Business Tips

The Monthly Costs of Running a Small Business

Whether you're just starting out with a new commercial venture or you've been in business for a while, one of the most critical questions to ask is: How much does this cost? The cost of running a small business will depend on several factors, such as your line of work, location, and company size. While it can seem like there’s a never-ending list of things to consider, fortunately, Optimum Business has some guidelines to help you stay on top of your expenses. Here, we will run through the typical monthly costs of running a small business and some optional or variable fees to consider. 

Multiple 100 dollar bills

Essential Costs

First, let’s cover the essential costs of running a small business—the things you can't do without.


An inventory refers to any physical items or materials that a business intends to sell for profit. You will not have an inventory if you sell a purely digital service. However, for companies selling tangible products, you must consider the costs of your products and ensure you have enough stock to meet demand. Inventory costs may vary depending on the time of year if your product is seasonal. Alternatively, if your product is perishable, you must determine how much product to purchase to minimize waste and maximize profit. 


If you have a leased office or workspace, you'll need to pay rent on the property. Depending on your lease agreement, this expense may be fixed at the same price for several years. Alternatively, if you own your business’s property, you’ll typically have a mortgage. These costs are heavily dependent on your geographical location. And although the market changes over time, this expense should remain relatively consistent. 


Unless you're a one-person band, you'll likely be paying employees a monthly salary. This figure will depend on your team size, your line of work, and your location. As your team develops, it's worth considering hiring a payroll company to deal with the ins and outs of employee expenses and wages. 

Marketing and Advertising 

To get your small business off its feet, building brand awareness and telling the world what you're all about is critical. So, you’ll need to consider the costs associated with developing a marketing strategy. Traditional marketing methods like newspaper ads and billboards can be costly, especially if you need to update your content. Alternatively, some digital marketing tools can be a much more cost-effective option—Facebook marketing can be completely free! 


You'll likely need some form of technology to run your business, like laptops for your employees, large screens in meeting rooms, and Wi-Fi to stay connected. And while these items are not the cheapest, they're necessary to run your business smoothly. Often, you'll be able to find deals if you buy in bulk, so we recommend browsing the market to see what's best for you. You also may be able to get tax relief on technology items used for business. Optimum Business can help you to customize your businesses’ Wi-Fi experience to get the most out of your Internet


It's a good idea to have an accountant or accounting software on hand to ensure you stay on top of the books and advise you on important financial decisions. Regular catch-ups with an accountant can help you to stay on top of employee benefit programs, legal considerations, and taxes. Accountants can have hefty charges, although you can drastically reduce costs by doing the more straightforward tasks yourself and only outsourcing for the complex things. 


Regardless of your business, you should always have some form of insurance. Many businesses start with general liability insurance. This helps protect you in the event that you, your product, or your employees cause physical harm to someone or something. Other types of insurance to consider are: 

  • Commercial property insurance
  • Workers’ compensation insurance
  • Errors and omissions insurance

While these can come at a few hundred dollars each every year, having these protections can give you a peace of mind. 

Legal Fees

Regular meetings with an attorney are a great way to help ensure you follow the correct processes, such as creating contracts with vendors or not overpromising your product's capabilities. While legal fees can be several hundred dollars a pop, once you know the basics, you may be able to meet less frequently. Over time, this can help you save. 

Permits and Licenses 

In most cases, you will need annual licenses from your federal and local governments before opening your business. We recommend looking into this and setting reminders to renew each year, so you don't get hit with a big sum unexpectedly. 

Fixed Monthly Costs

Many of the monthly costs of running a small business will likely stay relatively consistent over time, especially if you have annual deals or subscriptions. Here are some typical monthly costs:

  • Rent
  • Insurance premiums
  • Property tax
  • Payroll
  • Internet and phone bills
  • Loan payments
  • Website (CMS subscription cost)

Variable Monthly Costs

Other costs may fluctuate over time depending on factors like how much you're selling and the time of year. 

  • Packing and shipping. This fee depends on how much product you sell and where you are shipping to each month. 
  • Utility bills. While some bills come as a monthly debit, utility bills can build up pretty quickly, especially if you turn up the heat in colder months. Bills to consider are water, electricity, gas, and WiFi. For help with WiFi services, check out how Optimum can help. 
  • Raw materials. If you trade services rather than physical products, you may not have the cost of raw materials. However, if you bulk buy materials, you'll have the occasional lump sum. 
  • Inventory. Like raw materials, you may prefer to stock up on resources (like office supplies) in one go rather than buy things monthly. 
  • Commissions. If you have a commission-based sales team, these payments will depend on the success of their sales each month. 
  • Credit card payments and interest. It's natural for your credit card bill to fluctuate, especially if you have several variable payments to consider. Keeping track of these bills is critical to ensure that you work within your budget. 
  • Travel. If you or your employees meet clients in person or travel with work, you'll have to fund this. This cost will fluctuate depending on how frequently you travel and where you go. 
  • Consultants. If you use external consultants like accountants or lawyers, you will need to consider the costs of meeting them. 
  • Business entertainment. Summer parties, holiday presents, and guest speakers can help build company culture, but they’re an added cost. We recommend setting a strict budget for these elements so that you can have fun without draining the pot. 
  • Marketing and advertising. These fees can range dramatically depending on your chosen marketing channels and the time of year. For instance, if you launch a large Christmas campaign, that'll cost more during November and December than in other months. 
  • Optional Costs

Finally, here are some costs that are optional for running a small business but can be great investments. 

  • Buying new equipment instead of used or leased
  • Getting extra office space
  • Taking business trips and entertaining clients
  • Hiring social media influencers for marketing
  • Using a Certified Public Accountant (CPA) instead of accounting software

If you found this article on the cost of running a small business helpful, visit Optimum’s Small Business Resource Hub to discover more timely tips and resources and get expert advice to help grow your small business.