6 overlooked business costs and when to consider a loan

Man pushing towards minimum business cost when considering a loan.
checking blog post using mobile

6 overlooked business costs and when to consider a loan

checking blog post using mobile
Man pushing towards minimum business cost when considering a loan.



Dealing with financial challenges is par for the course when running a small business, even for the most well-equipped entrepreneurs. Keeping track of the expected costs is hard enough, but there are so many unexpected expenses that can catch you off guard.

Navigating these costs is key to growing and sustaining a successful business, so it’s important to be as prepared as possible for any eventuality. Here are some of the most overlooked costs in starting and managing an enterprise, and what you can do if you find yourself short on cash

1. Registering your business

You probably know that in Singapore, you can’t just throw up a sign and start trading on the spot. New businesses need to officially register via the Accounting and Corporate Regulatory Authority (ACRA) and pay a series of fees depending on the nature of the organisation. From reserving a name to obtaining the relevant licenses, costs can quickly accumulate before your doors have even opened.

2. Research and development

Any successful enterprise needs to validate its core business idea. Research and development is crucial to developing a market-ready product or service, and many entrepreneurs are surprised by the amount they end up spending. Whether you conduct your own market research or hire an agency, be prepared to see costs go well into the thousands during this stage.

3. Insurance

Insurance isn’t just important to protect your business from financial ruin: it’s often mandatory. All businesses in Singapore are required to have work injury compensation cover along with commercial motor insurance for any vehicles, and most will also consider forms of insurance for property, public liability and cargo. Investigate which types of insurance are required in your industry and factor these costs into your budget.

4. Rapid growth and expansion

Being able to capitalise on opportunities driven by surges in demand is key to growth, so you need to be prepared for significant reinvestment in your business. Hiring new staff, expanding your floorspace and purchasing new equipment are just some of the costs you may need to bear in order to secure long-term gains for your business.

5. Advertising and marketing

You could have the slick logo, glittering shopfront and shiny new product ready to go, but it’s all worth nothing if potential customers don’t know you exist. Your competitors are already investing heavily in advertising and marketing, which means you’ll quickly fall behind without your own strategy. Not everything will work, either: factor in some trial and error within your budget to ensure you can always afford to continue promoting your brand.

6. Maintenance, repairs and renovations

Things break. Whether you’re working with equipment and machinery or just running a website, downtime is virtually inevitable and will add to your ad-hoc expenses. Property upkeep costs are particularly important to account for, as even a simple maintenance issue can turn into a money sink if not adequately dealt with.

How to manage unexpected costs

Being caught off guard by costs you didn’t account for doesn’t mean you’ve failed – it’s practically a rite of passage for business owners. However, budgeting as thoroughly as possible will put you in the best position to survive these expenses, as well as maintaining a focus on cutting your business costs wherever feasible.

Should I consider taking out a business loan?

Keeping costs low and setting money aside for emergencies isn’t always enough to deal with the fluctuating costs of running a business, particularly when it’s rapidly expanding or contracting in line with demand.

Taking out a loan can be a viable way to keep your balance in the green and is worth considering if the budget is tight. Business loans can provide the short-term cash you need to pay for urgent repairs or invest for growth, allowing you to spread the cost over a longer period with monthly repayments.

CompareSing makes it easy to compare business loans in Singapore, giving you the information you need to make the best possible decision for your business. Use our online comparison tool to get started with an instant quote.


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