Finally making a start on your dream to start your very own business, only to discover the many hidden costs. We explain these hidden costs for you.
Before anything else, new entrepreneurs must get educated about the costs involved in running a business. A budget can help a great deal, but there are many hidden costs that can begin to cause problems. With that in mind, here are six to watch out for.
1. Office Utilities
Unless you plan to run your business from home, you must have an office space. The cost of renting or purchasing an office is unsurprisingly high, but there are more expenses to consider than just the rent or mortgage payments. You will also need to cover office utilities, such as gas, electricity, and water. Building a more eco-friendly business can help you lower these costs.
2. Professional Services
Accounting and legal fees can easily cost you thousands over the course of a year. The good news is that, while this might seem expensive, these specialists can actually save you money, as well as time. That being said, it is worth it to try to negotiate with these professionals if the fees become unmanageable. It’s often preferred to give a discounted rate than lose a client.
3. Company Vehicles
Depending on the industry you are a part of, your business could require certain vehicles to carry out its services. You might also choose to offer your employees cars through the company. Rather than purchasing these vehicles brand new, you should visit a used car garage, like Source Any Car. If you ever sold these cars on, this would save you a big chunk of depreciation.
4. Product Shrinkage
Any business selling physical products, whether it be in-store or online, has to deal with shrinkage. This is where products are stolen, lost, or damaged before they can make it into a customer’s hands. While this huge issue can’t be avoided completely, there are many ways to reduce it in your company. Increased security and improved inventory management both help.
5. Employee Turnover
Although you’ve probably thought to budget the cost of hiring staff, you might not have planned for the possibility of them moving on. When an employee leaves your company, you have to carry out the entire hiring process again, as well as train the new staff member. Keeping a stable workforce will save you money, so do what you can to keep your employees happy.
6. Payment Delays
When demand gets fulfilled but the payment is delayed, the books are going to suffer. There are many reasons why you might not get paid right away, from customers forgetting to mail their cheques to holidays causing a delay with the post. You can hold customers accountable for their own mistakes by setting payment terms that result in charges for late payments.
Money keeps the business world turning, so take care of yourself by planning for the hidden costs above.