Young businesswoman wearing glasses calculates costs in a cafe.
Small expenses can add up, skew your financial forecasts, and impact your business's bottom line. — Getty Images/FG Trade

No matter how carefully you budget, it’s likely that a few unexpected expenses will crop up during the course of doing business. Savvy business owners know to be on the lookout for unexpected expenses; many people plan ahead for surprises costs by keeping an emergency fund on the side.

There’s another group of costs that can sneak up and eat away at your bottom line over time. Small expenses, such as credit card processing fees, can add up and have measurable impact on your profit margins. These expenses wouldn’t warrant dipping into your emergency fund, but they may escape notice and skew your financial forecasts if you aren’t careful. Here are some common sneaky costs for which business owners should be on the lookout.

[Read more: 5 Unexpected Startup Costs You Might Forget to Plan For]

Shipping costs

Shipping is a broad cost category, and as a result, it’s easy to underestimate how much your business spends on shipping. Multiple details inform a package’s shipping cost, including packaging material, dimensional weight, shipping method, the carrier, and insurance. If you choose to offer free shipping or international shipping, these costs can increase quickly.

Business shipping expenses vary widely, but the National Federation of Independent Business estimated that small businesses spend an average of $4,000 per year with the US Postal Service.

Keep an eye on your shipping budget by choosing your shipping options wisely and working with multiple carriers to find the most economical partner, based on the weight of each package. You can also look for reusable packing materials and buy in bulk when you can.


Taxes can be the secret bullet that craters your year-end profits. Track your tax liability throughout the year to keep this cost from sneaking up on you.

“​​Do your research and build those costs into your profitability model; otherwise, you’ll be in for a rude awakening come tax season, when you realize you aren’t making nearly as much money as you thought you’d be,” wrote Entrepreneur.

Small costs can also contribute to lowering your tax bill. Keep track of payments for expenses like educational resources, magazine subscriptions, and petty cash purchases. In April, you can claim deductions for these business resources and lower your overall bill.


Software is one of the biggest little expenses that can quickly add up. Many business owners subscribe to automation software to help with tasks, like hiring needs or helping employee productivity. The downside is that these subscription software packages can cost a few hundred dollars per month (or more).

Subscriptions aren’t limited to software, either. If you have a custom website, you’re probably paying an annual fee for the domain name as well as the hosting service (e.g., Wix, Squarespace, or Weebly). Web hosting services cost around $40 per month, but they’re absolutely necessary to do business with today’s customers.

Do your research and build those costs into your profitability model; otherwise, you’ll be in for a rude awakening come tax season.


Employee expenses

Payroll and benefits are two major line items in your budget, but what about other small employee-related expenses? This category of expenses includes costs like office supplies, break room coffee and snacks, travel reimbursements, and any other expenses that come up while your employees complete their daily tasks. You may also decide to invest in small incentives and rewards to keep your team motivated and engaged with their work.


Insurance is an expense that’s worth paying to help cope with an emergency down the line. “The type of insurance your startup needs is entirely dependent on your business, industry, number of employees, and other risk factors. For instance, a sole proprietor running an online business has far fewer insurance requirements than a construction company with several employees,” wrote NerdWallet.

Most business owners explore some combination of general liability insurance, commercial property insurance, and workers’ compensation insurance. These policies, together, can cost an average of $1,200 per year, depending on your industry, location, and number of employees.

Transaction fees

Credit card processing fees vary widely by platform. For example, if you host your website on Square, you have to use Square as your credit card payment processor, which means you’ll pay 2.9% plus $0.30 per online transaction (or $3.20) for each $100 purchase.

However, a company that hosts its site on WooCommerce can choose from several payment gateways, such as Eway, which offers 1.9% plus $0.25 per transaction (or $2.15) per $100 purchase.

There are also transaction fees associated with third-party platforms or marketplaces. On Etsy, sellers pay $0.20 plus 6.5% per transaction, including the price of the item, shipping charge, and gift wrapping fee.

[Read more: 5 Unavoidable Costs E-Commerce Businesses Often Overlook]


Cybersecurity expenses don’t neatly fall into one category, and as a result, they can easily be overlooked. There are subscription fees for password management tools, firewalls, and other software. There are also one-time fees associated with consultants or IT experts who come to set up your system. And, some business owners opt for insurance policies that cover certain cyber events. It can be helpful to condense all your cybersecurity costs into one budget category so you can gain a clear view on what you’re spending to protect your valuable data.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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