Awareness and planning are keys to managing unexpected expenses.

It’s not a matter of if a business will experience unexpected expenses but when. Here are seven costs that commonly catch owners off guard and how to deal with them.

Utility expenses

Every business has a baseline cost to keep the lights on and HVAC running. The addition of things like computers, EV chargers, equipment and extended hours will directly affect utility bills.

To avoid utility bill surprises, monitor and analyze energy use. Many utilities offer online dashboards that allow businesses to monitor how much gas, electricity or water is being used. If you see a spike in usage, you can investigate why right away.

Also explore your utility provider’s options for minimizing energy costs. Consumers Energy, for example, offers commercial and industrial customers rebates, business rates based on levels of energy use and experts who help calibrate your equipment. Learn more about their business energy programs here.

Compliance related costs

Every business must comply with certain rules. At a minimum there are tax rules that must be followed. Depending on your business, you may also be required to adhere safety and other government regulations. Failure to comply can cost both time and money to address.

Working with a knowledgeable accountant will help avoid tax compliance issues.

For safety and government regulations, read all the rules and ask the agency that issued the rules about anything you’re unsure of. Alternatively, hire a safety consultant who specializes in your industry. Professional organizations can also be a good resource for staying on top of the latest regulations.

Equipment breakdowns

Whether it’s a laptop with a broken screen, a vehicle flat tire or a failed part on a conveyor, equipment breakdowns require repairs to keep your business going.

Routine maintenance can help avoid many problems so be sure to include this in your budget.

Having reserve funds or a business line of credit can also be used to cover routine and emergency repairs, as well as purchase new equipment when older machines reach the end of their useful life.

Fees

Fees have a way of creeping up on even the most conscientious budget planner. Think credit card processing fees, wire transfer fees and account fees. And don’t forget about subscription fees for software-as-a-service that increase with every user added.

Keep close tabs on all fees and seek ways to minimize. Does every person need access to certain software? Switching from a bank to a credit union like Consumers will likely reduce banking fees. Discover our comprehensive financial services for businesses here.

Security risks

Businesses large and small risk losses due to hackers, malware and ransomware. To avoid the costly problems, prevention is the best approach. At a minimum, your cybersecurity protocol should include:

• Keeping operating systems up-to-date
• Turning on your computer’s firewall
• Backing up files
• Controlling access to bank accounts

Also, be aware of check washing scams. Learn about how they work and get tips for avoiding this type of theft here.

The cost of loss

We don’t live in a perfect world, and this means businesses will experience losses. These can happen due to damage, spoilage, errors, theft, natural disasters or unpaid bills. Prepare for this with a loss control plan. State Farm provides free resources listed by business type to identify and minimize loss risks.

Employee turnover

To grow, businesses must invest in hiring and training employees. They must also be prepared when employees leave. By investing in in employee attraction and retention programs, they can minimize employee turnover and position themselves to bring in new talent when needed.

While unexpected expenses cannot be completely avoided, awareness and planning can certainly help minimize their effects.

 

All loans subject to approval. Rates, terms, and conditions are subject to change may vary based on credit worthiness, qualifications, and collateral conditions. Federally Insured by the NCUA.