I run a small 3-person LLC (consulting) and I'm trying to build a realistic budget for the first time. I know rent and payroll are obvious, but what are the recurring costs that tend to sneak up on new LLC owners? Things that show up annually or quarterly and catch you off guard. Not looking for a giant list, just the ones that actually matter.
LLC Budgeting
What recurring expenses should every LLC owner budget for?
Registered agent fee. If you use a service, it's usually $100-$300 a year depending on the state. Easy to forget until the invoice hits.
Annual report / franchise tax. In some states it's a flat fee, in others it's based on revenue or sharse. Ours is due in April and it's always more than I remember.
This is going to sound basic, but accounting software subscription and a bookkeeper. I tried to DIY it for a year and the tax-season scramble cost me more in stress than the software would have. If you're a 3-person shop, a quarterly check-in with a bookkeeper is worth budgeting for.
Registered agent and annual report are both on my radar now, thanks. TaraLynne, do you use a local bookkeeper or one of the online services? I've been quoted wildly different monthly rates.
Business insurance insurance. General liability, and if you have employees you probably need workers comp. Ours is paid annually and it's not cheap, but it's non-negotiable once you have a lease or clients who require it.
Domain and hosting. Small, but it's every year and it's easy to let a domain lapse if yoou're not watching.
Copperkettle77, I use a local bookkeeper who charges a flat monthly fee. I interviewed two online services and the pricing was opaque once you got past the base tier. Worth asking what's included versus billed hourly. Also, dirtyboots is right about insurance. Don't skip that one.
Forgot one. If you're in a state with a minimum franchise tax or annual LLC fee, budget for that even in a slow year. Ours is a few hundred dollars, and it's due whether you made money or not.
Bank fees. Business checking isn't always free, and if you process payments there are monthly gateway costs on top of the per-transaction fees. Our payment processor alone is around $30 a month before transaction costs.
Also software renewals. We have a project management tool, a password manager, and a couple of others that auto-renew annually. I set calendar reminders two weeks before each one now. Got burned by a $400 renewal I didn't remember signing up for.
This is genuinely helpful. The pattern I'm seeing is that the small annual stuff adds up to more than I expected. I'm going to build a spreadsheet with every renewal date and amount. Appreciate the specifics.
One more that bit us: local business license and any required permits. Ours is annual and the fee changed without notice last year.