4 Hidden Costs of Running a Business
Every entrepreneur discovers a few surprises soon after launching a business. For some, the unexpected revelations are related to expenses they either never heard of or didn’t think applied to them. The awakening can be a bit of a shock and has the potential to change budgeting plans, expectations of profitability, and more. For transport fleets, there are multiple hidden costs, like training and licensing fees for drivers.
Independent contractors’ wince when they fill out their first tax returns and calculate unemployment taxation rates. Inventory carrying charges are the primary fear for precious metals dealers. For other types of owners, the price of continuing education classes and monthly space rental can be stunners. Here are details about a few of the most common financial surprises that await company owners soon after launch day.
Commercial Fleets: Licensing & Training Expenses
Fleet managers who have been in the business for a while understand that operating a vehicle fleet can be a costly enterprise in terms of license fees and training expenses. Founders sometimes forget to account for the rather substantial per-driver charges and other federally imposed regulations. Most trucks, buses, cars, and vans used in the ordinary course of business fall under the legal definition of commercial vehicles.
The Federal Motor Carrier Safety Administration (FMCSA) oversees determining which drivers need special licenses and which ones do not. Commercial driver’s license rules can be costly for owners, who typically cover the fees associated with training drivers and paying for their examinations. The best way for owners and supervisors of fleets to find out all the relevant details is to gather the facts from a reliable source and study the FMCSA guidelines about which vehicles are considered commercial and which drivers must obtain additional training to operate them legally.
Independent Contractors: Self-Employment Tax
The freedom of self-employment can be a major incentive for starting a company, but there’s one thing that most people are disappointed to discover. When you act as your own boss, you must pay the boss’s share of the social security tax. The amount varies, depending on a few circumstances, but is set at 15.3% of your company’s annual net earnings. It’s payable upon filing in April but can be paid quarterly if you are set up to file four times per year.
Precious Metals Dealers: Inventory & Storage
Individuals who set up gold and silver bullion brokerage businesses soon discover the two highest costs of operating their companies. The initial purchase of bullion is the single most costly component, but storage is a close second. It’s never a good idea to keep metals at home. Bank safety deposit boxes are the best way to go, but most entrepreneurs need several to accommodate their inventoried bullion.
Personal Trainers: Facility Rent
Acquiring credentials to be a personal fitness trainer is a relatively low-cost affair. However, unless you pay monthly rent on a space of your own, be ready for facility fees at the gyms and private clubs where you work with clients. Be sure to shop around for discounts and special deals because some gyms offer lower rates for licensed trainers.