What are the most common business expenses?

Running a business involves many expenses, some of which are fixed while others are variable. Knowing what some of the most common business expenses are can help you control costs and properly budget for your business. Here we’ll go through some of the costs that businesses have to pay on the regular to remain profitable.

Rent / Mortgage Payments: No matter the size of your business, you’ll likely need a place for employees to work or customers to access products or services. Rent or mortgage payments can be a significant expense for any business that requires a physical location.

Salaries or Contracted Services: Most businesses need someone to help them with day-to-day tasks. Even if you are a sole proprietor, you may need to pay for contracted services such as accounting and legal services.

Utilities Costs: Any physical location will require electricity as well as other utilities such as water, internet, and phone. Utilities are a regular expense for any business with a physical location.

Marketing / Advertising Costs: Whether you prefer to invest in traditional advertising (television, radio, magazines) or digital advertising (online, email, search engine results), these costs add up quickly and are typically a necessary expense for businesses.

Inventory: If you are selling a product, you’ll need to invest in inventory. Even if you are offering services, you may need to stock supplies used in performing those services.

Equipment: Whether you need computers for your office, special bags for your deliveries, or a restroom service, businesses require the purchase of equipment and supplies to keep operations running. This expense is necessary for any business that needs to use special tools or specialized items to do business.

Knowing what the most common business expenses are can help you plan your budget and better control your costs. Keeping track of all your expenses can also help you maximize deductions come tax time.

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