Unexpected Business expenses to plan for in 2019Business Registration Dubai
Whether you are starting a business in Dubai or growing a company, it is important for you to do financial planning wisely to ensure long-term security. When planning your budget, you should also consider unexpected costs associated with running a business. As a quick reminder, we have listed down 5 hidden costs of running a business in Dubai.
1. Freelancer/ Contractors/ Professional Fees
You cannot be an expert in every aspect of running a business. There are tools which come in many forms that assist you in your business operations. Such as,
Freelancers: sometimes an unexpected project requires more work than you can take on, you can then avail services of freelance or contract worker. Instead of hiring full time staff, freelancer acts as a perfect bridge to scale your business.
According to LinkedIn, more than 70% of small businesses have utilized a freelancer in the past, and 81% plan to in the future. Even if you do not need freelancer right now or are unsure of how they can fit into your business model, you can set aside some expense for temporary skilled workers. This way you will have the resource available when the time comes. Keep in mind that not planning this could put your cash flow in jeopardy.
Experts: While running a small business in Dubai, experts can help you prosper in the less familiar areas. For example, you need legal help when sued by a customer. You need an accountant when you have a financial problem. Especially after introduction of VAT in UAE, businesses are looking for accounting experts to e Vat compliant. Professional fees can be costly but it is vital for your business.
You will need to protect your business as you grow it. Insurance acts as a shield when you come across financial or legal troubles. Even if you are short on budget, get a liability insurance policy which will protect your business from losses if someone sues you.
Another popular trend now-a-days to attract and retain employees is to provide health insurance. According to a recent survey, 46% of job seekers say that health insurance is a deciding factor in their job search and 56% of employees consider employer-sponsored health insurance as a key factor for staying at their job.
Moreover, there are other insurance policies as well such as property, commercial auto or home-based business insurance. It depends on your business size and industry what policies you will need to hold.
3. Equipment maintenance and Repair
At some point of time, you integral business tools may need a bit of tuning. Such as renovation of office space, maintenance/up gradation of key equipment to make operations more efficient, repair of company vehicles and so on. You should be aware of how much your equipment and tools cost. These are additional costs which you must add in your 2019 budget.
4. Permits, Licenses and Taxes
If you are going for new business setup in dubai, you will need business license to start your business. You need to check with DED Dubai for specific requirements. Additionally your business might also need a permit to run in the locality. Most business permits and licenses have an initial costs plus renewal fees which you must keep in mind.
If you are running a small business, then you should stay up-to-date with tax rates and deadlines or you can stay in touch with a financial expert who will know the latest regulation changes and even those that are to come.
5. Payment Delays
Payment delays are not a direct expense. But they do cost you. Your business cash flow depends upon customers sending timely payments. If customers are late in payments, your business loses money.
Don’t suppose that all your collection efforts will bring on-time payments. Avoid late payments with clear invoice payment terms and conditions and following up with late-paying clients. Also give yourself a little cash cushion to handle payment delays.