Chasing dreams and running a business comes with a lot of expenses, and some of those expenditures might be less noticeable than others. Obviously, you expect to pay for materials and to pay your staff. But running a business is as difficult as it is demanding, and there are many expenditures that may not be as clear.
In this blog, we collected input about some of the hidden costs of running a business today. What overheads are unexpected and how does the pandemic play a part? Read on to find out.
SOCIAL SECURITY AND TAXES
Social Security and taxes are expenses we don’t always like to think about, but they are a required part of doing business. Both can add considerably to the cost of doing business, particularly if you have workers. Even a business owner who works for themselves now has to pay self-employment tax. The self-employment tax rate is 15.3%. The amount consists of two parts: 12.4% for Social Security (old-age, survivors and disability insurance) and 2.9% for Medicare (hospital insurance).”
LICENSING AND INSURANCE
Licensing and insurance may not be the most stimulating topics for everybody, but they are very significant nonetheless. And they can also be pretty costly for your business dependent on the nature of what you do. In addition to these fees, there may be credentialing requests as well. Think of opening a hair salon, you need state and local business licenses as well as official training at a hair school and probably an obligation to renew this license and training over time.
While it isn’t easy to measure in dollars and cents, turnover is always one of the major unseen costs of doing business. The restaurant business is feeling this specifically right now as it has had trouble re-hiring much of the workforce it lost due to the pandemic.