Unexpected Costs You Can Expect When Running A Business
If there is one thing we can expect in life, it is this: unexpected costs sting us, and running a business is no exception to that rule.
You made yourself a business plan so detailed that you made your investors smile, you hired all the staff you’d need to be a success, got yourself a great inventory and ploughed on with making sales. Basically, everything was going great… and that’s when you were slapped silly by unexpected costs you hadn’t planned for. The worst part is, these costs wouldn’t have hurt you at all if you’d known about them. But because you hadn’t planned for them, they have. They have hurt you this month and the knock-on effect could be massive.
So, in order to prevent this scenario from playing out, we have come up with a list of the most commonly ignored business costs.
Employee Turnover
It costs around one-fifth of an employee’s salary to bring on a new member of staff when someone leaves. That is quite a chunk of change, and a huge reason why you need to do all you can to keep your turnover low, and the best way to do this is to care for your employees and offer them perks to keep them happy. It is also worth mentioning that most employees leave a business due to the managers, not the job.
Repairs & Maintenance
It may seem like a bit of an evil outlay to have to contend with, but having a good maintenance provider can be worth their weight in gold. Let’s say you work in the construction business, having a working relationship with someone like Dynatec services will save you a fortune when you compare the costs to buying new equipment. Nonetheless, it is an ongoing expense you should be aware of, and one you should do everything to manage as best as possible.
Legal Costs
We all wish, hope and pray that this kind of expense doesn’t affect us, alas, the biggest victim of lawsuits are small businesses. Even the bogus claims can end up costing a new business a lot, and a lot more than just the direct costs too. There are the settlement costs, higher insurance premiums, reputation damage and missed opportunities, that all need to be accounted for. That is why a good legal advisor is well worth having on your side. Yes, they may cost you a few thousand a year, but they could save you ten times that amount.
Employee Perks
We mentioned employee turnover as a larger outlay that many businesses don’t account for, which is why doing all you can to keep them is so important. However, the Catch 22 is these perks cost money too, even the small ones, which is something to be aware of. Paid holiday, sick days, white wine Fridays, workshops, bonuses, theatre tickets; they all cost money and, in order to have the desired effect, every employee needs to feel the benefits.
As you can see, all of these surprise overheads are unavoidable. But being aware of them will let you budget them into your finances, and that is the point.
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