Unanticipated First Year Business Costs

Recently, Praxis Creative has marked its first year in business. Although Year One has had trying moments,  it also has had great moments.

What have I learned this year?

Being a business owner and entrepreneur is hard work. There are so many things you THINK you know and understand, but you don’t. You encounter the unexpected: unanticipated costs and situations, personality issues, and odd team dynamics.

Unanticipated Costs and Situations:

Liability insurance. If you’re bidding on a contract, liability insurance is most likely a necessity. How much coverage should you get? Will you need both professional and general liability insurance? Well, if you’re leasing an office space, you’ll have to cover not only your business but your landlord’s too.

The high price of data plans for your business is another unexpected cost. Internet data and phone plans can be expensive. You’ll need routers and network security. These are business items that you more likely take for granted if you used to work for another corporation.

A fax number. Who the hell still uses fax machines? Well, plenty of people and companies do. If you want to conduct business with local, state, or federal governments, it’s required that you have the capability to fax documents.

Keeping your business cards in stock is a necessity too. You never know when or where you’ll meet a potential client. As long as you’re in business, you’ll continuously have this cost.

Networking. You’ll have to network as if your life depends upon it. It’s so important to interact with other business owners and entrepreneurs. You never know who is in a position to help you or if you can provide a service to them. In addition, you’ll need to develop a networking budget that includes costs for events, conferences, travel, and promotional items such as brochures and post cards.

Having a lawyer on retainer requires money and more money. It’s smart business to have a lawyer on call, especially if you need advice when drawing up contracts with your customers and business partners. Plus, other issues may arise. For instance, if some partners decide to leave (as in our situation), you’ll need to reallocate shares and update the company’s articles. So, even if you’re not looking forward to paying the monthly legal fee, it’s a relief to have a professional on call.

Personality Issues and Odd Team Dynamics:

In our situation, losing partners meant missing out on affordable (or free) skilled labor, that now becomes costly. Of course, freelance contractors need to be paid for their production, and remaining partners bear an increased financial responsibility when it comes to investor contributions toward other costs, such as the rent and data plan.

When it comes to networking, you may find that some team members may not be so outgoing and sociable while interacting with other business owners. Or, you may discover that others are not as enthused when it comes to tackling tasks such as proposal development and admin work. As a result, you could find yourself shouldering a bit more of the responsibility than originally anticipated.

Regardless of these unexpected situations, it’s necessary to remain focused on the BIG PICTURE. One of the most important things that I learned during this first year is to remain committed and dedicated. Success will not come easily or quickly. As a new business owner and entrepreneur, you have to do EVERYTHING! Answering phones, social media postings, blog updates, production, marketing, promotions, documentation, and research. You have to stay focused because things will seem difficult at first and, sometimes, you’ll feel so discouraged you’ll want to scream.

Instead, you have to buckle down and focus. Believe in yourself. Even when some people around you lose faith and give up. You choose to stay the course.