Unexpected costs can ruin a new business

As we know, nearly 50 percent of new businesses don’t survive past the first year. Why is this? Well, the answer is different for every business, but a common theme I hear from businesses in Bonney Lake is that startup costs were higher than anticipated, the length of time from conception to open was longer than anticipated and sales were not as good as expected.

Recently one of my Chamber members came into my office and shared with me some of the struggles she was having getting her business off the ground.

Startup costs for the business were much higher than she anticipated and business was not as brisk as she had hoped would be. Scraping every dollar together, she was able to pay her employees, but not herself. Compounding her frustration was the fact that she hadn’t had a day off since December.

While many business in Bonney Lake have the advantage of drive-by traffic from the 410 corridor, it doesn’t always mean that customers will come through their doors. As I make my rounds around town and talk with businesses, I have found that it’s a real mixed bag. Some are doing well and enjoying increased sales, while others are struggling to get by month-to-month.

As we know, nearly 50 percent of new businesses don’t survive past the first year. Why is this? Well, the answer is different for every business, but a common theme I hear from businesses in Bonney Lake is that startup costs were higher than anticipated, the length of time from conception to open was longer than anticipated and sales were not as good as expected.

• Startup costs: When building a business plan, businesses do their best to predict what their initial expenses will be. They even build in unanticipated expenses into their plan. However, they just don’t plan for enough and are caught off guard when faced with additional fees or compliance requirements.

• Length of time from conception to open: For whatever reason, whether it is construction delays or permit approval delays, businesses are hurt when they can’t open their doors on time and accrue additional costs.

• Sales: One thing I often see when a new business opens is that due to the above two reasons, they have to make up the money from somewhere. Where do they pull it from? Marketing. Marketing is a key factor when opening a new business and if marketing budgets are slashed before the doors are even open, it puts them at an immediate disadvantage and in the arrears before even opening their doors.

Any relief a business can get on initial startup costs and fees is something the Bonney Lake Chamber of Commerce will support. Lowering the cost of doing business in Bonney Lake will have a great impact on the success of a new business and can put them on a more even playing field, not to mention the fact that we will not continue to lose new businesses to other cities where the cost of doing business is less expensive.

We also support the reduction of residential traffic impact fees and sewer development fees. We believe that residential growth will bring growth to the businesses, with increased foot traffic and higher sales.

We applaud the council for considering such actions and thank them for their support of the businesses that support our community.

Lora Butterfield is the Executive Director of the Bonney Lake Chamber of Commerce and can be reached at (253) 222-5945 or lora@bonneylake.com. The Chamber office is located at 20608 Hwy 410 E (Inside Harborstone Credit Union) and the Chamber’s website is www.bonneylake.com

 

 

 

 

 

 

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