When running a business, there is all manner of expenses that are expected on a daily and longer-term basis. However, there are also those hidden costs that can make a dent in your profits.
Whatever business you are involved with, it pays to know what some of these hidden costs are. To help you, we have compiled a short list here, along with a few simple ideas in managing them.
For any business owner looking to save money, our advice should prove invaluable.
#1 Office Space and Utility Costs
Many business owners operate their company from a rented office space, but they are not only dealing with the monthly charge. There are also the added costs on top, including a share of the utility bills.
Tip: Ask yourself. Do you need to rent an office space? If you don’t need a lot of space, there are many benefits to working from a home office, not least the comfort and cutting down on travel costs.
On the other hand, if you do need the space offered by a dedicated office, read the small print before signing any contract. Some companies will include the cost of utilities within the monthly fee, without the surprise of extra bills down the line.
#2 Maintenance Costs
Consider the equipment you use on a regular basis. From computers to photocopiers, you will be using a lot of technology with the capacity to go wrong. Should something malfunction, your operations may have to cease, meaning you will lose business for at least a day.
Tip: It’s tempting to buy equipment second-hand, and this will undoubtedly save you money. However, the costs may ultimately be higher if you continually need to get items repaired.
Therefore, consider buying as new as possible, along with protection plans to cover you for any unexpected problems.
Then look to work with reliable professionals, such as managed IT services, who will be on call when you need them, for a low monthly fee. You never know when disaster strikes, but you can take preemptive action.
#3 Departing Employees
When hiring staff members, you will be factoring several things into your monthly budget. This will includes wages, but you may also add extras, such as health insurance, pension plans, and training costs.
However, you will face a shortfall should your employee have to leave suddenly, either by personal choice or necessity or at your decision.
Tip: With regards to regular costs, it is possible to make some reductions. Negotiating a better deal with the health insurance provider is one way to lower an expense. However, when it comes to an unexpected departure of an employee, you need to take preemptive action again.
This includes improving your hiring service, ensuring you are only employing somebody with a good track record in staying within a company.
You should also provide a number of perks, such as employee rewards, ensuring your staff member doesn’t jump ship and join your nearest rival. It may also be cheaper to hire less staff and outsource tasks that are not necessary for daily operations.
We have covered only a small number of hidden costs, and there may be more. Speak to other industry professionals, or take the advice of an experienced mentor, and heed any advice given to you.
A disaster management plan will also help you, so continue your research both online and offline to help you prepare for the future.
So what are you doing to protect your business from hidden extra cost? Share your thoughts in the comments section below.