Learning to expect the unexpected is arguably something we should all have become experts at during the tumultuous year that was 2020. But even ignoring the pandemic for a second, unexpected business expenses will come up every once in a while and planning and preparation are essential in these moments. Here are some typical unexpected business expenses to look out for and how to prepare for them.
What if the worse should happen?
Of course, if you really are left in the lurch and you feel like you have nowhere and nobody to turn to then a secured business loan might be a viable option to help deal with an unexpected expense. These loans are borrowed against your property assets so are generally available to anyone who owns property. There are few faster ways to generate capital and if you’re in a tight bind it could potentially save your business.
Unexpected business expenses
Health scares – While the idea of an entire workforce being bedridden with a virus and unable to work for weeks might have seemed unlikely even a year ago, today it’s a very distinct possibility. If your business leader or many members of your leadership team fall ill suddenly, the unexpected expense to replace them or keep the business running without them could be brutal.
Permits and licences – Particularly if your business is just starting out, there is bound to be reams of red tape to negotiate your way through and that’s very rarely a free process. Of course, what is required will depend on your sector and where you’re based but there is always going to be something to deal with.
Equipment and maintenance – What if your computer packs in and you have to buy a new one? Or one of the delivery vehicles you rely on decides to die in a ditch somewhere? There are always going to be equipment and maintenance expenses associated with a business you’ll rarely be able to predict exactly where and when those needs are going to arise.
Late payments – Given the unsteady state of the world right now, late payments are a common occurrence and it’s something you have very little control over.
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Planning for business expenses
Emergency fund – Setting aside a ‘rainy day’ fund is never a bad idea, though we’d recommend placing that fund in a separate business account to prevent temptation.
Secondary expenses – Many business transactions will also include a secondary expense that you might not even think about at the time. Perhaps you need to travel to meet a client? The petrol for the car or train fare certainly isn’t going to be free. Take these expenses into account at all times.
Keep on top of it – Check your business finances regularly and go over your monthly budgets, making notes of where you could potentially make cuts in the event of an unexpected expense.
