The Hidden Costs Of Running A Small Business
May 3rd, 2025
Posted in: Tips & Insights

Running a small business comes with unexpected expenses that can erode profits. Beyond rent and payroll, here are some hidden costs to watch for.
Permits, Licenses, And Dues
Business licenses, permits, and industry-specific dues can add up. You also might want to join a networking group or your local Chamber of Commerce or Canadian Federation of Independent Business (CFIB) chapter. Staying informed and budgeting for these costs prevents surprises.
Office Expenses
You might have a good handle on what equipment and supplies you need to create your product, but what about all the little expenses that go into running your business every day? Desks, chairs, tables, computers, a copier, copier paper, the coffee machine, pens, pencils, staplers—it all costs money, and it adds up.
Software Subscriptions
As small business, chances are you’re doing a lot of the accounting and marketing in-house with a handful of software subscriptions. Subscription-based tools for accounting, marketing, and project management are essential but costly. Regularly reviewing and consolidating software can help reduce expenses.
Training And Development
Keeping up with industry trends often requires training, certifications, or conferences. Setting aside a budget for ongoing education is a smart investment.
Legal And Accounting Fees
Unexpected legal issues or audits can be costly. Having a lawyer or accountant on retainer helps mitigate risks and saves money in the long run. This can be one of those “spend a little money to save a lot of money” items—do you have the time or the expertise to do your own taxes, or deal with the Canada Revenue Agency if you get audited? Having a relationship with a professional accountant can be a life-saver for a small business.
Insurance
The insurance you require depends on your business and whether or not you have employees, but having appropriate insurance is critical for running a successful business. Per Wasp Barcode Technologies, “These will be the most important checks your business will write every month. At minimum, you will need both employer liability and public liability coverage. It’s also a good idea to carry insurance for negligence, property, illnesses and injuries.”
Employee Turnover Costs
Hiring and training new staff takes a significant amount of time and money. Retaining employees through competitive salaries and a positive work environment reduces turnover expenses.
Shrinkage And Payment Processing Fees
Losses from theft, fraud, damaged goods or accounting errors impact profits, as do credit card processing fees. Strong internal controls and cost-effective payment options help minimize these expenses.
For more information, this video has a nice overview of some of the most common hidden expenses.
Conclusion
There is an old saying; “Failing to plan is planning to fail.” If you have enough unexpected, hidden costs that you weren’t prepared for, it could negatively affect the success of your business long-term. Anticipating these hidden costs and budgeting for them helps small business owners protect their bottom line.
Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.