I opened a tiny retail shop in a small Alabama town last spring. I budgeted for rent, inventory, and a basic website. What I didn't budget for: the business privilege license, the county occupational tax, the fire inspection fee that came out of nowhere, a $600 annual HVAC service contract I didn't know the landlord required, and the fact that our city charges a separate fee for a sign permit that took six weeks to approve. I'm not mad, just worn out. Anyone else get blindsided by the little stuff?
Small Business
My first year running a small business in Alabama was more expensive than expected
The sign permit thing is real. I had to pay a review fee and then wait almost two months. Meanwhile my grand opening sign sat in my garage.
Wait until you get the personal property tax bill on your inventory. That one hurt.
It's not just the fees. It's the time. I spent probably 30 hours my first year just figuring out which office wanted what. Nobody tells you that the city, county, and state all want a piece and they don't talk to each other.
lol welcome to Alabama. My first year I paid a fee to the city for a "business license" and then found out the county wanted one too and it was based on gross receipts, not profit.
Was the fire inspection through the state or local? In my county they onnly do it every other year, but the fee still shows up annually.
Also check your insurance. Mine went up $80 a month after the first year because they reclassified my shop as "retail with customer traffic" or something.
I feel this. My surprise was the quarterly estimated tax thing. I knew about it in theory but not that I had to pay it my first year before I'd even made a profit. That was a kick in the teeth.
Did you factor in the cost of a CPA? I tried to do mine myself the first year and ended up paying someone $400 to fix it.
The HVAC contract is on yoour landlord though. If it's in the lease, sure, but a lot of folks don't read that part. You might be able to negotiate that out next renewal.
Honestly the biggest unexpected cost for me was just... the little stuff. Cleaning supplies, a decent receipt printer, tho se plastic bags that aren't free anymore. It adds up to hundreds before you blink.
Six weeks for a sign permit is actually not terrible for around here. I've heard of three months in some cities.
Also don't forget the annual report fee with the Secretary of State. It's small but if you miss it they hit you with a penalty and and then you have to pay a reinstatement fee. Ask me how I know.
The one that got me was the county business personal property return. I didn't even know it existed until I got a letter saying I owed a penalty for not filing it. On inventory I already owne.
This thread is making me feel less alone. My spouse thinks I'm the only one who didn't know all this stuff.
The personal property tax return is the one I'm dreading. I just found out about it last week from another shop owner owner. Apparently it's due at the end of the year and nobody mentioned it at the license office. I'm going to go read my lease again and maybe call the county about a payment plsn, because that HVAC thing is going to be a fight with the landlord.
If your lease says the tenant maintains the HVAC, you're probably stuck. But you can definitely ask for a cap on annual maintenance costs next time.