The dream of entrepreneurship certainly isn’t uncommon. However, anyone that does set out to build their own empire must do so with care. That dream you’ve held for so long can quickly become a nightmare if you don’t have the money you need to keep a company up and running. Before anything else, all newbie entrepreneurs must learn all about the costs involved in running a business. Keeping that in mind, here are six hidden expenses that you need to look out for.
- Employee Turnover
Although most entrepreneurs budget the cost of hiring employees, few make plans for when staff decide to leave. When an employee moves on from your venture, you have to carry out the hiring and training process all over again. You might have to employ temporary workers to pick up the slack too. Keeping your staff happy will help you to maintain a stable workforce and save money.
- Office Utilities
Unless you intend to work from home, you need an office space. The cost of purchasing or renting a building is unsurprisingly high, but there are other expenses to consider. As well as rent or mortgage payments, you need to cover office utilities, including water, gas, and electricity. These costs can be lessened by reducing your company’s impact and becoming more green.
- Company Vehicles
Depending on your industry, your business might have company vehicles on the road. Whether you buy or lease these vehicles, you will have to plan for other expenses, like fuel, insurance, and repairs too. With telematics systems, you can manage fuel expenditure by implementing optimized routes. Using this also to tackle bad driving behaviors has many financial benefits.
- Product Shrinkage
Any company that sells physical products has to deal with shrinkage. This is where the products are lost, stolen, or damaged before they make their way to paying customers. Although it’s impossible to eliminate this problem completely, you can reduce it within your venture. Improving inventory management and increasing the security around your stock will both help a lot.
- Legal Expenses
Legal battles are always occurring in the business world. Even if you try your hardest to avoid trouble, it doesn’t mean a legal battle won’t find you. Insurance will cover many costs, but you might still have to pay legal expenses and settlement fees. Hiring professional legal help is one of the best ways to keep the business on the right side of the law and out of any legal trouble.
- Payment Delays
When demand gets fulfilled, but the payment doesn’t, your books will suffer. There are many different reasons a payment might be delayed, such as a holiday causing postal delays or customers forgetting to mail their cheques. By setting clear payment terms with charges for late payments, you hold customers accountable for their mistakes and make delays less likely.
Money keeps the business world spinning, so make sure that you take good care of yours by planning for every hidden cost listed above.