6 Hidden Costs of Starting a New Business in 2021 + How to Reduce Them

If the upheaval of the past year has taught us anything, it's that there are no guarantees in business. But one hidden benefit of mass closures and unexpected downtime at home is the opportunity to reevaluate our careers. Many have taken this time to rethink what life and work really mean to them and decided to start their own businesses.

The thought of going out on your own may bring a mixture of fear and excitement. Maybe it's something you've been thinking about for a while, and now fate has forced your hand. But before you take that step, there are some hidden costs you may not have considered. It’s important to know your market and understand the costs you’re up against when starting your own business

Hidden costs for new businesses

Anyone who has ever worked long hours at a dead end job may have dreamed of being their own boss someday. Maybe you have a side hustle or a hobby you've wanted to expand into a business.

However, being your own boss is challenging, and it’s definitely not for everyone. The reality is that working for yourself often means working harder than you ever have before — not to mention barely breaking even for quite some time.

Costs like office space, equipment, and payroll are to be expected and may be easier to calculate. But, there are many expenses that might take you by surprise when you launch your startup. Everything from the hidden costs of website maintenance to acquiring the right kind of insurance can set you back if you don’t plan for them.

Before you take the leap, here are six hidden costs that you should know about, plus some tips on how to make them more manageable.

Startup funding

You might think that you can just start your business small and build upon it. But even a stellar business idea requires some capital to get it off the ground. Unfortunately, this is also one of the hardest parts of starting a company.

Some new business owners don’t understand the finances behind starting a business well enough to present their financial information to loan officers or potential investors. What’s more, women, persons of color, and other minorities underrepresented in the startup space face additional bias and challenges. For example, one study found that black business owners were 10% more likely to apply for startup...

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