cash flow if not properly managed. Among the most overlooked expenses:

  1. Business licenses and permits – Proper licensing and permitting, especially in New York City, are essential one-time or annual costs for keeping your doors open. Some fields require professional designations, while others could have additional expenditures to set up a legal structure (LLC, S-Corp) to protect the business.
  2. Self-employment taxes – Many entrepreneurs owe an annual self-employment tax payment. Others can incur taxes if employee withholdings were not properly calculated, or deductions were overlooked or misapplied. This isn’t the time to do it alone – consult a licensed tax professional to prevent missteps.
  3. Professional fees – Owners quickly can become burdened if they take on all operational duties and tasks like payroll. Finding lower-cost alternatives is possible: consulting your bank is free, while using bookkeeping software and online banking tools can offer cash flow insights.
  4. Continued learning – “Learning on the job” is essential but expanding industry knowledge usually involves more formal training. These costs have a wide range from attending conferences to purchasing business resource books.
  5. Bad credit score – Carrying a poor credit score could be costly when you want to expand. A business credit score is typically used — along with debt-to-income ratios — to make lending decisions. Your personal credit score also comprises a large portion of your business score, so missteps in personal finances could cost your business.

Entrepreneurship can be expensive, but plans don’t have to be derailed by unanticipated costs. A little research and preparation can help owners manage revenue while starting out or growing the business.