Top 10 Common Expenses for SMEs and Startups

Starting your own small- to medium-sized enterprise (SME) or startup can be uniquely fulfilling, but it also comes with more than its fair share of challenges. While most business owners understand that managing a venture can be a costly undertaking, they often underestimate the expenses they’ll encounter along the way. 

Understanding which areas require the most financial attention can help business founders and owners manage their resources more effectively, ensuring a better shot at long-term success. Let’s look into some of the most common expenses that SMEs and startups need to look out for.

1) Business Banking and Finance Fees

Having a business savings account that’s distinct from your personal savings account allows you to keep your finances separate while also helping you with your auditing and accounting tasks as well as allowing you to project a more professional image that lets you build relationships with investors, creditors, and customers. Online business banking services also typically feature larger withdrawal limits to better help businesses manage their day-to-day expenses and liquidity.

Traditional commercial banking services come with an assortment of associated fees. If you don’t choose the right bank or savings product, these fees could add up, effectively hampering your growth. To avoid being overburdened by fees, choose an SME business banking partner that helps you meet your goals.

Maya offers the type of business banking Philippines-based SMEs and startups require. As a pioneering digital business bank, Maya has the pulse of the country’s tech-savvy startup and SME scenes, making it your best choice for dynamic financing and innovative small business banking services that go where you go. Putting your venture’s savings in a Maya Business Deposit account not only entitles you to one of the Philippines’ highest business deposit interest rates at 2.5% per annum but allows you to send free transfers via PesoNet and InstaPay, transforming your small business banking online capabilities. Not only that, Maya Business Deposit has no maintenance fees, setting it apart from typical commercial bank products.

2) Labor

Labor costs are consistently one of the largest expenses for most SMEs and startups. This is especially true for newer businesses as they typically haven’t yet built the scale to optimize costs effectively. However, employees are the backbone of any successful enterprise, and payroll costs, benefits, and taxes need to be a top priority for businesses. The balance between maintaining the right talent and managing labor costs will be unique for each business, and finding it will be important for your venture’s success.

3) Real Estate

Securing a suitable location for your office or production facility can be a significant expense, particularly if it’s in a desirable location. Rental and acquisition costs also can vary greatly depending on the area and the size of the space required. To minimize costs, business owners should carefully assess their needs and explore affordable options. Cost-conscious founders should also consider if certain roles can be done from home or offshored when optimizing real estate costs.

4) Production Equipment

For startups and SMEs involved in manufacturing or production, acquiring necessary equipment can be a substantial upfront expense. This may include machinery, computers, software, or other specialized tools. To cut costs, you can buy secondhand or opt for leasing or financing options to spread the cost over time.

5) Office Equipment

Apart from production machinery, standard office equipment such as computers, printers, office furniture, and communication devices are necessary for daily operations. These expenses should be budgeted for in the initial setup phase while also taking their practical service life into consideration.

6) Insurance, Licensing, and Permits

Employees, equipment, and other critical assets should also be insured. Moreover, any outside technology or media used by your business needs to be properly licensed to avoid legal risks and potentially expensive lawsuits. Most importantly, acquiring permits from national and local government agencies is needed not only for legal compliance but to demonstrate your legitimacy to investors, customers, and creditors.

7) Website Expenses

Site expenses can vary widely depending on your business’s needs. Though all businesses need to consider domain registration, hosting, and basic maintenance costs, a brick-and-mortar store can probably do with a more basic website. On the other hand, an e-commerce business that plans on maximizing its online sales channels may have to invest more heavily in site development, incorporating solutions like Maya Checkout to create a better experience for site visitors.

8) Marketing and Advertising

Effective marketing and advertising strategies are essential for generating revenue and gaining market share. If your new business is struggling to build word of mouth, you may need to consider allocating a reasonable budget for better signage, online ads, social media promotions, and search engine optimization. If you have a larger budget or want to target a mass audience, investing in influencers or traditional advertising might also pay off.

9) Utilities

Utilities like electricity, water, internet, and phone services are ongoing expenses that need to be accounted for in your monthly budget. These costs can be quite significant for Philippine-based SMEs and startups, especially for manufacturers with significant energy and water requirements.

Fortunately, most Philippine utility providers offer special packages for businesses that are lower than typical residential rates. Try to get in touch with your power, water, and internet providers to see if they offer packages that can help reduce your business’s running costs.

10) Office Supplies

Lastly, day-to-day office operations require various supplies such as stationery, cleaning materials, and other consumables. While office supplies are typically the smallest expense item for startups and SMEs, the costs do add up over the course of months.

You can bring down the cost of sourcing office supplies by buying in bulk and building good relationships with B2B suppliers who may offer you much better deals than you can get at retailers. You can also consider downgrading certain items or cutting out nonessentials to further increase your savings. 

Save More, Save Better with Maya Business Deposit

Maya Business Deposit’s zero maintaining balance, 2.5% per annum interest rate, and free bank transfers allow you to take your initial working capital further, making it the best choice for maximizing your SME or startup's savings. Create a Maya Business account and apply for a Maya Business Deposit account to unlock more savings for your business.

After signing up, check out Maya’s exclusive 1-2-3 Grow bundle. 1-2-3 Grow is a special offer that gives your SME or startup a 1% MDR (merchant discount rate) on QR Ph sales for 3 months from promo onboarding. Even better, designating your Maya Business Deposit as your Maya payment settlement account entitles you to an additional month of discounts and savings. Signing up for 1-2-3 Grow also qualifies you for a Maya Flexi Loan offer of up to PHP 2 million in just 3 months, giving you more funds to elevate your business. Create your Maya Business account today to enjoy better growth and more savings.