When we set up in business we think about earning – finding clients, setting good prices and earning income to support our families. What we sometimes underestimate is the expenses involved with running a business. Everyone will have different expenses to cover but most will try to reduce as much as possible.

Here’s some to consider; some essential but others may be a business/lifestyle choice.

Income Tax and VAT (Bookkeeper too perhaps)

If you earn you have to pay – simples! So recording your income and expenditure is essential to be able to estimate the payment due to either Mr Taxman or as a refund to yourself (nice!). Calculate about 20% of earnings to be taken in tax and then expenses are offset. I would highly recommend having a tax person or qualified bookkeeper to help you (I found it really gave me piece of mind that someone ‘in the know’ was looking at my figures for me). But that is another Expense. VAT has levels attached to earnings but some companies need to be VAT registered to ‘play with the big boys’ and be considered for contracts; or if you buy equipment that has VAT charged.

Computer/Printer/Telephone (backups too perhaps)

Essential elements for any business. You can even get them on lease if you want that extra comfort. What about a backup computer should yours ‘fall over’: what impact would that have on your business if you had no computer (does it bear thinking about?). Also back up phone – or a special ‘work phone’ to keep your personal calls separate?


Business insurance is compulsory to cover you and your clients when conducting business: Professional Indemnity, Personal/Public Liability.

Office Space

This is a personal thing – but if you don’t have a dedicated work space in your home it may be necessary to find some. Being able to close the office door and return to being Mum/Wife/etc is essential for your sanity (and everyone’s around you). I office share so I get a little bit of interaction – if we are both in of course.


A massive subject and can be a massive drain on your finances. Areas include:

  • Networking face to face
  • Business Cards, leaflets, banners (if you are doing meetings, exhibitions, etc)
  • SEO/Business/IT support/Coach
  • Courses/Learning
  • Website/email hosting
  • Call Handling
  • Product design/support
  • Mailing platform (Mailchimp)/Social Media platform (Hootsuite)

As you can see there are things here some people will not ‘invest in’ whereas others will.


I find outsourcing invaluable; it allows me to go on holiday, take on more work and also take on work that I am not skilled at undertaking therefore increasing my offer. Finance, HR, Legal, Social Media, Web development: all areas that can be outsourced.


So as you can see (and this is only the tip of the iceberg) it can become very expensive before you have a client! If you are a technical expert there will be other expenses to be able to carry out your job I am sure.

What other expenses are you incurring or has this all come as a shock to you?

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