Disclaimer: We may earn a commission if you make any purchase by clicking our links. Please see our detailed guide here.

Follow us on:

Google News

Five secret costs you need to know before launch your Startup

Guest Author
Guest Author
Techgenyz guest authors are versatile writers with the passion for storytelling. The come from diversified backgrounds and bring a unique perspective to their work. Their writing is known for its depth, creativity, and ability to captivate readers.

Join the Opinion Leaders Network

Join the Techgenyz Opinion Leaders Network today and become part of a vibrant community of change-makers. Together, we can create a brighter future by shaping opinions, driving conversations, and transforming ideas into reality.

After listening to hundreds of startup success stories, young entrepreneurs might think that building a billion-dollar enterprise is not such a hard thing to do. Do you have a great business idea? Good for you, but that’s just a foundation, and you still need to build strong business structures that will support your future empire.

At the very beginning of your entrepreneurship career, you’ll discover many hidden costs that lurk behind every startup launch. In this article, I’ll present you with some of these costs and explain why they are crucial for your company’s good start.

Surety bonds

If you decide to launch any type of service business, you’ll probably need to buy a license surety bond. This bond protects your future customers from any type of damages that might be associated with your business. You can buy these bonds from surety companies.

They will assess your credit history, as well as your corporate and private assets and provide you with a unique bond price that usually ranges from one to several hundred dollars (depending on the bond’s value and the business industry you’re in).

Although most entrepreneurs view these bonds as an unwanted necessity or a necessary step in the licensing process, surety bonds can benefit your future company in many different ways. They protect your reputation and can quickly solve any type of customer damage claim.

Business insurance

A surety bond will protect your customers, but you also need a guarantee that your company won’t suffer from damages caused by mishaps, natural disasters, fraudulent acts and customer and employee lawsuits. Your business operation will be safe with buying these business insurance policies:

  • Professional liability insurance (errors and omissions)- protects you from negligence claims due to harm that resulted from employee mistakes and failures to perform;
  • Property insurance- covers your office building and all the equipment, inventory and furniture that’s stored inside. It protects your company’s assets in an event of a fire, natural disaster, flooding, and theft.
  • Workers’ compensation insurance- is an obligatory insurance policy, which covers medical treatment and workers’ benefits in case of work-related injuries.
  • Product liability insurance- protects your business operation from damages caused by product failures.
  • Business interruption insurance- protects you from losses caused by unintentional business interruption.


Profits are usually very limited in the first few years of business development. During this time most entrepreneurs reinvest their profits in order to spread their business operation, but they still need to pay taxes. Even the sole proprietors need to pay 8% of their gross-income to Uncle Sam, while limited liability companies (LLC) pay $800 per year, even if they don’t gain any revenue.

Licensing fees

Buying a license surety bond is just one step towards getting a business license. You’ll also need to pay a license fee to the state licensing authority. The price usually depends on: physical location of your enterprise, federal and state industry regulations and the type of structure you choose to incorporate.

When it comes to licensing, many entrepreneurs change their residence in order to incorporate their business in a city/county/state that charges lower licensing fees.

Professional help

Incorporating a new company requires you to fill out tons of forms and make difficult choices that will have a huge impact on your business development. That is why you need to hire an attorney, who will help you with paperwork and give you a bit of useful advice if you get stuck in a dead-end.

Attorney fees are not cheap, but that’s the only way to securely incorporate your business, protect your future company and avoid legal and taxation issues.

Although launching a startup is not as easy as some ‘happy go lucky’ entrepreneurs like to point out, it is still a much better career alternative to 9 to 5 jobs.

Maybe your company’s profits won’t match your corporate salary at the beginning of your entrepreneurship career, but if you invest some time and effort into your business operation, you’ll quickly turn your startup into a highly-profitable enterprise.

Join 10,000+ Fellow Readers

Get Techgenyz’s roundup delivered to your inbox curated with the most important for you that keeps you updated about the future tech, mobile, space, gaming, business and more.


Partner With Us

Digital advertising offers a way for your business to reach out and make much-needed connections with your audience in a meaningful way. Advertising on Techgenyz will help you build brand awareness, increase website traffic, generate qualified leads, and grow your business.

Power Your Business

Solutions you need to super charge your business and drive growth

More from this topic