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[L369]List Of Business Expenses

by Nick Angeli, Nic

When you begin a home business, forget all the free time and endless vacations many people talk about. Your primary focus is going to be on making enough money to survive. One of the biggest problems new home business owners face is confusing income with profit and it is the profit that will determine if you are successful or not. There is money to be made in a home business, but if you cannot control the expenses, you may not survive on the home front.

Little things that may seem insignificant when you worked for someone else can quickly add up and detract from your ability to survive financially. To begin with your office is now in your home and you will need to treat the home, and its associated expenses, as part of the cost of doing business. One of the biggest expenses you will have is utilities and if you can reduce utility costs for the home, you automatically reduce your cost of doing business.

Most states have competition among suppliers of gas and electric and searching out the company that offers the lowest price and best service may save you a few bucks every month. A couple of dollars may not seem like a lot of money when viewed in the overall picture of running the home business, but over time can up to significant savings. While looking at your utility costs, consider how many lights you leave on when you are not in the room. It is a common error by most families and one the savings devices could be automatic motion switches.

Motion detectors built into the light switches turn on the light when a person enters the room and shuts them off shortly after they leave. This can be a beginning to reducing energy consumption and lowering the bills. Try switching to energy saving fluorescent bulbs that are as bright as incandescent bulbs and although they cost a little more are more energy efficient and should last longer.

Ask yourself if you really need to heat at 72-degrees in the winter. Knocking a couple of degrees off the thermostat may save another couple of dollars a month and with the reduced energy bill you may be able to go out to lunch once in awhile. Speaking of lunch, there really is no need to venture out to the restaurant or even a fast-food joint for a burger. You have a completely equipped kitchen and refrigerator in which your lunch can be stored and prepped.

Do not get caught up in the convenience of online postage companies. Many of them charge a monthly fee, even id you do not use the service. They can run as high as $15 a month just so the service is available. Buy stamps when you are out and save that service fee. You may also not need the movie channels on your cable. You are going to be too busy operating your home business to enjoy many movies and they only distract you when you are supposed to be working.

Business expenses need to be budgeted for when you are starting a business. These expenses are typically categorized according to type. One of the larger categories of business expense falls under the heading Administrative Expenses. These business expenses are those related to the day-to-day operations of the company.

It is important to understand these administrative expenses. When you are preparing your budget and pro forma statements you need to be aware of the options that impact each of these business expenses.

The first business expense to look at is payroll. Your business needs to be able to pay you. This business expense may be regular or infrequent but it needs to be budgeted for.

Next is business expenses related to telecommunications. These are items like cell phones, business phone lines, and Internet access.

Insurance is an important business expense in the administrative category. Here you need to consider business insurance, general liability insurance, casualty insurance and health insurance.

Health insurance is a huge business expense. Our recommendation when budgeting for this is: If you have a spouse that has health insurance try to stay on their policy. If COBRA is an option for you, try to arrange that. This is a very costly business expense so do your homework carefully.

Bank fees are a business expense that many people don't even think about. You should realize though that banks charge a fee to open a business account and the monthly fees are typically higher than for personal accounts.

A related expense is the fees charged by the credit card companies. These add up to huge business expenses as they typically charge at least two or three percent on each transaction. And many small-business owners absolutely love American Express, which usually charges even higher percentage fees.

Another large business expense item is professional fees. These are the fees you pay to your accountant and/or attorney to advise you on different stages of your business as well as other benefits.

Other common business expenses in the administrative category include:

Travel and Entertainment
Office Supplies
Vehicle Expense

The Bottom Line on Business Expenses

You need to understand and research every business expense when you begin the process of budgeting. The business expenses related to administration often get overlooked as they are not the obvious sales related expenses. This business expense category accounts for a large portion of your overall expenses so it is worth examining closely.

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Both Nick Angeli & Joshua Feinberg are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Nick Angeli has sinced written about articles on various topics from Women, Internet Marketing and Home Based Business. Nick Angeli is a professional internet marketer who specializes in teaching others how to be successful with internet marketing. If you want to get in touch with Nick or learn more about network marketing success please visit:. Nick Angeli's top article generates over 18100 views. to your Favourites.

Joshua Feinberg has sinced written about articles on various topics from Adwords, Business Plan and Information Technology. . Joshua Feinberg's top article generates over 1000000 views. to your Favourites.