Costs That Are Forgotten When Setting Up a Small Business

When setting up a business, there’s a lot of costs which need to be accounted for. The business premises and the cost of equipment and supplies are the most obvious. However, did you know there are other hidden costs you might not have prepared for?

Without factoring in the entire cost of setting up and running a business, you could find yourself in serious financial difficulties. In fact, cash flow troubles are one of the main reasons new businesses fail within the first couple of years. To ensure you’re adequately prepared, below you’ll discover some of the hidden costs that are forgotten about when setting up a small business.

Insurance, permits and licenses

The majority of businesses will require some form of insurance, though the types required will vary. If your business will be hiring employees, you’re going to need Employer’s Liability Insurance.

This protects the business against compensation claims made by employees for any injuries incurred at work. If you don’t have this insurance in place, you could face penalties of up to £2500 each day that you aren’t covered. Other types of insurance you may need include Public Liability, Product Liability, and buildings and contents insurance.

As well as insurance, certain types of businesses may also require permits and licenses. So, this is something you’ll need to check with your local council prior to setting up the business.


In order to get your business off the ground and generate new customers, you’re going to need to invest heavily in marketing. This includes having a website created for the business, as well as paying for ads and SEO to help your site appear in search engine results.

There are some free marketing methods you can take advantage of when you’re just getting started. However, you will still need a website at the very least.


If you’re selling products in your new business, you’re going to need to factor in delivery costs. Customer expectations have changed dramatically over the years in terms of delivery. So, it’s crucial to ensure you’re choosing a reliable courier, as well as offer a refund policy and potentially even free delivery on orders over a certain amount if you want to remain competitive.

The cost of credit

A lot of businesses require some form of a credit to get them started. However, they fail to take into account the interest added to the loans or finance they’ve taken out. So, if you’re going to take out a loan to start the company, you need to factor in the monthly repayments.

These are some of the main hidden costs of starting up a business. If you want your new company to be a success, you need to plan for all of the costs associated with setting up.

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