Starting a business is exciting! You’re finally ready to bring your dreams to life, become your own boss, and strengthen your local business community. You’ve got everything figured out…at least, you’re pretty sure you do. But with a new business come lots of startup costs, and you want to be sure not to overlook them. Here are a few costs to consider before hanging out your shingle.

License, Bond, and Insurance

Depending on the type of business you start, you may need more than one license, and you nearly always need insurance, sometimes several types—workers’ comp, liability, and property are common. In many industries, your business’s regulating government agencies also require you to purchase a surety bond, which is like insurance that covers your customers.

A surety bond is an agreement between you, the principal, the surety company, and the obligee (the entity requiring that you purchase the bond). If your business practices are in violation of the terms of the bond, customers can seek financial reimbursement by filing a claim against the bond. As long as you remain in compliance with the law, your bond simply tells customers that you’re following all the rules.

Once you’ve acquired the mandated licenses, insurance, and bonds, you can advertise your business as “licensed, bonded, and insured,” a trustworthy phrase your customers are sure to notice.

Office Space, Utilities, and Supplies

Unless your business is home-based, you’ll need office space and with that come many expenses. Whether you lease or buy office space, you’ll have a monthly mortgage or rent payment along with utility payments. The electricity bill for a large space can be high, especially if your area gets freezing winters or scorching summers. After you find the perfect space, it has to be furnished and stocked with supplies: employees need desks, computers, and phones, the kitchen needs coffee, and printers need ink! Offices can’t run without the proper supplies—a recurring monthly cost it’s important to factor into your budget.

Employee Turnover

Even if you think you’ve hired the perfect person for the job, many circumstances can lead to vacant positions that need to be filled. With new employees come new costs: the cost of training the employee, lost productivity by the employees doing the training, and time lost to vetting and interviewing candidates. One way to combat this is by making it clear you are hiring for a long-term position and would like new employees to grow and advance with your company—and then follow through! Give your employees chances to learn more through continued education courses and other learning opportunities. An investment in your employees is an investment in your business.

Credit Card Fees

Businesses that accept credit cards must pay credit card processing fees. There can be several different fees assessed by credit card companies, banks, and the companies that handle the processing, including fees per transaction, flat fees, and secondary fees resulting from insufficient funds, chargebacks, or other (usually rare) situations. You might also be charged additional fees if customers can make purchases online. Credit card processing fees can be complicated, so explore different companies’ offers and negotiate wherever possible.

Internet and Website

Monthly Internet costs should be a given, but here’s a reminder in case they slipped your mind. You’ll need fast, reliable Internet, which can cost a premium depending on the area your business is in. Not to mention you’ll probably be using data on the go more often than before, so don’t forget to up your cell phone plan’s data limit (go for the unlimited so you don’t have to worry about overage charges). You’ll also have costs associated with your website, like registering a domain name (plus its annual renewal cost) and hiring a website designer. These costs are especially important because most people search for services online, and you want them to find your site to be informative and well maintained.

Your Time

You already know that building a business will be labor-intensive and time-consuming, but don’t underestimate just how much labor and time it entails. Remember your full-time nine to five, and how it was sometimes an eight to six in busy months? Forget that—you just signed up for a 24/7 gig whose every problem is your problem. It’s like going from renting to buying a home: you used to call your landlord when the faucet started to drip, but now you’re pulling out the toolbox. If you have help, delegate smaller tasks that don’t require your full attention, like rearranging office furniture or stocking the supply closet. Make sure to get as much rest as you can and step away from your new business for just a few breaths.

Author: Melanie Baravik is a member of the marketing and outreach team. She writes about changes in the surety bond industry for the Surety Bond Insider.


  1. Bonds can play an important role in your business, both by financially protecting it and creating trust when dealing with potential clients. Some bonds, such as surety bonds, are legally required by states for certain industries.