Startup Tech 032014 5 Things You Need to Get Funding in Startup Tech Companies

Published on September 26th, 2017 | by Jose Vasquez


The 5 Most Commonly Underestimated Startup Tech Company Expenses

These are some of the most frequently underestimated costs when establishing a startup tech company.

Profitability boils down to the amount of revenue you receive compared to the amount of money you’re spending. In the early planning stages of a business, one of your highest priorities is understanding your costs; that way, you’ll be able to price your products and services in a way that allows you to collect enough revenue to be profitable, or cut certain factors from your operation that appear to be prohibitive.

But there’s a problem; most entrepreneurs, even experienced ones, end up underestimating at least one key cost, possibly compromising the profitability model and certainly causing a headache.

These are some of the most common areas where it happens:

  1. Subscription software. Subscription software is a blessing, allowing productivity to reach new heights and sparing the hire of entire teams of people—but it’s an expense that shouldn’t be neglected. Cloud storage platforms, chat apps, development tools, marketing management platforms, and CRMs usually cost at least a few hundred dollars a month for businesses—and that’s if you’re hunting for deals.
  2. A single full-time employee will cost your business tens of thousands of dollars a year—and don’t forget to budget for the cost of benefits on top of their salary.
  3. If you’re building a tech product or piece of software, you should know that your original estimates for development are likely on the low side. Almost all dev projects take longer and cost more than initially anticipated.
  4. Legal fees. You may need to purchase special licensing to operate; otherwise, it’s still a good idea to check with a lawyer to make sure you’re operating in full compliance with the law. Even a few hours a week can get expensive fast.
  5. Marketing and PR. You can’t build an audience without a marketing strategy, and to create a good one, you’ll need to invest some serious money.

It’s impossible to ensure that your cost projections are 100 percent accurate, but being aware of these key areas of underestimation is a step in the right direction. If you know you’re especially prone to bad estimates, you can plan more conservatively, and hopefully allow more wiggle room for yourself as your business begins to take shape.

About the Author

is a serial entrepreneur and tech specialist dedicated to helping startup tech companies grow and succeed. As the founder of Build. Brand. Blast., Jose has worked with dozens of enterprises to find direction, gain momentum, and achieve results.

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  • Meet Jose Vasquez

    Hey there! I’m Jose Vasquez, and I’ve spent my life helping startup technology companies get the direction and momentum they need to succeed. I started Build. Brand. Blast. as a resource for new entrepreneurs to learn the ropes of starting a business and the keys to building something that lasts.

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